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Korea and Japan: The History Wars

Nation-states, like four-year-olds, find it very hard to admit they are in the wrong and apologise. Adult intervention often helps, but all Japan and South Korea have is US Secretary of State Mike Pompeo (who tried and failed to mediate a week ago in Bangkok). So the trade war between the two grows and festers.

There are obvious similarities with the trade war that Donald Trump is waging against China, with Japan’s Prime Minister Shinzo Abe playing the Trump role: blustering bully with no clear game plan. Like the Trump trade war, too, the Japan-South Korea confrontation threatens to destabilise both East Asian security arrangements and the global market.

Yet the confrontation between Tokyo and Seoul is not really about trade at all. It’s about the difficult history of relations between an ex-imperial power, Japan, and its former colony, Korea.

Japan is existentially in the wrong in this relationship, because it seized control of Korea in 1905 and ruled it, sometimes with great brutality, until it was defeated in the Second World War in 1945. But Tokyo doesn’t like to be reminded of all that, and claims that it discharged whatever moral debt it owed when it paid $500 million to Seoul in 1965.

Koreans take a different view, of course, but the truth is that the victims of Japan’s wartime behaviour were sold out by their own government. $500 million was a lot of money, more than the South Korean government’s entire annual budget. The newly installed military-led regime in South Korea needed the money and accepted Japan’s terms.

Almost all the money went to building up South Korea’s new export industries. Japan offered to pay compensation directly to Korean individuals who had suffered forced labour and other injustices during the Second World War, but Seoul preferred to take a lump sum (and spend almost all the money on development). Many of the victims got little or nothing.

The resentment this caused was easily diverted onto Japan, which had driven a hard bargain and failed to accompany the compensation with an apology. Anti-Japanese hostility occasionally boiled over in notorious cases like the ‘comfort women’ (young Korean women who had been abducted to serve as sexual slaves for the Japanese army), but it is always bubbling away underneath.

Fast forward to last October, when South Korea’s Supreme Court ruled that the lump-sum, government-to-government deal of 1965 did not cover damages for the mental anguish of individual wartime labourers. Subsequent rulings have authorised South Korean individuals to claim compensation from the Japanese industries that used their labour by forced legal sales of those companies’ assets in South Korea

South Korea’s President Moon Jae-in did not seek this ruling from the Supreme Court, which is entirely independent. The Court was clearly stretching the law almost to breaking point, but in practical political terms he could not disown it.

Japan, on the other hand, was horrified by the ruling. Accepting it would open to door to huge claims for compensation from people who had suffered ‘mental anguish’ from the Japanese occupation in all the other countries Japan invaded between 1937 and 1945. It also felt betrayed: half a century ago it had paid out a lot of money to extinguish any further claims like these.

There has never been much love lost between Japanese and Koreans, but the two countries have almost always managed to keep important issues like trade and national security separate from the emotional flare-ups that make the relationship so fraught. Last month, however, Prime Minister Abe completely lost the plot. He began imposing restrictions on Japanese exports to South Korea.

They are relatively minor restrictions. Three classes of chemicals essential to making semiconducters that South Korea buys from Japan now require export licences. A minor bureaucratic hurdle, unless Japan stops approving the licenses (which it has not done).

More recently Japan has removed South Korea from its ‘whitelist’ of countries that are allowed to buy goods that can be diverted for military use with minimal restrictions. Again, no big deal. Just another little hurdle to cross, meant to rebuke and annoy South Korea, not to cause serious injury.

But it has been very successful in annoying South Koreans, who have spontaneously organised a quite effective boycott of Japanese-made goods. And petty though its origins may be, this confrontation is now raising the prospect that these long established trading partners, both closely allied to the United States and both anxious about China’s rise and the threat of North Korea, are going to have a real trade war.

Which, with help from the bigger trade war Donald Trump started with China, may be enough to tip the world economy into a deep recession.
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To shorten to 725 words, omit paragraph 5. (“Koreans…terms”)

Gwynne Dyer’s new book is ‘Growing Pains: The Future of Democracy (and Work)’.

