Ambassador Kato
CSIS Symposium
July 11, 2003

Thank you for inviting me to this symposium marking the 150th anniversary of Japan-U.S. relations.

150 years ago Commodore Perry sailed into Edo Bay with four ironclad ships, which opened our eyes to the world. As you know, my country had been closed to the outside world for two centuries. Those who left, even Japanese sailors and fishermen blown away by typhoons, were not allowed to return on threat of death until a few years before Commodore Perry's arrival. His arrival was the greatest and last impetus for Japan to end its isolation.

In the past, nations have adopted isolationism as a policy. During the Cold War, the sharply divided world permitted some nations to be ignorant of international concerns. As history has progressed, however, isolation has become less and less of an option for advanced nations because of globalization. And especially after the fall of the Soviet Union, nations could not revert to isolationism because new security threats arose-like the one that brought down those magnificent towers in New York.

I want to talk to you about isolation this afternoon. Looking back to the past, Japan has suffered from isolation several times. Sometimes it was a conscious policy we adopted and sometimes it was one we fell into unconsciously. Japan now has relationships with almost all the nations in the world. Needless to say, the most important bilateral relationship is the one with the U.S.

I saw first hand a few weeks ago how far the Japan-U.S. relationship has progressed in 150 years. I saw our relationship manifested in a very personal way. I attended the summit between Prime Minister Koizumi and President Bush down at the President's ranch in Crawford, Texas. We were at the ranch for 24 hours over two days. During that period, the President and the Prime Minister spent an amazing ten hours together--sometimes in meetings with others, sometimes alone, discussing the issues that affect our peoples.

Certainly, there is a personal chemistry between our two leaders that has grown into trust. At dinner Thursday night, the President invited Prime Minister Koizumi to attend his intelligence briefing the next morning. And so, Friday morning, the Prime Minister of Japan attended the President of the United States' daily intelligence briefing.

The close relationship between our two countries, however, goes beyond chemistry. At the press conference in Crawford, the President called Japan "the very best of friends." Why did he call us that?

He called us the very best of friends because we are democratic nations that share important values. We are friends because of an alliance that has continued for 50 years and through the darkest days of the Cold War. But let us also be historically accurate, while Japan has been a dependable ally during the post World War II era, we largely were on the sidelines when it came to global security issues. This often has been attributed to Japanese pacifism as a result of the horrors of World War II. Perhaps it could be attributed to the lingering effects of the isolationism that Commodore Perry broke through. In any event, Japan largely was a bystander on global security issues for many years.

My premise today is that over the last dozen years-and especially the last few years-Japan has been moving from supportive observer to active player. Japan ended its first isolation when Commodore Perry arrived in Japan. Then the Meiji Restoration made an enormous effort to open Japan to modern thought and practices of the Western World. Unfortunately, Japan fell into the second isolation in 1930's and the first half of the 1940's. As you know, it was militarism and it came to an end with Japan's defeat in World War II. Post World War II, we Japanese decided to pursue friendship with other nations but unconsciously began another chapter of isolation-our reluctance to become involved internationally.

I think Japan's post World War II insular thinking was first breached in a serious way when we became one of the world's largest aid donors. I believe our economic assistance was a moral and political investment that gave us more of a stake and interest in other countries' behavior and well being. During these same years, you can also see the trend toward a more outward-looking Japan in our increased engagement in and leadership of multilateral organizations.

Then you begin to see a more expansive perspective on security issues. Japanese Self Defense Forces had their first actual overseas mission in 1991, when we dispatched minesweepers to the Gulf. In 1992, Japanese Self Defense Forces participated in their first ground operation abroad as part of the UN peacekeeping operation in Cambodia. Since then, we have participated in peacekeeping missions in Mozambique, the Golan Heights and East Timor. Self Defense Forces were sent to Zaire to assist Rwandan refugees and to Honduras for humanitarian disaster relief.

And while Commodore Perry's ships sailing into Japanese waters led to the end of isolation, the ships of Japanese Self Defense Forces sailing into foreign waters as part of the coalition against terrorism ended another kind of isolation.

For the past two years, whenever I give speeches to general U.S. audiences I always mention that after the September 11th attack, the Washington Times newspaper carried a remarkable photo and headline. On the front page was a color photo of Japanese navy ships, and the headline read in bold capital letters, "JAPAN HELPS OUT." That was-and remains-a very important statement. Japan deployed five naval ships to the Indian Ocean and also aircraft to provide support to U.S. and allied forces in the campaign against terrorism. It is not widely known, but Japan supplied about 40% of all fuel consumed by the U.S. and allied naval ships in that operation. This was the first time that Japan had dispatched forces to assist a military action since World War II.

Then, after the defeat of the Taliban and al Qaeda in Afghanistan, Japan became committed to rebuilding what the Taliban and al Qaeda had destroyed. A few months ago, I met President Karzai, and he was genuinely thankful for the hundreds of millions of dollars in Japanese assistance and support.

We are helping provide stability through economic assistance to the entire region where terrorism thrives. In addition to Afghanistan, Japan has given-and continues to give-billions of dollars in economic aid to Jordan, Pakistan and Turkey.

Next we come to Iraq. I tell American audiences that when President Bush referred to the coalition of the willing, Japan was--and remains--part of that coalition. When the United States was obliged to resort to force, the Government of Japan supported that decision and was part of the coalition effort.

