Pacific Forum CSIS Comparative Connections A Quarterly E-Journal on East Asian Bilateral Relations edited by Carl Baker Brad Glosserman 3rd Quarter (July – September) 2010 Vol. 12, No.3 October 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 3 Third Quarter (July - September) 2010 Honolulu, Hawaii October 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 US Profile Rises, China Image Falls, North Korea Changes? by Ralph A. Cossa and Brad Glosserman, Pacific Forum CSIS The US profile in Asia appears to be on the rise following Secretary of State Clinton‟s highly publicized presentation at the ASEAN Regional Forum (ARF) ministerial in July and President Obama‟s meeting with ASEAN leaders at quarter‟s end. Meanwhile Beijing‟s image took a few hits as it tried to bully Japan (successfully), the US and ROK (unsuccessfully), and ASEAN (TBD) on maritime-related issues, while essentially serving as North Korea‟s defense attorney during UN Security Council deliberations on the Cheonan attack. Prospects for a resumption of Six-Party Talks remained low. New faces appeared in the North‟s general officer ranks but prospects for Korean Peninsula denuclearization remained unchanged. Meanwhile, democracy marches on, one step forward in Japan and two backward in Burma/Myanmar, while Washington seeks greater economic integration in Asia. The US profile is expected to grow further next quarter with Obama and Clinton both scheduled for high-profile visits to the region. We‟ll see what Beijing does to improve its image; we expect little progress when it comes to Pyongyang. US-Japan Relations:…..………………………………………………………………………..15 Hitting the Reset Button by Michael J. Green, CSIS/Georgetown University, and Nicholas Szechenyi, CSIS The ruling Democratic Party of Japan (DPJ) suffered an embarrassing defeat in the July Upper House election less than a year after assuming power. Prime Minister Kan Naoto subsequently took a beating in the polls but managed to withstand a challenge from former DPJ Secretary General Ozawa Ichiro in a party presidential election marked by heated debate over economic policy. Political turmoil did not preclude active diplomacy on the part of Kan‟s government, nor coordination between Washington and Tokyo on a range of bilateral, regional, and global issues including the relocation of Marine Corps Air Station (MCAS) Futenma on Okinawa; a collision between a Chinese fishing boat and Japanese Coast Guard vessels near the Senkaku Islands; and sanctions on Iran to condemn its nuclear activities. The quarter came to a close with President Obama and Prime Minister Kan taking stock of a rapidly developing bilateral agenda during a brief yet productive meeting on the margins of the United Nations General Assembly (UNGA) in New York, setting the stage for the president‟s trip to Japan in November. iii US-China Relations:……..……………………………………………………………………..25 Tensions Rise and Fall, Once Again by Bonnie Glaser, CSIS/Pacific Forum and Brittany Billingsley, CSIS Diplomatic confrontations over the Yellow Sea and the South China Sea were the source of new bilateral tensions this quarter. Beijing vigorously objected to the dispatch of the aircraft carrier USS George Washington to waters near where the South Korean corvette Cheonan sunk after being attacked in March, even before Washington had made a decision to deploy it. Worried about Chinese diplomatic posturing and destabilizing activities in the South China Sea, Secretary of State Clinton delivered a clear statement of US interests at the ASEAN Regional Forum meeting in Hanoi that irritated Beijing. With the US mid-term elections approaching, US frustration mounted over China‟s unwillingness to allow its currency to appreciate against the dollar at a faster pace. The House of Representatives passed legislation that would allow the US to impose import duties on countries that have undervalued currencies. After more than five months of delay, the Pentagon submitted to Congress its annual report assessing Chinese military capabilities. Finally, two US presidential envoys traveled to Beijing to smooth over relations and President Obama met Premier Wen Jiabao on the margins on the UN General Assembly. US-Korea Relations:...………………………………………………………………………….41 Smooth Sailing in the Wake of Cheonan by Victor Cha, CSIS/Georgetown University and Ellen Kim, CSIS The sinking of the Cheonan remained the predominant issue in the US-ROK relationship as both countries spent the quarter coordinating and undertaking punitive measures against North Korea for its alleged attack on the ship. The UN Security Council adopted a Presidential Statement condemning the attack but did not directly blame North Korea. The US and the ROK held their first “Two-plus-Two” meeting in Seoul. While countries reopened their dialogue channels in the hope of resuming the Six-Party Talks, there remain many challenges and uncertainties that make the future direction of the Talks unclear. Several issues remain to be resolved on the KORUS FTA as negotiators are expected to hold a ministerial meeting soon to strike a deal. The Chicago Council on Global Affairs released a report on US attitudes toward South Korea that highlighted public support for trade agreements, including the KORUS FTA, is lukewarm. Among those who viewed fair trade as critical for US interests, support for KORUS was much stronger. US-Southeast Asia Relations:…..……………………………………………………...............49