North Korea’s Nukes

The last time when North Korean nuclear weapons might have been headed off by diplomacy was 15-20 years ago, when there was a deal freezing North Korean work on nuclear weapons, and then one stopping the country’s work on long-range ballistic missiles.

If they had been negotiated with the same attention to detail that was given to the recent deal that has frozen Iran’s nuclear programme for ten years, maybe North Korea’s quest for nuclear-tipped ICBMs could have been stopped for good – or maybe not, because North Korea has always wanted an effective deterrent to the permanent US nuclear threat.

At any rate, both the nuclear and the missile deals with North Korea failed after a couple of years. Pyongyang and Washington were equally to blame for the break-downs, resorting to tit-for-tat retaliation for various perceived breaches of the deal by the other side.

But it was the United States that had more to lose, since it faced no nuclear threat from North Korea UNLESS the deals were abandoned and North Korea’s weapons research went ahead. What we have seen recently – two ICBM tests in July, another one last month, and now what was almost certainly North Korea’s first test of a thermonuclear weapon (hydrogen bomb) – is the inevitable result of the failure then.

It took a lot of time and effort to get Pyongyang’s bomb and missile programmes to this point, and it seems clear that Kim Jong-un’s regime decided the safest way to test the new weapons and vehicles was all at once. He’s right.

Stringing the tests out over a couple of years might have given the country’s enemies time to organise a complete trade embargo against North Korea, or maybe even some form of attack. The safer course was to bunch the tests up, get the outraged reactions over fast, and then hope the whole issue will fade into the background.

That’s what both India and Pakistan did in 1998, and it worked for them. Everybody eventually got used to the idea that they were more or less legitimate nuclear weapons powers.

India and Pakistan didn’t bother doing all their missile tests at once, because they had enough space to carry them out over their own land and maritime territory. North Korea is much smaller and entirely surrounded by Chinese, Russian and Japanese territory, so any long-range tests are bound to pass over one of those countries. Pyongyang chose Japan, because it is a US ally.

But even its ICBM test on 30 August, when the Japanese government ordered its citizens in parts of Hokkaido into the shelters, did not enter Japanese airspace. The missile crossed Japan at a sub-orbital altitude, and the Japanese authorities knew that it would as soon as the boost phase ended. The pictures of allegedly panic-stricken Japanese civilians in shelters were propaganda meant to serve Prime Minister Abe’s project for remilitarising Japan.

There is no good ‘military option’ available to the United States and its allies in the current crisis, even though President Trump says “We’ll see.”

A direct US attack on North Korea using only conventional weapons would not get all of North Korea’s nukes, which are hidden in hardened underground sites or moved around by night on mobile launchers. It would also call down “fire and fury” on Seoul from ten thousand North Korean artillery pieces and short-range rockets.

A US nuclear attack would probably still not get all of Kim Jong-un’s nukes: North Korea is the hardest intelligence target in the world. Pyongyang may already be able to reach the United States with one or two ICBMs carrying thermonuclear warheads, and it can certainly reach all of South Korea and Japan.

The political options for the United States and its Asian allies are equally constrained. Trump’s talk of stopping US trade with any country that trades with North Korea is really aimed at China (which already operates selective embargoes on various North Korean exports). But cutting US trade with China would cause immense disruption to the American economy, and it’s unlikely that Trump would actually do it.

Normally, when human beings encounter a problem that they cannot eliminate, they find ways of living with it. It often takes a while for them to get there, however, and we are currently in the dangerous phase where people (or at least some people) are convinced that there must be SOMETHING they can do to make the problem go away.

The only excuse for radical action now would be a conviction that Kim Jong-un is a crazy man who will use his nuclear weapons to launch an unprovoked attack on the United States, even though it would certainly lead to his own death and that of his entire regime. If you truly believe that, then the right course of action is an all-out nuclear attack on North Korea right now.

