National / Politics

What Trump's tough talk might hold for negotiations on U.S.-Japan cost-sharing deal

by Jesse Johnson

Staff Writer

It’s no secret that U.S. President Donald Trump views alliances with a skeptical eye. Trump, who fancies himself a dealmaker, has repeatedly called for allies around the world to shoulder more of the costs of their partnerships with the United States.

Japan — despite Trump’s golf-buddy relationship with Prime Minister Shinzo Abe — is no exception.

For Tokyo, Washington’s ongoing cost-sharing talks with Seoul, and their ultimate result, are likely to have a significant impact on Japan’s own potentially contentious negotiations with the White House on a bilateral Special Measures Agreement for hosting American troops. That SMA is due to expire in 2021.

Here’s a look at what to expect in those negotiations, which are set to begin in earnest sometime next year.

No definition

One of the toughest parts of negotiating a new deal is the lack of an authoritative and bilaterally agreed-upon measure for the amount Japan contributes toward U.S. “stationing costs.”

This has led to widely varying estimates of how much both sides spend.

The Japanese government’s position is that it plans to spend roughly ¥58.2 billion ($524.3 million) on U.S. forces in fiscal 2019 between the SMA, construction of facilities in Guam, and “burden reduction” measures, among other things, according to the Defense Ministry’s fiscal 2019 budget.

As for the U.S., the closest thing it has to an authoritative figure is a fiscal-year stationing cost report that goes to Congress. It lists those costs as $5.7 billion (¥632.7 billion) for fiscal 2020, but that includes salaries, operations and maintenance budgets, and other “sunk” costs that have already been spent, while excluding several other line items that could be considered.

Asked during an April 2018 Senate confirmation hearing if Japan was shouldering its fair share of the costs under the current SMA, Adm. Phil Davidson, who would later become head of the U.S. military’s Indo-Pacific Command, was unequivocal.

“Yes, Japan is carrying a fair share of the burden associated with the U.S. presence in Japan,” he said.

Still, in the absence of any agreed-upon standard, both sides are expected to bring their own assessments to the negotiating table.

What Japan pays

Japan’s host-nation support is basically composed of two funding sources: SMAs and the Facilities Improvement Program.

First negotiated between the two countries in 1987, the SMA generally covers five years and obligates Japan to pay a certain amount for the utility and labor costs of U.S. bases and for relocating training exercises away from populated areas.

Under the current SMA, covering 2016 to 2021, the U.S. and Japan agreed to keep Tokyo’s host-nation support at roughly the same funding level as in the past. Japan is contributing ¥189 billion ($1.72 billion) per year under the SMA and at least ¥20.6 billion ($187 million) per year for the FIP, according to a June report by the U.S. Congressional Research Service. In addition to host-nation support, Japan also spends about ¥182 billion ($1.65 billion) annually on measures to subsidize or compensate base-hosting communities, the report said.

Based on its obligations defined in the U.S.-Japan Mutual Security Treaty, Japan also pays the cost of relocating U.S. bases within Japan and renting land on which U.S. military facilities are located in the country, it showed.

This covers the majority of the costs associated with three of the largest international military base projects since World War II: the relocation plan for U.S. Marine Corps Air Station Futenma in Okinawa (Japan provides $12.1 billion), U.S. Marine Corps Air Station Iwakuni (Japan pays 94 percent of $4.8 billion), and new facilities in Guam for the future transfer of 4,800 marines from Okinawa (Japan pays $3.1 billion, or about a third).

What Trump wants

As a presidential candidate in 2016, Trump made a string of complaints saying Japan did not pay enough for hosting U.S. bases. In June, at the Group of 20 summit in Osaka, he renewed calls to alter the alliance, which he described as “unfair.”

Media reports the following month said Trump had dispatched his national security adviser at the time, John Bolton, to convey to Tokyo that the U.S. was seeking a fivefold annual increase in what Japan pays to support American forces here.

The approach resembles its dealings with South Korea, which agreed in a one-year, stopgap SMA inked earlier this year to boost spending by 8.2 percent. Seoul is currently in tough negotiations over a new deal with the U.S.

And while the fivefold increase is likely an opening gambit by the Trump administration, it hints that other alliance factors — the sealing of a bilateral trade deal, Trump’s affinity for Abe and Japan’s purchases of U.S. military gear — may not influence the SMA negotiations.

What the future holds

Given the seemingly exorbitant cost-sharing demands, the Trump administration could increase friction between the United States and Japan, undermining Tokyo’s confidence in America’s commitment to the alliance and the region while weakening Japanese domestic support for American forces in Japan, some observers have said.

But considering Trump’s reputation as a disrupter, there is little evidence this will factor into these demands. Ultimately, the decision to take a harder line on cost-sharing will rest with him, and with his 2020 re-election bid heating up, he will almost assuredly be hungry for a “win” he can tout to voters.

And if his early remarks on the campaign trail are any indication, this appears to be the path he has already embarked on.

At a rally Friday, Trump spoke of the alliances with disdain, reiterating his dissatisfaction with what he views as their low share of defense costs, specifically citing Japan.

The president said wealthy nations must pay more for the protection provided by the U.S. military, claiming “we were the sucker country for years and years, but we are not the sucker country anymore and they all know it.”

Referring to past talks with Abe about cost-sharing, he said: “I have great respect for the prime minister of Japan. I said to (the) prime minister, I said, ‘How did you get away with it for so long?'”

Abe did not look at him, Trump added, and no clear answer came from the prime minister.

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