Defending an Economic Superpower

Reassessing the U.S.-Japan Security Alliance

Tetsuya Kataoka

• Publisher: Routledge
• Year: 2019
• Print ISBN: 9780367003364
• eBook ISBN: 9780429710148
• Edition: 1
• Topic: History
• Subtopic: Military & Maritime History
• Index: History

This book describes the reassessment of the U.S.-Japan security relationship to determine how Japan can do more for its defense, reduce America's spending for Japan's and Asia's security, yet preserve the peace in that region. It raises six questions about the relationship and tries to answer them.

1
Posing the Problem

By 1988, a new argument began to receive serious consideration in the United States: American security commitments throughout the globe could no longer be maintained at their current levels without a substantial sharing of that burden with allies.

We also believe the American economy has been growing more slowly than other advanced economies and probably cannot support American security commitments in the near future at the same level as in the recent past. This perception that America's relative economic decline does not augur well for the support of her global security commitments can be found in many recent writings.

Paul Kennedy's sweeping tour d'horizon narrating how Austria, England, the United States, and other countries expanded their spheres of influence, only to see them decline, makes the case that when a country's economic capabilities begin to decline, its sphere of influence can no longer be maintained by military power.¹ David P. Calleo's probing analysis of the tensions emerging within the Western European alliance in recent decades because of increasing costs also shows that within the next decade or so some new cooperative arrangement between European states will most likely emerge to maintain Western Europe's security, thus replacing American dominance in NATO.² Samuel P. Huntington's recent essay in Foreign Affairs describes how the gap between America's security commitments and her ability to maintain those commitments could be corrected by substitute arrangements, but only if allies exert greater effort to share the burden, such as paying a defense tax to the United States.³

In March 1988, the Center for Strategic and International Studies in Washington assembled a bipartisan group of business and government leaders, headed by William E. Brock, the former special trade representative and secretary of labor in the Reagan administration. The group offered these central findings:

• Although the U.S. economy is still the most powerful in the world, unless foreign trade and productivity improve, its standing relative to other major economies will continue to decline.
• U.S. industry is still at the forefront of innovation, but other countries have narrowed the gap, and some are even surpassing it in many manufacturing applications.
• America's security obligations have remained unchanged in recent decades, while economic competition with her allies has intensified, thus weakening America's competitive edge.⁴

The conclusion, based on the above findings, was that the United States can no longer afford to maintain its current security commitments.

Whatever the reasons for the decline of the United States in its relative economic standing with other countries—a falling saving rate, sagging productivity, or a slowing pace of innovation—new economic competition from abroad has jolted many in the United States to reassess America's economic capabilities. The new economic competition, of course, has originated from broad changes in the world's production structure, especially in the Pacific Basin. By the 1960s, Japan had begun restructuring its economy, and she was followed in the 1970s and 1980s by other countries in the Pacific Basin doing the same thing. The surge in gross national product and foreign trade in that part of the world inspired some observers to predict that the next century would be the "Pacific Century."⁵

Today, Japan's gross national product is more than 50 percent that of the United States, and her economy is growing slightly faster. The total exports of the four Little Tigers—Hong Kong, Singapore, the Republic of China on Taiwan, and South Korea—are projected to reach 80 percent of Japan's in 1989. Given the booming economies of Malaysia, Thailand, and the People's Republic of China, when the twenty-first century begins, the region of North and Northeast Asia could well account for more than 25 percent of the world's total production, versus less than 30 percent for North America. The comparable numbers now are 20 percent and 28 percent, respectively.⁶ These developments have only increased America's trade imbalance with the Pacific Basin.

