Pacific Forum CSIS Comparative Connections A Quarterly E-Journal on East Asian Bilateral Relations edited by Carl Baker Brad Glosserman 2nd Quarter (April – June) 2010 Vol. 12, No.2 July 2010 http://csis.org/program/comparative-connections 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 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 Carl Baker and Brad Glosserman Volume 12, Number 2 Second Quarter (April-June) 2010 Honolulu, Hawaii July 2010 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 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 quarterly electronic journal on East Asian bilateral relations edited by Carl Baker and Brad Glosserman, 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 US. We regularly cover 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 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 Hopes and Plans Torpedoed; Strategies Outlined by Ralph A. Cossa and Brad Glosserman, Pacific Forum CSIS Hopes for a resumption of Six-Party Talks this past quarter were torpedoed when an international investigation team concluded that the ROK Navy ship Cheonan was deliberately attacked by a North Korean submarine. The Chinese fired a warning shot of their own by denying Defense Secretary Gates’ request for a China visit after the Shangri-La Dialogue in June. Regional multilateral activity included the fourth ASEAN Defense Ministers Meeting, the third China- Japan-South Korea Trilateral Summit, and the 10th Shanghai Cooperation Organization (SCO) Summit. Globally the G8 and G20 met for the first time back-to-back in Canada and the first ever Nuclear Security Summit involving leaders and other senior officials from 49 countries met in Washington. The Obama administration published its overdue National Security Strategy and Nuclear Posture Review reports, outlining its overall strategic priorities and the (diminished) role of nuclear weapons as, together with Moscow, Washington made a New START toward its declared goal of a nuclear weapons-free world. Finally, it’s been a rough quarter politically in East Asia, especially in Thailand where “red shirt” protests and government reactions both turned violent. In Japan and Australia there were unexpected changes in government. US-Japan Relations:…..………………………………………………………………………..21 New Realism by Michael J. Green, CSIS/Georgetown University, and Nicholas Szechenyi, CSIS The relocation of Marine Corps Air Station Futenma on Okinawa remained the predominant issue in the US-Japan relationship and the two governments issued a joint statement in late May reaffirming a commitment to realize a plan adopted in 2006 with some modifications to be explored. Prime Minister Hatoyama then resigned as polls revealed frustration with his handling of the Futenma issue and weak leadership overall. Finance Minister Kan Naoto succeeded Hatoyama as premier and outlined his own policy priorities just weeks before an important parliamentary election. Kan stressed the centrality of the US-Japan alliance to Japanese diplomacy and reiterated the theme in his first meeting with President Obama at the G8 Summit in late June. The two leaders’ first meeting was business-like and lacking for drama – exactly as both governments had hoped. New public opinion polls suggested political turmoil at home has not had a significant impact on Japan’s standing globally or in the US, but some observers continued to suggest the US should lower expectations of Japan as an ally in the debate about the future of the alliance. iii US-China Relations:……..……………………………………………………………………..33 Cooperation Faces Challenges by Bonnie Glaser, CSIS/Pacific Forum Presidents Barack Obama and Hu Jintao met twice this quarter, first on the sidelines of the Nuclear Security Summit in Washington in April and again on the margins of the G20 Summit in Toronto in June. Nevertheless, tensions lingered over US arms sale to Taiwan and the military relationship remained suspended. The Chinese rejected a request from Secretary of Defense Robert Gates to visit China. The second round of the Strategic and Economic Dialogue was held in Beijing in late May, yielding agreements on energy, trade environment, and healthcare. Many hours were spent during the quarter in discussions between the two countries on an appropriate response to the sinking of the South Korean warship, but the gap was not narrowed. In June, China finally announced the long-awaited decision to allow its currency to be more flexible, though it remains unclear how fast and to what extent it will permit the yuan to appreciate. US-Korea Relations:...………………………………………………………………………….47 The Sinking of the Cheonan by Victor Cha, CSIS/Georgetown University and Ellen Kim, CSIS The second quarter saw a series of major events in US-ROK relations. The North Korean torpedo attack on the South Korean warship caused the two Koreas to break ties, intensified the tension along the border, and blasted hopes for the resumption of the Six-Party Talks. Meanwhile, the US-ROK alliance was at its zenith as the US showed solidarity with South Korea on its response to the provocation and put pressure on China to support a strong UN Security Council measure identifying North Korea as being responsible for the attack. The two presidents announced a delay in transfer of wartime operational control and President Obama called for ratification of the KORUS FTA. Though these two developments were not a direct result of the Cheonan sinking, they were influenced by a desire by both allies to show strong, deep partnership in the face of North Korean threats, and perhaps more important, by a personal chemistry between the two leaders that is unique in the history of the alliance. US-Southeast Asia Relations:…..……………………………………………………...............57 Thai Turmoil; President Postpones Indonesia Trip Again by Sheldon Simon, Arizona State University In mid-May, long-simmering political tension in