No. 29 — July 28, 2000

 

Weekly Review

G-8 SUMMIT FOCUSES ON IT CHALLENGE, KOREAN BREAKTHROUGH; AVOIDS CONTROVERSY
--- by Barbara Wanner

Japanese bureaucrats who for the past year have obsessed over the scheduling, agenda, logistics and other aspects of the July 21-23 summit on Okinawa of the leaders of the Group of Seven industrial nations plus Russia finally can breathe a sigh of relief. Notwithstanding the complications caused by President Clinton's late arrival and early departure in order to tend to the troubled Middle East peace negotiations at Camp David in Maryland, the three-day confab of the leaders of Canada, France, Germany, Great Britain, Italy, Japan, the United States and Russia concluded on an upbeat note.

At the gathering's close, the G-8 summiteers issued a comprehensive statement expressing their commitment to promote the international advance of information technology, launch by yearend a new round of multilateral trade negotiations under the auspices of the World Trade Organization and combat infectious diseases, among other objectives. In a separate document, they lauded the landmark June 13-15 summit between South Korea and North Korea and underscored their hope that this fledgling detente will "usher in a new era in inter-Korean relations and reduce the tension on the Korean peninsula." Yet another communique endorsed Washington's efforts to broker a lasting peace in the Middle East as well as reconfirmed the conflict-prevention goals set forth by the G-8 foreign ministers during their July 12-13 meeting in Miyazaki prefecture (see JEI Report No. 28B, July 21, 2000).

The bullish mood also was apparent during the July 21 working-dinner discussions on various economic issues. All of the heads of government except Russian President Vladimir Putin, whose country is excluded from summit-related economic talks, joined together in hailing the positive outlook for the global economy but tempered their rosy assessment by noting that high oil prices could derail growth. However, the G-7 participants declined to give Japan a completely clean bill of health. They urged Tokyo to maintain its stimulative macroeconomic policy to achieve a sustainable, domestic demand-led recovery as well as to continue structural reforms to enhance the nation's productive potential.

Addressing debt relief for the poorest developing economies, the group agreed "to ensure that as many countries as possible" are eligible for help under a loan-forgiveness plan launched at last year's summit in Cologne, Germany (see JEI Report No. 27B, July 14, 2000). At the same time, though, the G-7 leaders expressed concern that military conflicts are impeding the efforts of some potential recipients to implement the required poverty-reduction programs. But after all was said and done, Prime Minister Yoshiro Mori, the summit's host, declared the event a success.

Not a few observers were critical of Tokyo's apparent determination to steer the discussions clear of such potentially contentious matters as the U.S. missile defense program, the growing tensions between the People's Republic of China and Taiwan, and Russia's debt-repayment problems and its violent conflict with the Chechen Republic. This stage-managing, critics charged, contrasted with the dialogue at the Cologne summit, where G-8 members had squarely addressed the daunting challenge of rebuilding war-torn Kosovo along with other hot issues.

Evidently, though, the last thing that Tokyo wanted to do was stir the pot. With the global media spotlight on Okinawa — Japan's poorest prefecture, which has pushed aggressively for the past five years for more assistance from Tokyo as well as for a reduction in the high-profile U.S. base presence on the island — summit planners had worked hard to ensure that the G-8 gathering was carefully scripted. They wanted no surprises, no disruptions and no embarrassments. Even the 27,000 Okinawan demonstrators who, on the eve of the summit, formed a human chain around Kadena Air Base to protest American military facilities ultimately proved unable to interfere with the swirl of speeches, bilateral tete-a-tetes and news conferences surrounding the G-8 sessions.

With the same single-minded determination, Tokyo tried to imbue the July 22 meeting between Mr. Clinton and Mr. Mori with an "everything's fine" tenor. This feat was all the more remarkable given that the president had thrown a near-monkey wrench into Japanese bureaucrats' airtight plans by arriving a day late and then leaving earlier than planned July 23 to dash back to Camp David. Some critics accused Mr. Clinton of giving short shrift to relations with America's most important Asian ally, preoccupied as he seemed to be with ensuring a Middle East settlement as his administration's legacy.

The resolution of two interrelated regulatory reform issues on the eve of the summit no doubt helped to lighten the mood of the Clinton-Mori meeting. The president and the prime minister welcomed the July 19 breakthrough in the protracted disagreement concerning the depth and the timing of reductions in the fees that Nippon Telegraph and Telephone Corp.'s two regional operating units charge other carriers to use their networks to initiate or terminate voice and data traffic or to move it across the country (see JEI Report No. 28B, July 21, 2000). That settlement enabled the two governments to release the overdue report on results during the third year of discussions under the U.S.-Japan Enhanced Initiative on Deregulation and Competition Policy (see article in this issue).