Japan is now cooperating with the United States on Iraq's rehabilitation and reconstruction. So far we have committed ourselves to financially assisting Iraq and other nations in the area. We have dispatched civilian experts to Iraq to help the U.S. reconstruction activities under what is now called the Coalition Provisional Authority headed by Ambassador Bremer. Further, our government has submitted a new bill to the Diet, which would enable our country to use Self Defense Forces for humanitarian assistance and reconstruction and for activities to ensure Iraq's security.

Another thing that changed Japan's outlook on the world and our engagement in that world occurred in 1998, when North Korea fired a Taepodong over Japanese territory. The Taepodong missile flew over our skies and our complacency, and it was a direct hit on anyone who thought Japan could somehow remain isolated from the world.

Next we had the DPRK's own admission that it had kidnapped Japanese citizens from the safety of their own country, an astonishing infringement on Japanese sovereignty.

We had the incident in our waters where we sank a North Korean ship equipped for spying and illegal activities.

And, of course, most important, we have the DPRK's military build-up and nuclear saber rattling.

The DPRK is a heavily armed military dictatorship that poses an increasing danger to surrounding countries. Its forces are about 60 percent as big as China's, and yet China's population is 60 times bigger than North Korea's. What is more, the DPRK has revealed it has nuclear weapons. What will North Korea do with these bombs-amass them, use them, sell them?

In all my years as a Japanese diplomat, neither my government nor I personally have spoken out so critically and frankly as we have on North Korea. We have said that it is trying to blackmail the world. And we have warned against paying this blackmail, because it would only end up aiding the North's development and dispersion of weapons of mass destruction.

The responsible nations of the world, most importantly the U.S., the ROK, Japan, and China are for a "peaceful solution" of the North Korean problem. And yet, a "peaceful solution" will not mean a "pacifist solution." What is needed here is a good balance between "dialogue" and "pressure." Japan's position on North Korean possession of nuclear weapons is "zero tolerance." I am optimistic that such an aggressive peace approach will succeed.

As I mentioned above, Japan has become an active player for the peace and prosperity of the world. The Japan-U.S. Security Treaty is essential and indispensable asset. Both others and we call it the "cornerstone" of the stability of the Asia Pacific region. Recently our alliance has been expanding its bilateral cooperation and coordination at a global level. Together with the United States, we are ready to have boots on the ground for the world's peace.

Since Japan has not a single warhead armed with a weapon of mass destruction, we have formulated our foreign and defense policy on the conviction that U.S. deterrence covers Japan. A clear division of labor is worked out under the Japan-U.S. Security treaty. To put it simply, the U.S. monopolizes all offensive capabilities. Japan is expected to focus on defensive capabilities, such as anti-submarine warfare, anti-aircraft warfare, surveillance, airborne early warning. We recently launched our first intelligence satellite.

Also as part of this division of labor, Japan's role is to pursue an international agenda devoted to economic assistance, human security, science and technology, environment protection, disarmament, arms control and non-proliferation. Grappling with such issues has drawn Japan further into the international arena.

In closing, ladies and gentlemen, let me add this brief thought.

It is not surprising that Japan for many years had an insular outlook on the world. After all, the word "insular" comes from the Latin word for "island." Although Commodore Perry instigated an end to Japan's island isolation 150 years ago, Japan on its own is emerging from its post World War II insularity as we live up to our own expectations and those of the community of nations.

We have been passive, for a long time, to what went on in the world. Nowadays, however, we are becoming more active and responsible for what we can accomplish in the world.

I would like to assure you that Japan is committed to fulfilling our role in achieving peace and stability in the world, as we support the free and democratic values that both of our countries cherish.

Thank you for inviting me, and thank you for your kind hospitality.


"From Commodore Perry to Global Partnership"
-In Commemoration of the 150th anniversary of U.S.-Japan Relations-
7/11/2003 Symposium at the Japan Information and Culture Center, Embassy of Japan

Panel 1
Dr. John Dower, Massachusetts Institute of Technology
Dr. Shinichi Kitaoka, University of Tokyo

Professor Dower:
Historical perspective- Go back to Perry.

Perry arrived in Japan on July 8th, 1853. In the Asahi Shimbun on July 8th, 2003, there was an article in the "Tensei Jingo" column that told a story. In 1901, the Japanese erected a monument in Kurihama, and it had an inscription in calligraphy, "In commemoration of the landing of commodore Perry of the U.S. Navy." Toward the end of WWII, Perry's arrival was seen as a symbol of national disgrace. He had pressured Japan, and the monument was removed, draped in black cloth, and taken away. When the war ended and before the Americans arrived, the monument was put up again in the dark of night. This can give us a sense of the ups and downs of the relationship.

There is another part to this story that is less known. In 1947, when the war crime trials were going on, a person named Ishiwara Kanji gave some testimony. He was one of the very large global thinkers in the Army. He was the mastermind behind the Manchurian Incident in 1931. Then he turned against Japan's expansionist policies, so he dropped out of the picture in WWII. His comments in 1947 are as follow: "Haven't you heard of Perry? Don't you know anything about your own country's history? Tokugawa Japan believed in isolation and then came along Perry, to open those doors. He aimed his guns and said, 'If you do not deal with us, you had better watch out for these guns. Open your doors and negotiate with other countries too.' Japan did open its doors but when it did, it found out that all those other countries were all extremely aggressive. For its own defense, it took America as its teacher, and set about learning about how to be aggressive. Japan became America's disciples. Why don't you subpoena Perry from the other world and try him as a War criminal."

