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December 2018 Vol. 20, No. 3 January 2019 EDITED BY CARL BAKER BRAD GLOSSERMAN CREATIVE DIRECTOR NICHOLAS CIUFFETELLI SEPTEMBER – DECEMBER 2018 VOL. 20, NO. 3 JANUARY 2019 CC.PACFORUM.ORG PACIFIC FORUM Founded in 1975, the Pacific Forum is a non-profit, foreign policy research institute based in Honolulu, Hawaii. The Forum’s programs encompass current and emerging political, security, economic and business issues and works to help stimulate cooperative policies in the Asia Pacific region through analysis and dialogue undertaken with the region’s leaders in the academic, government, and corporate areas. The Forum collaborates with a network of more than 30 research institutes around the Pacific Rim, drawing on Asian perspectives and disseminating its projects’ findings and recommendations to opinion leaders, governments, and publics throughout the region. We regularly cosponsor conferences with institutes throughout Asia to facilitate nongovernmental institution building as well as to foster cross- fertilization of ideas. A Board of Directors guides the Pacific Forum’s work. The Forum is funded by grants from foundations, corporations, individuals, and governments. The Forum’s studies are objective and nonpartisan and it does not engage in classified or proprietary work. EDITED BY CARL BAKER, PACIFIC FORUM BRAD GLOSSERMAN, TAMA UNIVERSITY CRS/PACIFIC FORUM CREATIVE DIRECTOR NICHOLAS CIUFFETELLI, PACIFIC FORUM SEPTEMBER – DECEMBER 2018 VOL. 20, NO. 3 JANUARY 2019 HONOLULU, HAWAII COMPARATIVE CONNECTIONS A TRIANNUAL E-JOURNAL OF BILATERAL RELATIONS IN THE INDO-PACIFIC Bilateral relationships in East Asia have long been important to regional peace and stability, but in the post-Cold War environment, these relationships have taken on a new strategic rationale as countries pursue multiple ties, beyond those with the US, to realize complex political, economic, and security interests. How one set of bilateral interests affects a country’s other key relations is becoming more fluid and complex, and at the same time is becoming more central to the region’s overall strategic compass. Comparative Connections, Pacific Forum’s triannual e-journal of bilateral relations in the Indo-Pacific, edited by Carl Baker and Brad Glosserman, with Carl Baker as senior editor, was created in response to this unique environment. Comparative Connections provides timely and insightful analyses on key bilateral relationships in the region, including those involving the US. We regularly cover the key bilateral relationships that are critical for the region. While we recognize the importance of other states in the region, our intention is to keep the core of the e-journal to a manageable and readable length. Because our project cannot give full attention to each of the relationships in Asia, coverage of US-Southeast Asia and China-Southeast Asia countries consists of a summary of individual bilateral relationships, and may shift focus from country to country as events warrant. Other bilateral relationships may be tracked periodically (such as various bilateral relationships with Australia, India, and Russia) as events dictate. Our Occasional Analyses also periodically cover functional areas of interest. Our aim is to inform and interpret the significant issues driving political, economic, and security affairs of the US and East Asian relations by an ongoing analysis of events in each key bilateral relationship. The reports, written by a variety of experts in Asian affairs, focus on political/security developments, but economic issues are also addressed. Each essay is accompanied by a chronology of significant events occurring between the states in question during the reporting period. A regional overview section places bilateral relationships in a broader context of regional relations. By providing value-added interpretative analyses, as well as factual accounts of key events, the e-journal illuminates patterns in Asian bilateral relations that may appear as isolated events and better defines the impact bilateral relationships have upon one another and on regional security. The online version of Comparative Connections is available at https://cc.pacforum.org. Comparative Connections: A Triannual E-Journal of Bilateral Relations in the Indo-Pacific (print ISSN 1930- 5370, online E-ISSN 1930-5389) is published three times annually (January, May, and September) at 1003 Bishop Street, Suite 1150, Honolulu, HI 96813. TABLE OF CONTENTS REGIONAL OVERVIEW MESSAGES SENT VERSUS MESSAGES RECEIVED .............. 