Messrs. Clinton and Mori also discussed bilateral security cooperation during their 45-minute meeting on the summit's sidelines. They welcomed a tentative decision on Japan's future host-nation support — an issue that has had American and Japanese defense officials at loggerheads since at least the beginning of the year. The two sides had agreed in principle July 16 on an annual reduction of between ¥2.5 billion ($22.7 million at ¥110=$1.00) and ¥3 billion ($27.3 million) in the amount of money that the Japanese government provides for U.S. military operations in Japan. The cutback will be part of a new five-year arrangement, the so-called Special Measures Agreement, that goes into effect in April 2001.

Washington had objected strongly to any decrease in Japan's coverage of the yen-based costs incurred by U.S. forces in Japan for personnel, utilities and in-country relocation. Tokyo, in turn, argued that it no longer could afford to shoulder all of these expenses given the nation's dire economic straits (see JEI Report No. 4B, January 28, 2000). The proposed agreement, which will be formalized by the secretaries of State and Defense and the Foreign minister and the Japan Defense Agency director general at the so-called two-plus-two meeting in September, will reduce the maximum amount of Japan-financed utility costs inside U.S. bases by up to 10 percent. In addition, the Pentagon will pay utility charges associated with off-base housing.

As for the other security-related dispute that had threatened to cast a pall over the Clinton-Mori meeting — the problem of finding an alternative location for a U.S. Marine Corps heliport based at Futenma Air Station — the two leaders had no choice but to acknowledge the impasse and to urge progress. Okinawan prefectural officials have proposed moving the heliport to a planned airfield in the vicinity of Nago — the summit site — that would be used by both commercial and military aircraft. However, Naha and the Nago municipal government have demanded that a 15-year limit be placed on the American military's access to the facility.

Washington has argued strongly against any time constraints, saying that it would be unwise to arbitrarily restrict the U.S. military's use of a key Japan-based facility given the highly fluid security situation in the Asian Pacific. In the end, Messrs. Clinton and Mori simply reaffirmed a commitment to implement the base consolidation plan outlined in the 1996 Special Action Committee on Okinawa accord, of which the reversion to Japan of the Futenma base and the relocation of the heliport are key elements (see JEI Report No. 45B, September 5, 1996).

In an effort to build local support for the American base presence in Japan's southernmost prefecture — and, hopefully, to contribute to a breakthrough on the heliport logjam — Mr. Clinton delivered a much-anticipated speech July 21 at the Peace Memorial Park in Itoman City on the southern end of the main Okinawan island. He stressed that Okinawa has played, and will continue to play, "an especially vital role" in the bilateral alliance. "Asia is largely at peace today because our alliance has given people throughout the region confidence that peace will be defended and preserved," the president said.

He also made a point of directly thanking Okinawans for their significant contribution to regional peace by taking on the lion's share of the burden of supporting U.S. bases and troops in Japan. "I know the people of Okinawa did not ask to play this role — hosting more than 50 percent of America's forces in Japan on less than 1 percent of the [country's] land mass," Mr. Clinton said. The United States will continue to do what it can to "reduce its military's footprint" on Okinawa, he added. In what may have been a reference to recent incidents involving alleged criminal conduct by American service personnel stationed on Okinawa, the president noted that the United States "take[s] seriously our responsibility to be good neighbors. It is unacceptable to the United States when we do not meet that responsibility."

About a week before the summit, a 19-year-old Marine based at the Futenma Air Station was arrested for reportedly breaking into a local residence and molesting an adolescent girl while she was sleeping. On the heels of that episode, a 21-year-old Air Force staff sergeant also stationed on Okinawa was arrested on suspicion of injuring a man in a hit-and-run accident. These incidents epitomized once more for Okinawans the problems and the abuses that they have suffered as hosts to so many U.S. military personnel. The twin offenses also seemed to be the catalyst for the July 20 human-chain demonstration at Kadena Air Base — a protest whose success probably lay more in depriving summit planners of sleep than in influencing the outcome of the Clinton-Mori talks on base-related issues.

Mr. Clinton was the first American president to speak directly to local residents since Okinawa's reversion to Japan in 1972. By all accounts, he impressed Okinawans with his sincerity, particularly when he met with an organization of individuals who had lost family members during the Battle of Okinawa in 1945. Mr. Clinton used this occasion to announce a U.S. initiative with Japan to create a scholarship program — named in memory of the late Prime Minister Keizo Obuchi, who had selected Nago as the summit site — to send Okinawan graduate students to the East-West Center in Honolulu, Hawaii. Whether endeavors such as these have public relations payoffs that pave the way toward full implementation of the SACO accord remain to be seen. From the official Japanese viewpoint, at least Mr. Clinton's speech to southern islanders came off without a hitch.

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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