No. 3 — January 26, 1996


Weekly Review

--- by Barbara Wanner

Newly elected Prime Minister Ryutaro Hashimoto gave U.S.-Japan security ties a much-needed boost in his January 22 policy address to the Diet, stressing that the bilateral alliance provides "the cornerstone of peace and stability for the Asia Pacific region and the world." Political insiders contend that these remarks, which were previewed by Foreign Minister Yukihiko Ikeda during January 18-20 meetings in Washington with top-level Clinton administration officials, establish a positive atmosphere for the April summit in Tokyo between Mr. Hashimoto and President Clinton and create a sounder foundation on which to consider recent upsetting incidents impacting U.S.-Japan defense relations.

The rape of a Japanese schoolgirl on Okinawa last fall allegedly by three U.S. servicemen stationed there sparked an anti-American military backlash throughout Japan and prompted calls for a reduction in the U.S. base presence, particularly on Okinawa (see JEI Report No. 42B, November 10, 1995). In the aftermath of the tragedy in Japan's southernmost prefecture Mr. Hashimoto's predecessor, Tomiichi Murayama, formally articulated the importance of maintaining current levels of American troops on Japanese soil. However, more than a few U.S. policymakers questioned the depth of Mr. Murayama's commitment to the security alliance in view of his decades-long opposition to the U.S.-Japan Mutual Security Treaty; he abruptly and opportunistically appeared to disregard this opposition when given the chance to assume the helm of an unwieldy ruling coalition comprised of his Social Democratic Party of Japan, the Liberal Democratic Party and the New Sakigake Party. Mr. Hashimoto's stated resolve to "firmly maintain [U.S.-Japan] security arrangements" as well as his decision to dispatch Mr. Ikeda to Washington barely one week after forming his new government (see JEI Report No. 2B, January 19, 1996) sent a clear signal to Washington, experts say, that the new Japanese leader, who heads the same coalition government as his predecessor, values highly the foundation on which overall political and economic relations rests. Moreover, the new LDP-led administration will not be weighed down by the pacifist "baggage" of its coalition partner in considering defense-related matters, the remarks by Messrs. Hashimoto and Ikeda seemed to suggest.

Concerning the hot-button issue of U.S. military installations on Okinawa, Mr. Hashimoto sought a middle ground, hoping to balance the desire of conservative elements within his government and of the Pentagon to continue to maintain about 47,000 U.S. troops on Japanese soil with the deeply held wish of many Okinawa residents to rid their islands of the overwhelming burden of this base presence. Some 75 percent of local U.S. military installations are on Okinawa. Mr. Hashimoto said he was determined to proceed with realignment, consolidation and reduction of these facilities "in harmony with the objectives of the U.S.-Japan security treaty … paying maximum consideration to the sorrow and suffering of the people of Okinawa over the years."

Although the rape tragedy gave the matter of troop allocation a higher profile, residents of Japan's southernmost prefecture for many years pressed this issue with Tokyo to no avail. In an effort to force the central government's hand Okinawa Governor Masahide Ota last November took the dramatic step of refusing to sign documents that would compel unwilling Okinawa landowners to continue leasing property to the U.S. military. Tokyo now is engaged in litigation that ultimately will enable the prime minister to override Mr. Ota's resistance. At the same time, however, the central government and the Okinawa prefectural government formed a special forum to facilitate internal discussions on the consolidation and the realignment of U.S. forces stationed on Okinawa (see JEI Report No. 42B, November 10, 1995). This group coordinates closely with a bilateral entity that was established by Tokyo and Washington last October to examine these same issues (see JEI Report No. 41B, November 3, 1995).

The new foreign minister, in fact, zeroed in on the latter group's work in his January 19 meetings with Secretary of State Warren Christopher and National Security Adviser Anthony Lake. Mr. Ikeda emphasized that the Hashimoto government would like to develop a clear policy on troop consolidation and reallocation in time for Mr. Clinton's visit to Japan and to have resolved the matter by the fall. In his subsequent briefing to the American press, however, Japan's chief diplomat acknowledged that it may be hard to stick to this timetable because the demands of residents on Okinawa for a drastic reduction of troops stationed there may not necessarily best serve Japan's security interests. "We have to allow the United States to perform its [security] obligation," Mr. Ikeda reportedly said. Some analysts see in this comment a suggestion that the U.S. troop level in Japan will remain at about 47,000 and that the relocation of American forces to other parts of Japan may prove problematic in the near term.