Perry became a war hero in the war against Mexico in 1846-8. He came out of that war with a very strong sense of American mission and manifest destiny, and a strong support of gunboat diplomacy. On the eve of his mission to Japan he said, "Our people must naturally be drawn into the contest for empire. It is self-evident that the U.S. extend its jurisdiction beyond the limits of the Western Continent." His behavior in Japan was very firm and very imperious. The more I read, the more I think that MacArthur read Perry before he went over there are as well.

Perry alluded to Mexico saying, "Look what will happen to you if you do not go along with us." However, there is another side. There is also the convivial side of Perry. There was a great deal of socializing between both sides, and an enormous amount of drinking that took place. The Americans gave many gifts of whiskey. The most famous banquet took place on the Powhatan in March 1854. We have accounts of a man on that ship named Preeple. He said, "We were told to make sure that the plates and glasses of the Japanese were never empty, and doing my duty, I made sure that they had everything we had." Japanese officials and American officers start to dance, and then one of the Japanese officials comes to Perry throws his arms around Perry's neck and embraces him enthusiastically saying, "Nippon and America, all the same heart." Some of Perry's officers were shocked that Perry would allow such behavior, but Perry said to his subordinates, "if only they will sign the treaty, he may kiss me."

I think if we look at what comes out of the early encounter and look at the 150 years, there are many ways to look. The "clash of civilizations" ideas are very useful, but I would suggest the following 4 points or dimensions. We should look at U.S.-Japan relations like this. We need to think about parallel modernities. Competing modernities.

1. Technology
If we look back at this experience through Perry, we can get a good understanding of the level of American technology in 1853. Perry goes to Japan to open it primarily to whalers. Moby Dick was published in 1851, in which Ahab, the captain, loses his leg and life off of Japan. This is the age of the whaling ships. Whales are used to lubricate machinery and used to fuel lamps. Perry uses some steam-driven boats, and this of course impresses the Japanese. One of the most famous gifts he gave the Japanese was a ?-scale steam locomotive. One of the additional gifts was the telegraph. It was very new. The daguerreotype-type camera was very new. The colt guns were the newest guns at the time. What you see is that Japan was not so far behind the U.S. and what you see in both countries is exponential technological change. The technological culture is something to think about more than other types of "old-fashioned" cultures.

2. Reciprocity
We always tend to think about Japan being on the receiving side of things, that is to say that it is "Westernized". When civilization occurs, it is because of this "Westernization." However, there is such a thing such as negative Westernization. An example is the quest of wealth and power that involves imperialism, colonialism, and the destructiveness of some of these acts. This is what Ishiwara Kanji was talking about when he said, "We learned these things from the West." While Japan is borrowing much from the West, America is borrowing a lot from the East (Asia and Japan). This is a fascinating area in terms of aesthetics and philosophy from the mid-19th century up until modern times. Westerners also look to Japan for individuality when the U.S. is getting into mass production conformity. The whole categories get turned around and people look to Asia for other things. There has always been a two-way street between the countries.

3. Violence
Perry to WWII- Violence is the paradox to progress. In that process, the U.S. and Japan play a very active role in contributing to the violence of the modern world. Take Weapons of Mass Destruction; we go into WWII and the work of Japan and Unit 731 in producing biological weapons that America learned about after WWII. Of course, this world ends with the nuclear age, and Hiroshima and Nagasaki. The U.S. and Japan live in a world of violence. Here is where Japanese and American views tend to differ somewhat. When the Japanese look back on this age, they think that WWII was an age of imperialism, which includes the Europeans and the Americans as well. They have a broader sense of that. Because of Hiroshima and Nagasaki, the sense of victimization is much more keen- that war is evil and that resorting to weapons is evil. There is also certainly a greater sensitivity to nuclear weapons.

When the Americans look back on this same time, WWII is a triumphal narrative. For the Japanese, it is a tragic narrative and a cautionary lesson. The differences in thought are due to these feelings.

4. Democracy
In a very broad sense; liberty, material benefit for as many as possible, social justice. In both societies, Japan and America, democracy is a long, slow, painful struggle. Perry arrives in 1853, and he represents a slave society. Many of the features that we Americans think of as democratic, are things that have been struggled for over the decades, including civil rights, women's rights, and human rights, even today. Democracy is a living process. When you look at the Japanese side over the past 150 years, you can see the same kind of struggle. Even before Perry came, there is a real struggle for social justice, and many popular uprisings. Historians of Japan look for people in liberty and freedom-rights groups, labor movements, party politics, etc. Japan has a long history of struggling with democracy. It is very mistaken to think of democracy being alien to Japan. When the occupation comes, the Americans are able to build on this base. What people are thinking about these days is Japan's attitude toward what it should do in the world, and its constitution of 1946. This peace constitution is originally drafted by the Americans, but there is an enormous amount of Japanese input. Article 9 for example. Nixon went to Japan to argue that Japan should get rid of that clause. The U.S. has been asking Japan to revise the constitution since 1950. It has become part of Japanese consciousness. It links democracy with peace and anti-militarism, and that in turn with a very sense of Japan operating under the United Nations in the postwar period.

Those are the issues that link anti-militarism with the peace and the real skepticism toward war, with the sense of democracy, with the sense of a real international community, that have come together now and make it difficult for people to say what Japan's role in a world with a proliferation of WMD, and other formidable challenging problems.

