Pacific Forum CSIS Comparative Connections A Quarterly E-Journal on East Asian Bilateral Relations edited by Brad Glosserman Carl Baker 3rd Quarter (July-September) 2008 Vol. 10, No. 3 October 2008 www.csis.org/pacfor/ccejournal.html Pacific Forum CSIS Based in Honolulu, Hawaii, the Pacific Forum CSIS operates as the autonomous Asia- Pacific arm of the Center for Strategic and International Studies in Washington, D.C. Founded in 1975, the thrust of the Forum’s work is to help develop cooperative policies in the Asia- Pacific region through debate and analyses undertaken with the region’s leaders in the academic, government, and corporate arenas. The Forum’s programs encompass current and emerging political, security, economic/business, and oceans policy issues. It 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. An international Board of Governors guides the Pacific Forum’s work. The Forum is funded by grants from foundations, corporations, individuals, and governments, the latter providing a small percentage of the forum’s $1.2 million annual budget. The Forum’s studies are objective and nonpartisan and it does not engage in classified or proprietary work. Comparative Connections A Quarterly E-Journal on East Asian Bilateral Relations Edited by Brad Glosserman and Carl Baker Volume 10, Number 3 Third Quarter (July-September) 2008 Honolulu, Hawaii October 2008 Comparative Connections A Quarterly Electronic Journal on East Asian Bilateral Relations 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 U.S., 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 quarterly electronic journal on East Asian bilateral relations edited by Brad Glosserman and Carl Baker, with Ralph A. Cossa serving 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 U.S. We regularly cover 12 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 U.S.-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 India or Australia’s significant relationships) as events dictate. Our aim is to inform and interpret the significant issues driving political, economic, and security affairs of the U.S. 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 quarter. 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. Comparative Connections: A Quarterly Electronic Journal on East Asian Bilateral Relations (print ISSN 1930-5370, online E-ISSN 1930-5389) is published four times annually (January, April, July, and October) at 1003 Bishop Street, Pauahi Tower, Suite 1150, Honolulu, HI 96813. Table of Contents Regional Overview:………………………………………………………………………………1 Inaction for Inaction, with Unhelpful Reactions by Ralph A. Cossa and Brad Glosserman, Pacific Forum CSIS Hopes of progress in the Six-Party Talks evident in the closing days of the previous quarter were quickly dashed as disagreements over verification of North Korea’s nuclear declaration created a stalemate still in evidence at quarter’s end. The only movement was backward, as “action for action” was replaced by inaction and worse. Last year, Secretary of State Condoleezza Rice made news by not showing up at the annual ASEAN Regional Forum ministerial. This year she went and hardly anyone noticed. The democratic process made for interesting watching this quarter, not only in Thailand and Malaysia, but in East Asia’s most established democracy, as Japan saw its third leader in the 24 months since Prime Minister Koizumi departed the scene. The once presumably left for dead U.S.-India nuclear deal was reincarnated by the Indian Parliament this quarter with the U.S. Congress following suit at quarter’s end and President Bush’s signature in early October. Finally, the U.S. sneezed this quarter and the rest of the world did catch cold, even as Wall Street struggles with a serious bout of pneumonia. Economic policy also dominated the “foreign policy debate” between Senators Obama and McCain, with no questions and only sparse references to Asia throughout. U.S.-Japan Relations:…………………………………………………………………………..15 Weathering Political and Economic Turmoil by Michael J. Green, CSIS, and Nicholas Szechenyi, CSIS The quarter began with President Bush and Prime Minister Fukuda meeting on the sidelines of the G8 summit in Hokkaido, but their bilateral agenda and Fukuda’s own premiership were eclipsed by dramatic political and economic developments in both countries. Fukuda resigned suddenly on Sept. 1 having failed to convince the public he could strengthen the economy and move important legislation through a divided legislature. Aso Taro won the Liberal Democratic Party (LDP) presidential race and began his tenure as prime minister stressing economic stimulus measures, the importance of the U.S.-Japan alliance, and Japan’s role as a global leader. Meanwhile, the U.S. struggled to contain a financial crisis that rattled world markets, prompting Japanese banks to take major stakes in ailing U.S. businesses. A successful ballistic missile defense test in September augured well for sustained bilateral defense cooperation, assuming defense budgets survive the current financial turmoil. And North Korea’s move toward reprocessing plutonium at Yongbyon threatened to erase the diplomatic progress made in the Six-Party Talks at a time when leaders in Washington and Tokyo already had plenty of diplomatic challenges and tough domestic elections to manage. iii U.S.-China Relations:…………………………………………………………………………..23 Olympics Boost Chinese Pride and U.S.-China Relations by Bonnie S. Glaser, CSIS/Pacific Forum CSIS The Beijing Olympic Games were conducted without a hitch to the great relief of the Chinese leadership and the 1.3 billion Chinese people who had long anticipated the momentous event. Abroad, the reviews were mixed. Most agreed that the opening ceremony was spectacular and that China had successfully ensured the safety of the athletic competitions, but many argued that these goals had been achieved at a significant cost that highlighted the undemocratic nature of China’s regime. President Bush’s attendance further consolidated an already close and cooperative U.S.-Chinese relationship, even though Bush seized on several opportunities to criticize China’s human rights practices. The U.S.-China Joint Commission on Commerce and Trade (JCCT) marked its 25th anniversary with agreements on food security, loans for medical equipment purchase, promotion of digital TV, and cooperation in agriculture and on trade statistics. The U.S. presidential campaign heated up, but China received little attention. U.S.-Korea Relations:………………………………………………………………………….37 Déjà vu All Over Again? by Victor Cha, Georgetown University/Pacific Council on International Policy The big news in the penultimate quarter of 2008 centered on leadership ills (literally) in North Korea and Pyongyang’s rolling back of the six-party denuclearization agreement. On the U.S.- ROK front, President George W. Bush made his last trip to Asia of his presidency, stopping for a brief visit in South Korea on his way to the Beijing Olympics. While the free trade agreement remains mired in U.S. domestic politics, important low-key agreements were reached to help bolster the people-to-people aspects of the alliance. As the quarter ended, the Bush administration was making preparations to make what some described as a last-ditch effort to salvage the deal with North Korea by sending Six-Party Talks negotiator Christopher Hill to Pyongyang for a third time. U.S.-Russia Relations:………………………………………………………………………….45 Have Relations Hit Rock Bottom? by Joseph Ferguson, National Council for Eurasian and East European Research Throughout the spring and early summer it seemed that U.S.-Russia relations could sink no further. Ill will beset the relationship. At one point, Vladimir Putin compared the U.S. to a “frightening monster,” while Senator (and Republican presidential nominee) John McCain called for Russia’s eviction from the G8. In August, the worsening situation came to a head when Russian troops invaded and occupied South Ossetia (a Georgian Province), and launched attacks on other Georgian cities. The U.S. reaction was swift: condemnation, followed by the transport home of Georgian combat troops deployed in Iraq, the ferrying of supplies to Georgian ports by U.S. warships, the extension of $1 billion in aid, and the deployment of a small contingent of U.S. troops for “humanitarian” missions in Georgia.