On other foreign policy-related issues Mr. Hashimoto further underscored differences in his philosophy and leadership style from that of his predecessor by emphasizing the need for before-the-fact, rather than reactive, diplomacy. Mr. Murayama, who did not hide his discomfort in dealing with foreign policy issues, behaved tentatively in the global arena. The new premier, however, urged that "Japan … advanc[e] beyond the traditional concept of international contributions and take active initiatives for world stability, while postulating ideals that the rest of the world will embrace." Mr. Hashimoto specifically called for Tokyo to pursue a more engaged foreign policy toward the Asian Pacific region by taking a more active role in the political and security dialogue conducted by such regional forums as the Asean [Association of Southeast Asian Nations] Regional Forum. He also said that Japan would contribute actively to United Nations-sponsored peacekeeping operations by providing both personnel and financial support. In addition, Mr. Hashimoto committed Tokyo to playing a significant part in supporting the international community's efforts to facilitate peace and reconstruction in Bosnia as well as to further the Middle East peace process.

Perhaps reflecting the influence of pacifists in the tripartite union, the new premier took a cautious stance on whether Japan should pursue a permanent seat on the U.N. Security Council. He said that his government would deal with this matter based on broader efforts to reform the multilateral organization and also would take into account support from the Japanese people and the positions of Asian neighbors. Pacifists both in and out of the government have argued that Japan risks running afoul of its "peace constitution" by assuming a permanent Security Council seat. Their contention is that Japan may be pressured to send its military into potential conflict situations if it were to vote for such U.N. action in the Security Council.

Mr. Hashimoto — who, until his January 11 election as prime minister, served for 18 months as minister of international trade and industry — did not dwell on U.S.-Japan trade frictions in his Diet speech, which marked the start of the regular 1996 legislative session. This may have surprised some observers since the new prime minister gained notoriety on both sides of the Pacific last year for driving a hard bargain with U.S. Trade Representative Mickey Kantor on trade in automotive products (see JEI Report No. 24B, June 30, 1995). Mr. Hashimoto said only that his administration would strive "to manage this relationship appropriately, consistent with international rules [and] based on the steady implementation of … the measures decided on in the recent U.S.-Japan framework talks."

Mr. Ikeda, however, apparently got into the sticky wicket of trade disputes in his discussions with Mr. Christopher. The U.S. secretary of state reportedly told his Japanese counterpart that the two governments should cooperate in trade disputes to prevent discord from overshadowing Mr. Clinton's visit since the central purpose of this summit is to reaffirm U.S.-Japan security ties. Specifically, Mr. Christopher reportedly pressed Mr. Ikeda on implementation of the framework-negotiated insurance agreement, renewal of the semiconductor trade accord that expires in July and elevation to government-level negotiations of the dispute concerning market access in Japan for U.S.-made photographic film and paper. The Japanese foreign minister was said to have rejected Washington's demands concerning trade in film and semiconductors, referring to Mr. Hashimoto's hard-line stance on these matters as MITI chief (see JEI Report No. 40B, October 27, 1995, and No. 47B, December 22, 1995). Mr. Ikeda concurred, however, that these trade disagreements should not sour the atmosphere for the much-anticipated Clinton-Hashimoto summit.

The main themes of Mr. Hashimoto's Diet speech concerned reform and creation of a new system for Japan. Drastic political, economic, administrative and social reform is needed as Japan approaches the 21st century, he said. His cabinet, the prime minister noted, would tackle four central issues: restoration of a strong Japanese economy, construction of a society where people live long and well, implementation of an independent diplomacy for the creation of peace and prosperity and the promotion of administrative and financial reform.

While the new prime minister's more outward-looking approach to diplomacy may cause some discomfort among his ruling coalition colleagues, political commentators suggest that financial reform clearly is the most prickly issue facing Mr. Hashimoto and ultimately may prove to be his undoing. The most controversial aspect of the FY 1996 budget, which Mr. Hashimoto must shepherd through the Diet before April 1, is a plan to tap ¥685 billion ($6.9 billion at ¥100=$1.00) in taxpayer funds to bail out seven troubled housing loan companies, called jusen (see JEI Report No. 47B, December 22, 1995). Public opinion polls have shown that the public objects strongly to the plan. The new premier in his policy address vowed to disclose all information related to the impending bankruptcies of the jusen and to build a new, more transparent financial system.

Some commentators are skeptical, however, that Mr. Hashimoto can win over the body politic since the crisis has its origins in policies pursued at the start of the 1990s when he served as minister of finance in the government of then Prime Minister Toshiki Kaifu. The prime minister may be so overwhelmed by the jusen crisis, these analysts say, that the remainder of his economic agenda, which includes an ambitious deregulation plan, may never see the light of day. Thus, while Mr. Hashimoto established an assertive, activist tone for his government in his opening Diet speech, his efforts to match rhetoric with action may be limited by the jusen problem, the seeds of which he himself may have helped to sow six years ago.

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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