Professor Kitaoka:
Let me first look back at the past 150 years. It is generally agreed that for the first 50 years, the relationship between Japan and the U.S. was fairly good. We can explain this two ways- Japan was a very good student and the U.S. was a good teacher. That is one reason the relationship was very good. The other that is more exacting to me is that both countries were on the same side, particularly in regard to China. The Open Door doctrine, started in 1899, is psychologically a very important thing to the American people. The Open Door doctrine meant the opposition to division of China. Japan was a minor power compared to Britain, France and Russia. Japan needed a united China, not a divided one. The U.S. also wanted to have a united China in order to make advancement in trade into China. That is my understanding of why our relationship in the period from Perry to the Russo-Japanese war was very good. Everyone knows that the U.S. gave a lot of support to Japan at the time of the Russo-Japanese war, including the Portsmouth Conference. At that time, President Roosevelt said that Japan was fighting as if for the U.S. It is said, one of the great intellectuals of that period, Yoshino Sakuzo, said he supported the Russo-Japanese war for three reasons:

1. If Russia wins, the Russian military encroachment into China will become stronger. That would not allow freedom of trade in that region and will invite more division of China.
2. If Russia wins, the suppression of its people will be strengthened.
3. If Russia wins, Russia will be an even greater threat to neighboring countries.

These are all related to the concept of the Open Door, and are related to the determination of the people. In that sense, Japan and the U.S. were are on the same side. That is why the relationship between Japan and the U.S. became worse after that. Japan began to monopolize interest in Manchuria. The core of that was the south Manchurian railway. About this, it is a typical case of U.S.-Japan conflict. Japan certainly tried to monopolize the interest in Manchuria through the South Manchurian railway. There was unfair activity on the side of Japan. On the other hand, the U.S. argument was very much exaggerated. A diplomat said that America's future depended on exporting to Manchuria. That is grossly exaggerated because the U.S. was a self-sufficient country. It depended very little on foreign trade. It depended less on trade with China and even less on trade with Manchuria. There was thought of building a railway to challenge Japan's South Manchurian railway. From the Japanese point of view, the South Manchurian railway was the only prize and monument of the victory over Russia. It was link being hit in the heart. From the American viewpoint, the railway was only a minor thing. This kind of thing is one of the mechanisms that can make conflict between the U.S. and Japan bigger.

Japan's efforts to monopolize its interest in China, began to get worse during WWI. Japan wanted to expand its power over Mainland China. In the 1920's, it was controlled, partly because of the statesmanship on both sides. For example, in the 1921~2 Washington Conference, Japan accepted a ratio of 60% of American capital ships instead of the 70% it had insisted on. It was impossible for Japan to win against America in shipbuilding. On the other hand, the U.S. considered accepting the status quo of military bases in the Western bases, not to threaten Japan in the Western-pacific. Wise statesmanship can maintain relationships on both sides.

The relationship really started to go bad after the Manchurian Incident of 1931. The American response was rather slow. The real challenge and criticism of Japan, in which the U.S. send a long list of the violations of the Open Door policy by the Japanese, was not sent to Japan until September 1938, one year after the start of the Sino-Japanese War. The U.S. said the Japanese have violated the legitimate right and interests of the American people. At that time, Foreign minister Arita Hachiro and Prime Minister Konoe made it clear that the doctrines before the Manchurian Incident and Sino-Japanese War were not applicable or valid anymore. This was the first confrontation over the Open Door doctrine. Japan had never denied the validity of that doctrine until then. Until then, with regard to Manchuria and the Sino-Japanese War, Japan had said that there could be some exceptions. In September of 1938, however, they began deny the idea of the Open Door doctrine. I think this is the ideological starting point of the war between the two countries.

After the war, the third period, which is the second good period between the two countries, began. Japan gave up the idea of regional hegemony. In other words, Japan gave up the idea of promoting security and prosperity through geographical expansion. Rather, they began to rely on free trade, and with this, they succeeded. Instead of expanding geographically, they tried to get the best goods and resources from all over the world at the cheapest cost. Due to this, Japan became the second biggest economy. One interesting thing is that in the mid 1980's, when Japan's economy was considered to be at the peak, a question as to who had won the war, be it the U.S. or Japan. This is an interesting but wrong question. Of course, the victor was the U.S., but it was not only the U.S. that won the war. The victor was also the doctrine/philosophy/value the U.S. represented- the Open Door doctrine, which was incorporated into the world by GATT, IMF, and so forth.

That is why the Japan and Germany became core members. They enjoyed these new principles by switching to these new doctrines, they could become winners in the post-war period. One thing left was a kind of pacifism on the side of Japan on which I differ slightly from Professor Dower. Japanese people had the sentiment to hate the war for a lot of reasons. It is not surprising after such a sacrifice to hate the war bitterly. The "No more war" sentiment was adopted. The constitution, which was mostly written in February 1946, legitimizes that kind of pacifist sentiment so pacifist socialists were rather strong in Japan, especially among intellectuals. Very roughly speaking, Japan was internally divided into 2 countries. It was not divided into two countries like Germany, but was divided internally. 1/3 was pro-pacifist/Socialist. The other 2/3 was pro-Western. Japan's development was made possible by relying on the pro-Western camp. The government was all pro-Western. The pacifist pro-Socialist camp was also strong and they could get 1/3 of votes and seats of the Diet. That was enough to block constitutional change. That is why it continued so long. No country can exist without self-defense forces. That is why the government created a rather new interpretation that Japan can have a minimum of self-defense forces, purely defensive forces, despite the second part of Article 9, which clearly denies the position of military forces. This continued up until 1989~90. Up until the end of the Cold War, it was okay for Japan to concentrate on its own self-defense, because the location of Japan is very important for the Western camp. It was located in a place that can block Soviet expansion into the Pacific Ocean. After the Cold War, after the Soviet threat is gone, it is quite irresponsible for Japan to pay attention only to its own defense, without paying attention to the security of the world. That is why Japanese security policy has begun to change very quickly in the 1990's up until today. This is what I think that Ambassador Kato said in his excellent presentation before.