1 BY RALPH COSSA, PACIFIC FORUM & BRAD GLOSSERMAN, TAMA UNIVERSITY CRS/PACIFIC FORUM Speeches before and during US Vice President Pence’s trip to Asia (substituting for President Trump) for the annual fall round of summitry added flesh to the bones of Washington’s Indo-Pacific strategy but did little to allay concerns about an impending trade war (or worse) between the US and China. While Pence was not asking anyone to choose between Washington and Beijing, he made it abundantly clear what he thought the best choice would be. While he did not rule out a restoration of good relations with Beijing – once it started behaving itself – most Asians heard his remarks, and those from Trump and other senior officials, as signals that a China-US Cold War had already begun. Meanwhile, the administration’s preference for tariffs as the weapon of choice was seen not as a tool to bring about a “free and open Indo-Pacific” but as a sledgehammer aimed at persuading US firms to return to US protectionist shores. As the president and his team declared their love for bilateral trade deals, Asians pressed ahead with their own multilateral initiatives. Looking ahead, like it or not, the China-US relationship appears to be the dominating feature of the Indo-Pacific economic and security environment. US-JAPAN RELATIONS STABILITY IN TOKYO, DISRUPTION IN WASHINGTON ... 13 BY SHEILA A. SMITH, COUNCIL ON FOREIGN RELATIONS & CHARLES T. MCCLEAN, UNIVERSITY OF CALIFORNIA, SAN DIEGO 2018 came to a relatively quiet close for the US and Japan. Prime Minister Abe Shinzo secured a third term as leader of the Liberal Democratic Party (LDP) in a party election on Sept. 20 and is now set to be Japan’s longest serving prime minister. In contrast, President Donald Trump faced an electoral setback in the November midterms. With Democrats taking over the House of Representatives in January, pressure on the administration will grow. In December, Trump dismissed Chief of Staff John Kelly and Defense Secretary James Mattis, and locked horns with the incoming Democratic Party leadership over funding for his border wall. Nevertheless, the US-Japan relationship seemed steady. In September, Prime Minister Abe agreed to open bilateral trade talks and in return sidestepped the Trump administration’s looming auto tariffs. Yet there are differences over their goals, suggesting that continued compromise will be needed. Abe worked hard in numerous summits to position Japan in Asia in the final months of 2018. He visited China, hosted India’s prime minister in Tokyo, and restarted the negotiations with Russia on the northern territories. Japan also announced its next long term defense plan and a five-year, $240 billion implementing procurement plan that includes a considerable investment in modern US weapon systems. III US-CHINA RELATIONS A DEAL IS STRUCK IN BUENOS AIRES ........................... 21 BY BONNIE S. GLASER, CSIS & KELLY FLAHERTY, CSIS On the sidelines of the G20 summit, Donald Trump and Xi Jinping put tariff hikes on hold and agreed to resume trade negotiations. Prior to the agreement, the US-China spat spilled over into the multilateral arena causing the first-ever failure to reach a joint communique at the Asia-Pacific Economic Cooperation (APEC) meeting in Port Moresby, Papua New Guinea. The imposition of sanctions by the US on the People’s Liberation Army’s Equipment Development Department and its director resulted in a temporary setback in military ties. The US took actions against Chinese individuals and hacking rings for allegedly stealing US technology to gain commercial advantage. The second US-China Diplomatic and Security Dialogue was held in Washington DC. Trump and Xi talked by phone in November and December. US-KOREA RELATIONS PATIENCE, TACK AND IMPASSE ................................... 35 BY STEPHEN NOERPER, KOREA SOCIETY AND COLUMBIA UNIVERSITY Despite an impasse in the US-DPRK dialogue, the United States and Republic of Korea largely voiced common cause while tacking to new realities. The allies showed flexibility by continuing the drawdown in military exercises and destroying military posts along the demilitarized zone following the Moon-Kim summit in Pyongyang. The outgoing and incoming USFK commanders both acknowledged challenges to readiness, but spoke in support of inter-Korean efforts to reduce military tensions. Secretary of State Mike Pompeo bristled at inter-Korean accords made without US consultation, while President Moon Jae- in credited the alliance with facilitating the dramatic improvements in inter-Korean relations. Moon sought to spur a second Trump-Kim Jong Un summit, with both seemingly committed. Chairman Kim Jung Un and Pompeo met in October, yet North Korea turned away both Pompeo and the new US special representative for North Korea policy, Stephen Biegun, a month later over sanctions concerns and a block on US aid workers. The US and ROK tacked on an updated KORUS free trade agreement and the launch of a bilateral working group aimed at coordinating North Korea policy. Domestic political developments
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