No. 4 — January 28, 2000


Weekly Review

--- by Barbara Wanner

Japan's financial support for U.S. military facilities within its borders, the most generous of any American ally, was a bright spot in bilateral security relations for many years. Of late, though, this star seems to be losing its luster, judging by the tenor of the January 5 discussions in Washington between Japan Defense Agency Director General Tsutomu Kawara and Secretary of Defense William Cohen (see JEI Report No. 2B, January 14, 2000) and the thrust of a January 22 follow-up meeting in Tokyo involving working-level defense officials.

U.S. representatives at both sessions urged that Japan keep its host-nation support "at current levels." Their Japanese counterparts replied, however, that only by reducing base-related spending can Tokyo hope to win public backing for this element of U.S.-Japan defense relations at a time when the Japanese economy is struggling and the U.S. economy is booming. Although the two sides agreed to continue deliberations, prospects for an early resolution seem dim. A January 19 article in Asahi Shimbun, a major Japanese daily, described the growing consensus among politicians and bureaucrats in the Ministry of Finance and the Ministry of Foreign Affairs on the need for a fundamental reexamination and retrenchment of host-nation support in the post-Cold War security setting. Some defense observers recommend that American negotiators hunker down for a long, tough fight on this issue.

The FY 2000 general account budget calls for a 0.1 percent increase in defense spending to ¥4.9 trillion-plus ($41.1 billion at ¥120=$1.00), of which ¥260.3 billion ($2.2 billion) is earmarked to support U.S. bases in Japan (see JEI Report No. 1B, January 7, 2000). However, Finance Ministry budget planners wrote in a 5.4 percent reduction to ¥80.9 billion ($674.2 million) in the facilities-improvement element of this financing.

This marks the first time that JDA has received less than it requested to cover specific costs associated with the hosting of American forces, such as the salaries of Japanese nationals employed at U.S. bases, utilities and expenses related to the in-country relocation of American armed forces. In 1978, under what now is called the Special Measures Agreement, Tokyo began to assume responsibility for these outlays, referring to them collectively as the "benevolent sympathy budget." At the time, the U.S. budget deficit was starting to widen while Japan's finances still were relatively healthy.

Now, though, the two nations' budget positions have reversed (see JEI Report No. 2A, January 14, 2000). This has made it difficult for the government of Prime Minister Keizo Obuchi to justify to a citizenry increasingly worried and frustrated by economic uncertainties continued spending on an activity that does not directly stimulate the economy or otherwise obviously benefit the public. And, with elections for the Diet's important lower house looming — they could be held as early as this spring — Mr. Obuchi and his advisers have little political incentive to prevail on bureaucrats at MOF and MOFA to reverse the cut in base improvements for the sake of improved U.S.-Japan alliance relations.

According to some reports, U.S. authorities are worried that the decision by Tokyo to trim one aspect of host-nation support will open the door to more extensive reductions when the Special Measures Agreement expires March 31, 2001. This may explain in part U.S. Ambassador to Japan Thomas Foley's January 18 remarks before the Tokyo-based Foreign Correspondents' Club, in which he described Japan's host-nation support as a "strategic contribution" to the bilateral security relationship.

In some respects, the more austere FY 2000 budget for host-nation support is not surprising given MOF's preoccupation with Japan's fiscal health — or lack thereof. However, it is the fact that some high-ranking diplomats, many of whom have spent a good portion of their careers focused on transpacific relations, seem to be pushing for a reassessment of burden-sharing between Japan and the United States that most concerns Mr. Foley and other top U.S. officials.

For example, former Ambassador to the United States Kunihiro Saito has gone on record supporting a "firm stance" by Tokyo on the subject of reducing host-nation support. Another Foreign Ministry veteran, San Francisco Counsel General Nobuaki Tanaka, has suggested that Tokyo's future financial commitment to the U.S. military presence in Japan should be considered within the context of a broad examination of the nation's post-Cold War national interests. "In the past, the United States has drawn the picture for Japan, [now] Japan should draw its own self-portrait based on its own national interests," Mr. Tanaka recently was quoted as saying.

Working-level officials had other items on the agenda for their January 22 meeting — for example, the nettlesome matter of relocating the U.S. Marine Corps heliport currently at Futenma Air Station to another site on Okinawa (see JEI Report No. 4A, January 28, 2000). The fact that the discord over Japan's coming reduction in host-nation support received the lion's share of press coverage reflects the importance of this issue to U.S.-Japan defense cooperation and, Pentagon officials have implied, the necessity of avoiding a breach over it.

The views expressed in this report are those of the author
and do not necessarily represent those of the Japan Economic Institute

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