Now let me make some concluding remarks:

Looking back to 150 years ago, Japan was already an energetic country. Japan had a population of more than 30 million people in mid 19th century at that time. The U.S. population during this time was the roughly the same, even though now it is double, mainly because of immigration. Also, what is remarkable about Japan is its literacy. The literacy rate in mid-19th century was 40~50% for adult males and 10~20% percent for adult females which is surprisingly high, maybe even one of the highest in the world. As Professor Dower pointed out, as Commodore Perry and his men found, Japan was not an under-developed country. It had enormous potential. At that time, the U.S. was a challenger compared to England, France, etc. Japan was a challenger too. In other words, there was a kind of modesty between each other. That is an important point that we should remember. How about a comparison between Anglo-American relations- U.S.-Canada relations. Those are very strong, very close and very important relations. However, they are too close to each other. They are both English-speaking countries and geographically close. Compared to that, the U.S. and Japan have very different backgrounds. Still, they can stand on the same values and principals. Let me quote the second clause of the contemporary U.S.-Japan Security Treaty:

"The parties [the U.S. and Japan] will contribute to the further development of peaceful, friendly international relations by strengthening their free institutions, by bringing about a better understanding of the principals upon which these institutions are founded, and by promoting conditions of stability and well-being."

So far, the U.S.-Japan Security Treaty has provided good things for East Asia. China was opened, Korea and Taiwan were democratized, and East Asian countries have so far become richer. That said, the Anglo-Japanese alliance worked well for the first several years, and also the U.S.-Japan Security Treaty has worked well for 50 years. Primarily because they believe in the same principals. I think this is to promote freedom in East Asia. I hope this can be expanded further. Thank you very much.

Panel 2
Dr. Kent Calder, Princeton University
Dr. Akihiko Tanaka, University of Tokyo
Mr. Kurt Campbell, Center for Strategic and International Studies

Professor Calder:
I would like to talk about the past 10 years and the policy process and its continuities. The last decade of U.S.-Japan relationships can help lead us to an understanding of the future, and what might have been done better in terms of policy. After that, I would like to move onto the topic of discontinuities.

From the past 10 years-

One has to expect surprises. There is a sense of obliviousness, especially the U.S., of the Japanese reality. This may be present in the interaction of Perry originally. There have been many surprises over the last 150 years. Also, new volatilities exist, and to me a sense of erosion of some of the old bilateral coordinating, especially in economic areas, it declined. On security fortunately, it is a much tighter bond. I was next to Ambassador Foley on the eve of the steel crisis in 1999, we went by to see Ambassador Saito, and a number of things came up, but there was not a word about the issues that were to explode on us a few days later in the steel crisis. Expect surprises.

Certainly, Japan of the last decade has fragmented. The problem of coordination has been difficult. One can look at a whole range of issues from the guidelines, to Okinawa to trade policy. It seems that the reality (problem of coordination) has shown itself time and time again. Innovation is difficult, except in a crisis. I think of the 1998 financial crisis when Japan did some remarkable things. Implementation of agreements is difficult, certainly not automatic. However, despite this fragmentation, policy change can occur. Leadership is possible and networks are important. I think that Ambassadors and Embassies matter. Strategy needs to set in national capitals, but the information that isn't a detailed understanding of individual circumstances can turn out to be wrongheaded, or at the very least, difficult to implement. If there isn't that kind of interaction between the local and the international, the policy process can be moved from the gridlock that is so easy, to something more than that. Implementation strategy is crucial.

One thing that we cannot forget is the micro. We ran into this in 1997-99. Understanding the incentive structures of individuals and firms is crucial. Change has to be come about by changing the incentive structure. The legal and political sides of things have to focus on, but ultimately what changes behavior is change in the incentive structure more than anything else. A discussion on auto parts with an American auto parts producer that I recall. Someone asked, "How do you sell to people who don't want to make money?" This points to the issue of the idea of corporate governance. If the structure of the firm is such, it is dominated by the stakeholders concerned with stability and above all, employment, not necessarily maximizing profit. The incentive set is different. Some of the issues that might be most important in producing change on the economic side are imbedded deeper than policy has often moved. Focusing on strategic cases it seems is quite important. The issue of the long-term credit bank, was controversial (nationalization first and then a competitive bidding process, the privatization of that, Shinsei bank is now run by an American company and it has been transformed and had a major impact on the banking structure. Are 30~40 trade agreements as important as the occasional focused microeconomic change? These are just some thoughts.

As for the changing global security environment-

What does this mean for Asia and particularly the alliance? The first thing we need to think about is how globalization is differentially affecting the nations of NE Asia. There is an important difference among them. The sweeping changes in finance, telecommunications, manufacturing that began in the mid-1980's, but was strongest in the last decade, I think these have created a more volatile world that is harder to manage, but also one in which especially Japan, China and Korea have responded in rather different ways. This prefigures the major issues of the future.