In 1981, the U.S. deficit with Asia's four newly industrialized countries of South Korea, the Republic of China, Hong Kong, and Singapore was $6.1 billion; it reached $37 billion in 1987, or 22 percent of the total U.S. trade deficit⁷ But it was the economic dominance of Japan in Asia and its emergence as a new world economic superpower that eventually focused our concern on the U.S.-Japanese relationship. While drawing 23 percent of all imports from the United States, Japan ran a whopping bilateral trade surplus in 1987 of $51.4 billion.⁸ But that figure was only $6.9 billion in 1980, and Japan had a deficit of $459 million in 1975. Indeed, dramatic change in U.S.-Japanese economic relations had occurred in the 1980s.⁹

By 1986, some severely criticized Japan for its unfair economic policies, which were supposed to be undermining America's economic competitive edge. For example, Karel G. van Wolferen urged American policy-makers to take strong action to force the Japanese to change their trading practices.¹⁰ But Japan was being criticized not only for its economic policies. In the spring of 1986, there appeared a sharp attack on Japan that criticized it for paying too little for its defense and that urged Japan to do more to help the United States prevent the balance of power in the Pacific Basin from shifting toward the Soviet Union. The attack, an advertisement in the New York Times, was signed by scholars and policy-makers from the United States, the Republic of Korea, and even Japan. It called upon Japan to "do more to protect its coasts, straits, sea lanes and airspace from Soviet domination." To that end, the advertisement asked that Japan make "a substantial increase in defense spending."¹¹

By the mid-1980s, the U.S. government was running the largest budget deficit in its history, and the United States had become the world's largest debtor country. A flood of journal articles and newspaper editorials discussed why Japan spent so little for defense and how Japan could do more to help the United States defend the Pacific Basin.¹² For almost twenty years Japan had spent slightly less than 1 percent of its gross national product for its defense, as compared to the United States' 7.1 percent in 1972, 5.4 percent in 1980, and 6.9 percent in 1987.¹³ Why should the United States outspend the Japanese some five to seven times for defense while going deeper into debt?

Japan's not spending more for defense and her allegedly unfair ways of doing business with the United States were certainly the two main reasons why relations between Japan and the United States soured in the 1980s. Not since the end of World War II have relations between the two allies been so poor. These two issues are now even more relevant to the new debate in the United States over whether America can defend the globe if its economy is faltering and social problems are worsening.¹⁴ Although some argue that the U.S. economy is still healthy and will readily grow in the coming decades, others are already reassessing America's security alliance with its allies to ask whether those alliances are being managed to the best interests of the United States. Melvyn Krauss and David P. Calleo, for example, have found the NATO security arrangement flawed and have suggested that the U.S. contribution to NATO be reduced and that our NATO allies do more for Europe's defense.

The Scope of This Study

Our study reassesses the U.S.-Japan security relationship to determine how Japan can do more for its defense, reduce America's spending for Japan's and Asia's security, and yet preserve the peace in that region. We raise six questions about the U.S.-Japan security relationship and try to provide answers from the historical record.

The first question asks how Japan and the United States agreed to a security alliance in the first place. Chapter 2 reviews the origin of the postwar U.S.Japanese security relations that allowed Japan to concentrate on developing its economy while enjoying a "free ride." This historical review covers the developments from the early years of the American occupation of Japan up to 1975. Our account shows that the American occupation authorities drew up a new constitution for Japan that contained the famous Article IX, by which Japan pledged to "forever renounce war as a sovereign right of the nation and the threat or use of force as a means of settling international disputes." But then the United States reversed itself in 1951 and proposed that Japan enter into a new security treaty that allowed America to have military bases in Japan in return for protecting Japan. Shigeru Yoshida, prime minister from October 1948 to October 1954, was the political leader who opted for the strategy under which Japan would accept the new constitution and the security treaty, thus giving the country free rein to devote all its energies to economic development.¹⁵ This policy became known as the Yoshida strategy.

Although this strategy worked successfully until the mid-1970s, continued Soviet military expansion and that country's invasion of Afghanistan in the late 1970s forced the United States to begin building up its arms and to demand that its allies do the same. Late in the Carter administration, as well as during the Reagan administration, American officials strongly pressed the Japanese government to accelerate defense spending and cooperate more closely with the United States in the Northeast Pacific. Because of these external pressures on Japan, the Yoshida strategy was modified, and Japan began a moderate arms expansion. Chapter 2 describes the refinement of the Yoshida strategy under these new circumstances.

