No. 23 — June 16, 2000


Weekly Review

--- by Barbara Wanner

Reflecting the depth and the importance of U.S.-Japan relations, President Clinton traveled to Tokyo to attend the June 8 state funeral of the late Prime Minister Keizo Obuchi, who died May 14 after being felled by a stroke six weeks earlier (see JEI Report No. 14B, April 7, 2000). Mr. Clinton had just wrapped up a busy six-day trip to Western Europe, Russia and Ukraine, but he apparently did not hesitate to reboard Air Force One after only 24 hours back in Washington. His 12-hour flight to Japan was made for the express purpose of paying respects to Mr. Obuchi, whom he called his friend. "Prime Minister Obuchi touched hearts around the world in simple human ways. Our world is a better place thanks to the life that he lived and the work that he did," the president said at a reception hosted by Ambassador to Japan Thomas Foley following the funeral service.

While the purpose of the June 8 gathering of representatives from more than 80 countries, territories and international organizations was to convey sympathy to Mr. Obuchi's immediate family as well as to the nation at large, the imperatives of global diplomacy could not be excluded from the somber and respectful affair. Prime Minister Yoshiro Mori, who was elected April 5 to succeed Mr. Obuchi (see JEI Report No. 15B, April 14, 2000), conferred with Mr. Clinton for about 30 minutes on pending trade and security issues. Notwithstanding the cordial atmosphere surrounding the talks, this meeting served as a reminder to the new premier that major problems exist in bilateral relations.

Mr. Mori and Foreign Minister Yohei Kono also crammed in more than 30 meetings with other visiting dignitaries. The focus of many of these discussions was the agenda for the July 21-23 summit of the leaders of the Group of Seven industrial nations plus Russia, which Japan will host on Okinawa. Mr. Mori underscored Tokyo's goal of using this annual gathering to highlight the importance of addressing the so-called digital divide between the technology haves and have-nots of the developed and developing worlds. Relatedly, in his brief tete-a-tetes with leaders of members of the Association of Southeast Asian Nations, Mr. Mori outlined Tokyo's plan to set up in July a $2.5 million fund aimed at narrowing economic disparities between and among regional neighbors. The prime minister also welcomed Russian Deputy Prime Minister Viktor Khristenko's confirmation that President Vladimir Putin would visit Japan in late August to continue negotiations aimed at concluding a peace treaty between the two nations (see JEI Report No. 7B, February 18, 2000).

The importance of multinational support for the precedent-setting June 13-14 summit in Pyongyang between North Korean leader Kim Jong Il and South Korean President Kim Dae Jung (see JEI Report No. 17B, April 28, 2000) also received considerable attention, particularly in Mr. Mori's meetings with Mr. Clinton, Mr. Kim and Qian Qichen, vice premier of the People's Republic of China. The American and South Korean leaders concurred with their Japanese host on the need to encourage the reclusive, Stalinist regime in Pyongyang to "think in more creative and flexible terms" about normalizing ties with Seoul after nearly 50 years of tense and often contentious relations between the two ends of the Korean peninsula.

Mr. Mori was said to have praised Mr. Clinton for persuading a once deeply divided House of Representatives to grant China permanent normal trade relations &emdash; an action that is expected to boost momentum for Beijing's accession to the World Trade Organization. The president referred to the PNTR victory as an "economic and strategic" initiative aimed at encouraging China to become a constructive partner in the global community. The two leaders agreed on the need to closely monitor developments between China and Taiwan, the latter of which is regarded by Beijing as a renegade province that should be reincorporated into the mainland. In that regard, Mr. Mori called for an early resumption of cross-straits negotiations to resolve this dispute peacefully (see JEI Report No. 16A, April 21, 2000).

Messrs. Clinton and Mori did not see eye-to-eye, however, on Washington's demand that Nippon Telegraph and Telephone Corp.'s pair of regional operating units quickly slash the exorbitant interconnection fees that they charge other carriers to use their networks. The two nations have been at loggerheads over this issue for the past nine months. Japanese negotiators have offered a 22.5 percent cut over four years; their U.S. counterparts have been pushing for a steeper and faster reduction (see JEI Report No. 19B, May 12, 2000).

Washington has told Tokyo that this dispute must be resolved by late July or else the White House will consider its options, headed by filing a WTO complaint against Japan. However, Messrs. Clinton and Mori made no headway on the interconnection matter &emdash; nor were they expected to, said insiders. The two men simply restated their government's position, leaving the tedious process of finding a compromise to senior trade negotiators.

Mr. Clinton and Mr. Mori also talked past each other on the issue of Tokyo's financial support for in-country U.S. military facilities. The Japanese government is pressing for a reduction in so-called host-nation support (see JEI Report No. 4A, January 28, 2000). In 1978, under what now is called the Special Measures Agreement, Tokyo assumed responsibility for the costs of Japanese nationals employed at U.S. bases, utilities and expenses related to the relocation of American armed forces within Japan. The government took on these expenditures at a time when the U.S. budget deficit was starting to widen and Japan's finances still were relatively healthy. But when the two countries began negotiations earlier this year on a replacement for the current agreement, which expires March 31, 2001, their budget positions had reversed.

Japanese officials have argued that a continuation of host-nation support at the current level is politically untenable given taxpayers' anxieties about the country's economic outlook and the burgeoning public debt. Their American counterparts maintain that it would be equally difficult politically for Secretary of Defense William Cohen to go before Congress and request a larger defense budget to compensate for Japanese cutbacks in host-nation support when the United States shoulders the majority of costs involved in maintaining a significant American presence in the Asian Pacific. Pentagon officials emphasize that host-nation support is best viewed as a strategic issue rather than as a budgetary matter. As with the NTT interconnection controversy, the president and the prime minister simply restated official positions without offering an inkling of a potential compromise &emdash; at least in their on-the-record remarks.

All this suggests that while Mr. Clinton's presence at the state funeral for Mr. Obuchi underscored the importance that the United States attaches to its relationship with Japan, the occasion did not soften Washington's stance on key bilateral irritants. The president seemed to be saying that he respected Mr. Obuchi and holds Mr. Mori in similar esteem but that those feelings will not change the U.S. negotiating position on these contentious issues.

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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