In China, the vehicle of transformation has been multinational corporations and multinational investment or Chinese networks. In Korea, there was applied IMF pressure, as a result of the financial crisis, a huge surge of foreign investment since 1998. This created a more globalized Korea political economy. In the case of Japan, we have had some tremendously farsighted Japanese firms, but it is important to recall the structure of the transformation. It has been Japanese companies that have reached out to the world rather than foreign companies that have come into Japan. I think that structural difference is quite crucial in terms of the type and the pace of the response to the globalization that has occurred. It has been slower in the case of Japan, than it has in the others. That may affect the broader political economy of the Pacific as well in coming years.

The Middle East is an issue of critical uncertainty for the future of Asia and the U.S.-Japan relationship, mainly because of energy. Within a decade, Asia will be taking ? of the oil going out of the Middle East. Already, the U.S. and Japan are the largest importers in the world. China imports more than a million barrels a day in 1993. Until then, it was an exporter. There is also a growing interdependence between Northeast Asia and the Middle East. It has many implications. But particularly, there is change in the Big 3 in terms of oil reserves. Saudi Arabia with a ? of the globe's total, Iran with 10-11% and Iraq with close to 9%. Together they have close to 50% of world reserves. The implications of the changes in Iraq are quite important, bargaining of oil prices and the role of Russia in the global system. Certain more U.S. influence in the Middle East, and with the 3 key producers, along this dimension the influence of the U.S. is important.

Finally, there is North Korea. Changes in N. Korea, when they happen, might be quite catalytic. South Korea is a geostrategic island in a sense. It is cut off from the continent of Asia. Having been in the DMZ about a month ago, looking across at the special economic zone, everything is in place logistically and structurally for the deepening of the economic relationship, if and when the nuclear crisis can be resolved. That in conclusion, is another critical certainty.

Professor Tanaka:
I always feel envious of historians who can speak of many episodes that we are not familiar with. The task we are confronted with is to talk about the present and the future. With the present, we have a lot of episodes. No one knows about the future episodes. Let me start with the assumption that Japan-U.S. relationship now seems to be at its best. At least, better than any other period after the end of the Cold War. The personal relationship between Prime Minister Koizumi and President Bush, is at least comparable to the Reagan-Nakasone relationship, and maybe even better. Japan was one of the strongest supporters of the U.S. in the Iraq war. Close coordination between high-ranking officials of the two countries is taking place with respect to the North Korean problem. On the economic front, no visible afflictions exist between the two largest economies in the world. The stagnant economy of Japan is a problem for the U.S., because it is not a source of strains between Tokyo and Washington.

After 150 years of ups and downs of the bilateral relationship, have the two countries found an equilibrium state of steady friendship? Is the kind of relationship the Armitage report desired a few years ago, that comparable to the U.S.-UK relationship now finally realized? My view is that it is too early to make such judgment. The current good conditions give us the impression that we have come this far. That is good, but I do not think the they represent ideal conditions that we can simply celebrate. We may have been simply lucky for the past few years. What are the contingency factors that can change very easily? I think there are three:

1. The leadership factor- The current good conditions between Tokyo and Washington are to a great extent because of the personal chemistry between Mr. Bush and Mr. Koizumi. I think the Koizumi factor is extremely important. In comparison with the previous prime ministers, he is very different. He may not be of the highest IQ, not comparable to Mr. Miyazawa (1991~93). He does not have great detailed knowledge of various issues. He is not matched with Ryutaro Hashimoto. He is not a master of the strongest LDP factions like Mr. Takeshita or Mr. Obuchi. He is different. He is immensely popular by Japanese standards, and most importantly, at least with respect to Japan-U.S. relationship, he does not vacillate. He does not use legalistic rhetoric. He is very straight. As it is well known, the Iraq war is not particularly popular among the Japanese public. The majority opposes the resort to arms. But Koizumi was very clear in his support of the alliance. It is said that he anticipated at least a 10% drop in the public approval rating. In fact, the public despite its reluctance to the Iraq war, continue to support Koizumi. His approval rating actually increased in these months.
Had we not changed the prime minister two years ago, we would not have this type of leader. I think the Japanese are lucky that the person who replaced Mr. Mori was Mr. Koizumi. It also helps that very little noise was generated around Koizumi with respect to the Japan-U.S. relations. Our current foreign minister does not seem to excite people as much as her predecessor. Mrs. Kawaguchi, well versed in international affairs, and sometimes very bureaucratic in her exposition, especially in her Diet responses, is very steady and supportive of Mr. Koizumi. I think the Japanese are again luck that Mr. Koizumi dismissed her predecessor 1 and ? years ago.

2. Weakness of the Japanese Economy- Despite the size of Japan's economy, still the second largest in the world, very few people feel threatened by it. Very few Japanese are as boastful as they were in the late 1980's. Americans, though irritated by the slow recovery, rarely became angry over Japan. Japanese economy now becomes a source of pity, as opposed to a source of menace. Well, pity may be akin to love, but it might not be a solid foundation of a strong alliance.

