NO. 41 -- October 31, 1997


Feature Article


An Interview With Ambassador Richard L. Armitage

The U.S.-Japan defense relationship has undergone marked changes in the past two years. A tragic episode on Okinawa in the fall of 1995 brought to a head the long-simmering resentments of residents of Japan's southernmost prefecture for having to shoulder the overwhelming burden of the U.S. base presence. This outcry led to an agreement between Washington and Tokyo to consolidate the American base presence. Concurrently, the two governments undertook a comprehensive review of the 1978 bilateral defense operational guidelines. That culminated in a new blueprint aimed at enabling the United States and Japan to deal more effectively with the uncertainties of the post-Cold War security environment in Asia. Richard L. Armitage, an influential voice on U.S. security policy, particularly in the Asian Pacific theater, recently discussed with JEI Senior Political Analyst Barbara Wanner various ramifications of the Okinawan base plan, the new transpacific defense guidelines and other regional security issues.

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Weekly Review

Global Stock Markets Fall Like Dominoes; Japan Debates The Consequences by Jon Choy

During the height of the Cold War era, Washington and Tokyo worried that if one pro-Western Southeast Asian country fell to the forces of communism, other countries in the region would topple like dominoes before the Red tide. The collapse of the Soviet Union and the end of the Cold War erased the "domino theory" from the popular conscience. However, the financial chaos that recently spread from Southeast Asia to the rest of the world resurrected this idea with a twist.


Japan's Trade Surplus Ballooned Over Summer by Douglas Ostsrom

Japan's customs-clearance trade surplus still is expanding amid signs that the imbalance is close to a plateau. The already big excess of exports over imports soared 61 percent in the July-September period from a year earlier, the third straight quarterly rise (see Table 1). Moreover, the imbalance in trade with the United States jumped 37.4 percent, also the third consecutive quarterly increase (see Table 2). Although the trade figures themselves suggest that the factors that have created gains of this magnitude are largely spent, recent developments in Asia raise the possibility that the Japan-U.S. surplus, if not the overall number, could be headed higher. Such a development would threaten to heighten trade tensions between Washington and Tokyo. Relations already are strained by the trend in the transpacific trade imbalance this year and Japan's weak overall economic performance.


Asian Leaders Eye Clinton-Jiang Summit by Eric Altbach

Speculation about the outcome of the October 29 summit between President Clinton and his Chinese counterpart, Jiang Zemin, was nearly as intense in Tokyo and other Asian capitals in the weeks leading up to this historic meeting as in Washington and Beijing. Improved relations between the United States and the People's Republic of China would be much-needed good news for Asian policymakers buffeted by weeks of local currency instability and plummeting stock markets. Moreover, while virtually every Asian country has expressed its desire for a continued U.S. military presence in the region, the belief is widespread that regional security and economic problems can be solved more effectively if U.S.-China relations are friendlier. With world financial markets jittery over Southeast Asia's economic problems, the perceived success or failure of the Washington summit could have a powerful impact on the mood of policymakers and traders alike throughout the Asian Pacific.




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