Otherwise, start dialing back your rhetoric, because you are eventually going to have to accept that North Korea now has a usable nuclear deterrent. You can live with that, because it’s better than fighting a nuclear war.
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To shorten to 725 words, omit paragraphs 8 and 9. (“India…Japan”)

The End of the Big Trade Deals

US president-elect Donald Trump announced on Monday that he will cancel the “Trans-Pacific Partnership” on his first day in office (20 January 2017). That will kill the TPP off for all 12 countries that agreed on it just over a year ago: as Japan’s Prime Minister Shinzo Abe said, the TPP would be meaningless without the involvement of the United States. But then, it was pretty meaningless even with American involvement.

Japan and the US were the only two really big economic players in the TPP deal. All ten other partners – Canada, Mexico, Peru and Chile on the eastern side of the Pacific, and Vietnam, Singapore, Brunei, Malaysia, Australia, and New Zealand on the western side – have a total population scarcely bigger than that of the United States alone.

It was really just an attempt to create a Pacific trading bloc that excluded China, thereby preserving what was left of the traditional US and Japanese domination of the region’s trade. For just that reason, the other big trading economies of the region, Indonesia, the Philippines and South Korea, stayed out of it. They preferred to play the giants off against one another.

Chinese influence and trade in South-East Asia may grow modestly as a result of the TPP’s cancellation, but no profound transfer of power or wealth will ensue. There were no big tariff cuts coming as a result of the TPP anyway, because actual taxes on international trade were already low. The real focus was on removing so-called “non-tariff barriers”.

The classic example of a non-tariff barrier was Japan’s attempt in the 1980s to ban imports of foreign-made skis on the grounds that Japanese snow was “unique”. A great deal of detailed haggling in the TPP talks went into breaking down thousands of similiar (and sometimes equally ridiculous) barriers to trade, but any country that wants to keep those gains can just incorporate the same deals into bilateral trade treaties with other ex-TPP members.

Not many jobs would have been gained or lost, in the US or elsewhere, if the TPP had gone into effect. The same is true for the US-European Union equivalent of the TPP, the Transatlantic Trade and Investment Partnership (TTIP), which was dead in the water even before Trump was elected. Donald Quixote is attacking windmills, not dragons, because the great free-trading spree of 1990-2008 has already come to an end.

It was not working-class American voters who killed TTIP. It was mainly European consumers who didn’t want hormone-laden American beef, US-grown GM foods, and chlorine-washed American chickens on their supermarket shelves.

To be fair, European left-wingers also played a role in mobilising opposition to the deal, by raising the (probably correct) suspicion that the “Investor-State Dispute Settlement” process (ISDS) in the proposed treaty was designed to cripple the ability of European goverments to impose high safety standards in health and environmental issues.

Most of the jobs that moved from developed to developing countries in the heyday of “globalisation” (or often, in the US case, just from Rust Belt states to Sun Belt states where wages were lower and unions were weak or non-existent) left long ago. In recent years eight American jobs have been lost to automation for every one that went abroad.

Most economic strategies, including both protectionism and free trade, conform to the law of diminishing returns. The same goes for political strategies, but they tend to lag even farther behind the realities. That’s why the old white working class in the US (and therefore Trump) still feel compelled to “fight “ free trade – and why even Hillary Clinton, once an enthusiastic advocate of the TPP, was ultimately obliged to turn against it .

When she finally made that U-turn, Reince Priebus, the chairman of the Republican National Committee, mocked her as “a case study in political expediency.” Now he has been appointed as President Trump’s chief of staff, and he will change his tune accordingly. But the cross-party consensus on this does not make it the right tune.

The truth is that these now aborted free-trade deals were merely the finishing touches on an edifice whose basic structure was completed more than a decade ago. Those who had devoted their lives to building that edifice simply kept on doing what they were good at doing, necessary or not. And all the while technological change was conspiring to make them as irrelevant as the people who so vehemently opposed them.

Cultural lag being what it is, the last battles in this long war – probably between the US and its NAFTA partners, Canada and Mexico, and between the US and China – are yet to be fought. We may be entering the next decade before the political process anywhere seriously engages with the reality of automation as the main destroyer of jobs. But reality always wins in the end.
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To shorten to 725 words, omit paragraphs 7 and 8. (“It was…issues”)

South China Sea Showdown?