3. International Situations- The level of threat in East Asia may be sufficiently menacing to silence pacifist voices in Japan. The public's continued support of Mr. Koizumi can be explained by the international environment. Under the current situation of the menacing North Korean situation, support to the U.S., even a U.S. dominated by unilateral strategists, is understood to be necessary. If the probably of war becomes very high, I would anticipate that the division of opinions may become more pronounced than now. Positive views of the countries in East Asia about Japan-U.S. alliance is another important issue. Despite several issues in China and South Korea, both are in support of the Japan-U.S. alliance. In comparison with Beijing's often-hostile attitude to the alliance in the past, today's attitude seems very positive.

These factors-leadership, economy and international situations- underline the current good Japan-U.S. relationship. As I suggest, these are all variable factors. They can be changeable. The latter two factors, Japan's weak economy and the menacing North Korea, are in themselves very bad conditions, even if they functionally strengthen the alliance. Obviously there are many other factors, more structured factors that now support the good bilateral relationship between Japan and the U.S. The shared common values of liberty and democracy, the level of people to people exchanges are incomparable to times of the WWII. Mutual influence in areas of culture, both in pop and traditional ones. More than anything else, common experiences that the two people share as friends over the last 150 years constitute structural elements in support of future better relationship over the Pacific. However, as I explained, there are many more tasks ahead. If the current conditions are supported by the current leadership, the Japanese have to consider how we cultivate and nurture the political system to continuously produce right leaders. We hope that Americans will also consider how best to select leaders who can get along well with their allies. If the current weak Japanese economy is one of the sources of the current good bilateral relationship, we need to consider it rather shameful. Japan-U.S. friendship has to be a friendship between the two strongest economies in the world. If the current menacing international conditions give favorable influence to strengthen the alliance, through this strengthened alliance I think we have to transform E. Asia from a menacing region to the region of stable peace. The Japan-U.S. alliance under friendship should become strong enough to prosper even in a more peaceful environment.

Mr. Campbell:
Unlike most of the people in this room, I knew very little about Japan until I started work on it in the mid 1990's. I am going to talk about the U.S.-Japan strategic and security relationship and about the future. I want to use an anecdote from Klausvitz. There is a visual tool that can help us appreciate both strategies and alliances. It is something called the Bologna Glass, which any of you who have had chemistry might know about. The Bologna Glass is an instrument that is used in complex chemical experiments. It is a device that if you can bang it on a desk as hard as you want. It is extraordinarily durable and strong in many applications. If you look at it and hold it the right way, you can take a thin pin and scratch it and it will shatter into a thousand pieces. I think it is a perfect metaphor for the U.S.-Japan security and political alliance. In many respects, it is very strong. I challenge anyone to come up with another bilateral relationship that the U.S. has had over the last 50 years that has experienced and weathered the amount of tension that the U.S.-Japan relationship has witnessed. It was only 10 or 50 years that there were many talking about Japan as an enemy of the U.S. Many of us have a book entitled, The coming war or conflict between the U.S. and Japan. At the time the cover of the book was very animating of the relationship. If you look back at the period of the early 1990's, it is hard to imagine that when Paul Wolfowitz and company wrote the paper which ultimately became the basis for the national security strategy of last year, in which it was enunciated that the U.S. policy should be to remain the strongest country, that was the basis for how they thought about U.S. policy in the post-Cold War environment. Today when that is discussed, the country of concern when people talk about rising states is China. It is easy to forget that only a decade ago, these thoughts were initially directed at a rising Japan, whose economic and political might would inevitably be transformed into military power. If you think about this relationship, it has suffered enormous tensions. Today, it is at least on many levels, the strongest bilateral relationship that the U.S. has in Asia, and it is more durable today than at many times in the past. I will also say that I too will say that this is not a given for the future. I think there are a number of things that we are going to have watch closely, those proverbial scratches on the glass that unless carefully managed, can have profound untoward and dangerous consequences for an alliance that has served to two countries very well from the past into the future.

The first thing that is striking to me is that it is hard to underestimate how much 9/11 has influenced Americans. For them, it is now ingrained in how we think and act. Most people from other countries who I talk to are most interested in, not developments in China, Indonesia, or the Middle East, but domestic politics in the U.S. and how it influences foreign policy. There are constant questions about where the U.S. is going and what can be anticipated of the U.S. in the future. I think one of the countries that have been very supportive of the U.S. on the war on terrorism is obviously Japan. But at a visceral, very deep level, I think unlike other countries in SE Asia who have learned from tragic experience that the war on terrorism is not fought elsewhere, I think Japan is something that is fought elsewhere and not inside Japan, and that Japan is in a fundamental way either immune or outside of the scope of potential conflict. I think that as the war on terrorism plays out, there is likely to be substantial divergences in view in between Tokyo and Washington. How that plays out will be absolutely critical in terms of the viability of our alliances as we go forth.
The second issue-
A potential challenge, and one that we have to be aware of are any evidence that the U.S. either underestimates or overlooks Japanese power and Japanese interests. I think the Bush is doing a great job with dealing with all the political symbols of appropriate engagement. One of the bitterest debates in the Clinton administration was whether he should stop in Tokyo after his visit to China. For those who knew a little about Asia, we appreciated that Clinton's over flight would become a metaphor for how the U.S. was dealing in E. Asia. Being aware of that, and being appreciative of the fact that Japan is the 2nd strongest economy, as a close ally, how we engage with them politically is as important as the actual substance of the alliance.