By the late 1970s, the U.S.-Japan security alliance also came under careful scrutiny by Japan's policy-makers and leaders, which brings us to our second question: Why did the Japanese reexamine the U.S.-Japan security alliance, and what strategy did they finally adopt by the mid-1980s that still remains in place? Chapter 3 answers these questions by reviewing the different points of view being expressed in the media about the perceived threats to Japan's security and how to deal with them. For the first time, many Japanese are openly expressing a concern about the new expansion of Soviet military power in the Pacific Basin and a possible U.S. withdrawal from that region.

By 1978, the Soviet Union had fortified Soviet bases in Japan's Northern Territories, then occupied by the Soviet Union. That November, the Soviet Union concluded a treaty of friendship with Vietnam and acquired basing rights in Vietnam. By 1980, the Soviet Union had turned Cam Ranh Bay into an important military base.¹⁶ Soviet aircraft operated from Da Nang, and Soviet diesel-powered submarines were photographed in Cam Ranh Bay. This new military thrust by Moscow gave Soviet leaders the opportunity to control the sea routes linking the Pacific with the Indian Ocean and beyond, if the United States did decide to retreat from Asia.

Many interpreted these developments as an adverse shift in the balance of power for Japan and believed that she should quickly strengthen her defenses. In the early 1980s, the United States began urging Japan to expand its Self-Defense Forces and to cooperate more closely with American air and naval forces to monitor and defend the sea-lanes within 1,000 nautical miles of Japan. Yet the United States was really unwilling to ask Japan to do any more than that, fearing adverse Asian reaction. Therefore, the United States asked Japan to increase spending for foreign aid to Third World countries and to underwrite more of the costs of maintaining American military bases in Japan.

The outcome of this reassessment of the U.S.-Japan security relationship was greater Japanese defense spending but not a significant increase in Japan's share of the burden. To show how the new consensus that facilitated these developments was reached, we identify five groups and their perceptions and responses to the U.S.-Japan security relationship. From these five different viewpoints, a mainstream view emerged that merely endorsed the completion of Japan's 1976 defense plan by 1990. Under this plan, Japan will not have any military offensive capability; she will still be protected by America's nuclear shield; and the United States will still enjoy its hegemonic relationship with Japan.

In all democracies, support of the media and the public is crucial for the success of government policies. Our third question asks how the Japanese media perceived Japan's foreign relations with the Soviet Union, the United States, and other Asian countries, and whether public opinion on defense underwent any fundamental change between the 1960s and the 1980s. We find that before the late 1970s powerful newspapers in Japan were critical of U.S. foreign policy and interpreted major events in Asia from a left-of-center point of view. Although one of the top three dailies became slightly supportive of more defense spending in the 1980s and more critical of the Soviet Union's military buildup in Asia, the rest still opposed any change in the status quo for Japan's security relations with the United States.

Meanwhile, public opinion in the 1980s generally supported more defense spending, provided that overall defense spending did not increase abruptly. Although Japanese national pride was piqued by mounting American criticism over the trade issue and the defense "free ride" issue, neither the media nor dominant public opinion has shown any signs of revising the U.S.-Japan security relationship and dramatically altering Japan's defense policies.

In many countries, a defense industry becomes linked to powerful interest groups in the government and to powerful business enterprises eager for lucrative state contracts for military procurement. Our fourth question asks whether Japan's defense industry has become a new force to lobby for more defense spending and whether there are interest groups with ties to the defense industry that could promote a resurgent militarism, as some critics fear.¹⁷ Chapter 5 describes how the military procurement by the Self-Defense...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• Tables and Illustrations
• Acknowledgments
• 1 Posing the Problem
• 2 The Yoshida Strategy and Its Revision
• 3 The National Debate over Security
• 4 The Press and Public Opinion
• 5 The Defense Industry
• 6 The Armed Services
• 7 America's Defense of Asia and the Pacific Basin
• 8 Reassessing the U.S.-Japan Alliance
• Bibliography
• Index