Next Wednesday (12 July) the International Tribunal for the Law of the Sea will issue its ruling on China’s claim to practically all of the South China Sea. And already the main military contenders are moving more forces into the region.

China’s Maritime Safety Administration announced that Chinese naval and air forces will carry out seven days of exercises in an area extending from Hainan to the Paracel Islands off the Vietnamese coast. The exercises will end on 11 July, just one day before the tribunal’s ruling is released, so they will still be around if things get more exciting after that.

They might well get more exciting, because the US Navy’s Task Force 70, including the aircraft carrier USS Ronald Reagan, has now moved into the South China Sea. Its task, according to its commander, Rear-Admiral John D. Alexander, is “to maintain the seas open for all to use.”

The Chinese Defence Ministry’s spokesman, Col. Wu Qian, warned last Thursday that this is “an act of militarisation in the South China Sea and it endangers regional peace and stability. But I’d like to say that the US side is making the wrong calculation. The Chinese armed forces never give in to outside forces.” And on Friday President Xi Jinping declared that China will never compromise on sovereignty and is “not afraid of trouble.”

So the stage may be set for a serious US-Chinese military confrontation if the Hague tribunal rules against China’s claim next week as expected. The US military fear that China may respond by declaring an Air Defence Identification Zone over the whole of the South China Sea, like the ADIZ it declared in the East China Sea in 2013 in its quarrel with Japan over disputed islands there.

Both the US and Japan refused to recognise that ADIZ and sent their own military aircraft to fly through it. The US Navy would unquestionably respond in the same way to a Chinese-declared ADIZ in the South China Sea – and last February China installed two batteries of anti-aircraft missiles with a range of 200 km. on Woody Island in the Paracels.

In a worst-case analysis, therefore, we could be only a week away from a major military clash between the United States and China in the South China Sea. But it really shouldn’t go that far, because the Hague tribunal’s ruling will have no practical effect.

China’s “nine-dash line” claim to almost 90 percent of the South China Sea looks preposterous on a map – it extends more than a thousand km. from the southern-most point of China while coming within less than a hundred km. of the Filipino, Malaysian and Vietnamese coasts – but it is taken very seriously in China.

The historical justifications for Beijing’s claim are flimsy, but beginning with the seizure by force of the Paracel Islands from Vietnam in 1974, China has extended its control to most of tiny islands and reefs in the entire area.

In the past three years it has expanded seven of these tiny footholds with concrete and landfill, building airstrips, port facilities and other potential military assets on them. In February, for the first time, it put actual weapons on them. Whether or not this was directly in response to the case brought against it in The Hague by the Philippines in 2013, it certainly had the effect of making a military confrontation more likely.

But China stated in advance that it would not recognise any ruling on the validity of its claim by the UN-backed Hague tribunal, which has no way to enforce its decision. So it should not feel obliged to resort to military force to defend its claim, any more than the US should feel any need to use force to challenge it. In theory.

Behind the sometimes belligerent thetoric from Beijing, there has been a long-standing policy that China should avoid military confrontations with other great powers until it has grown strong enough economically to stand a good chance of winning. It’s not there yet, so it should still be gun-shy. But there may now be another consideration at work.

The social contract that keeps the Chinese Communist Party in power is simple: so long as the Party delivers steadily rising living standards, the population will accept its dictatorial rule. For almost thirty years it has kept its side of the bargain, with economic growth rates of between 8 and 10 percent per year.

But even the Party admits that the growth rate is now down to 6 percent, and hardly anybody else believes it is even four percent. Some observers think the economy may not be growing at all this year. If that is the case, then the regime is drifting into dangerous waters, and it will need a foreign distraction to divert public attention from its failure.

An exciting but carefully contained confrontation over the South China Sea with the United States and its Southeast Asian allies could be the solution, igniting nationalist passions in China and generating support for the regime, but the tricky bit is keeping it “carefully contained”. Once you start down that road, you cannot be sure where it will take you.
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To shorten to 725 words, omit paragraphs 5 and 6. (“So…Paracels”)