The third issue-
What we have seen is a substantial improvement in U.S.-Japan bilateral relations, and a strategic cooperation on the security side that has been without parallel in our history. Very important steps both at legislative and operational levels. Supporting general opinion polling that Japan is doing the right thing. The worry is that if Japan continues its economic malaise, if that continues over not just a couple of years, but over a long period of time, that kind of cooperation becomes much more difficult to achieve. I would argue that the biggest strategic economic issue from the U.S. to Japan is the strategic consequences of decline. If Japan declines and cannot play the active role that it should in the Asian-Pacific region, this cooperation, I am afraid, will be part of a bygone era.

The fourth issue-
It is remarkable how much a little consultation will do in nurturing a complex alliance. The U.S. has tended to do until very recently, is that they have not consulted in the way that is absolutely necessary to sustain the kind of support that Japan would like to render for the alliance. It is interesting that the Prime Minister and the President have this interesting relationship, and that the Prime Minister is prepared to depart from some of his public opinion polling on Iraq issues. Ultimately that is based on the ability to consult and do business well. The interesting and troublesome and recently development is how the U.S. has handled the basing review issue in Asia, in which we have had enormous, complex mixed signals. Some are saying we are moving troops, some say we are not, some say it's a done deal, some say we are still in the process. It has been a mess. We need to handle this in a way that will sustain the importance of our alliance as we go forward.

The fifth issue-
China and Taiwan Policy. Historically, the U.S. and Japan have consulted almost not at all about either China or Taiwan. That is neither an issue is exclusively the problem of Washington, nor of Tokyo. Both countries like their ability in handling their own bilateral relations with other countries. There have been numerous on both sides. It is normally the shocks that Japan cites in terms of U.S. policy towards China and Taiwan, but there have been other instances where the U.S. has been surprised in developments in Japanese policy towards China and Taiwan. My own view is we are moving into an era, that if not greater coordination, and there are a number of divergences between the two between conceptualization of prostrate and bilateral relations with both countries, at least a greater degree of dialogue about purposes and objectives of large policy and no surprise, being absolutely critical in how to proceed.

The Sixth issue-
Korea. Ultimately, there is enormous tension among the 3 key players, U.S., Japan and S. Korea, about how to engage N. Korea. At the same time, the one thing that is holding this group of disparate players together is that if it is possible to implement a less effective foreign and security policy in the last 6 months than N. Korea, I don't know what it is. It is absolutely brutally bad. Kim-Jong Il has managed to undercut in every country, especially S. Korea, any effective voice to reach out and deal with these folks. The bottom line for Japan is that whatever it takes, handle the problem peacefully. There can be substantial tensions, serious potential problems, etc., we cannot lapse into conflict (Japanese view). There is a profound realization that given what we are facing on the Korean peninsula, there are very smart people in a variety of countries, especially in the 3 key countries, that have spent the last 40 or 50 years developing the most intricate, horrible war plan imaginable. It is a magnificent, terrible symphony of death and if ever unleashed, would lead to hundreds of thousands, perhaps millions of casualties in short order, in a way that would leave us astonished and horrified with terrible consequences in terms of refugees, loss of confidence throughout Asia. The bottom line for Japan, of course, is for the U.S. in particular needs to avoid this at almost all costs. The hardest thing the Bush administration will have to do is to suck it up and actually and deal with N. Korea. That is going to be painful, it is going to be hard and it is going to go against a lot of concerns about moral clarity. The argument I would make is that I am not sure if you can do diplomacy with N. Korea. I am not sure can walk back their nuclear program. However, I am absolutely certain that the way you keep your allies with you, is that you convince them, and they need convincing. Our allies believe that the U.S. is fundamentally believe we are looking for excuses that we can't deal with them because of what N. Korea has done. That is what the U.S. allies believe. They do not say that, but that is indeed the case. We need to do our very best to convince S. Korea, Japan and China, that we are serious about N. Korea, and we need to test the proposition that they are potentially willing to join the international community. If that fails, which I'm afraid that it might, we have a much better shot at thinking about more difficult options, if the U.S. had tried the positive act with our allies, S. Korea and Japan.

Last issue-
What is interesting about U.S. forces being based in Japan, is that U.S.- Japan relationship is very strong yet at the same time has profound vulnerability. The U.S.'s substantial basing number in Okinawa, etc., it has only been 7 or 8 years since the tragic rapes in Okinawa, in which 1/3 of the population was out demonstrating against U.S. forces. There is relative quiescence in Japan about U.S. forward-deployed forces. My sense is that it is deeply unnatural at a fundamental level to have any country's forces based over a long and sustained period on another country's territory. It takes ultimate care to manage this and think about next steps. I really hail the idea of thinking about what the U.S. is doing in both Europe and Asia.

This is the most important reorganization of U.S. forward-deployed forces in 50 years, much more profound than what was done at the end of the cold war. How you handle this, both in terms of consultation, when you cross a stream with very slippery rocks, one of the things you need to be sure about is that before you take your foot off one rock, that you have your foot on the next rock. As we put in motion very ambitious changes, which could mean substantial reductions of certain kinds in Japan, we need to consult very closely. The U.S. has to have a very clear idea of where it wants to go and how it wants to handle it, and the U.S. has to have a public explanation that is credible and persuasive not only to the leadership, but to the Japanese people as a whole. Ultimately, I am relatively optimistic. I look at the alliance during my short period of working on U.S.-Japan security issues has come, and I am very proud of the development. The turnout (people at the symposium) is an ample reminder that U.S.-Japan issues are as important as ever.