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The joint statement issued in Washington Monday by Prime Minister Yoshiro Mori and U.S. President George W. Bush is the first political declaration issued by Japan and a Republican administration in the United States in eight years. It marked a starting point for redefining terms of the Japan-U.S. security alliance that will be valid at least for the next four years.

The Washington summit was clouded by the following problems:

* The unpopular Mori is likely to be forced to resign in the near future. The lame-duck prime minister lacks leadership and the implementation of any agreements reached in the summit will be delayed until after his replacement takes over.

* Simultaneous plunges in stock prices in Japan and the U.S. have dampened stock markets in other countries. Summit discussions focused on Japanese problems, including ways of expediting writeoffs of bad loans held by Japanese banks

* The sinking of the Japanese fisheries training ship Ehime Maru by a U.S. nuclear submarine has stirred strong public distrust of U.S. forces and given rise to doubts over the Japan-U.S. security alliance, especially the U.S. military presence in Okinawa.

Unless these problems are solved, Japan and the U.S. will be unable to open a new chapter in their security alliance.

According to White House spokesman Ari Fleischer, “economics was a central part” of the Washington summit. Bush was quoted as telling Mori, “As a friend, we want to convey our concern” regarding the writeoffs of bad loans held by Japanese banks. Bush was not giving Mori lessons in economics but was giving him a friendly advice, true to his political style.

Mori reiterated his determination “to promote vigorously structural and regulatory reform to revitalize the Japanese economy and strengthen the financial system,” especially by addressing the issue of corporate debt and nonperforming loans, the joint statement said.

At the same time, Mori reportedly expressed his belief that the U.S. economic slowdown was adversely affecting Japan and other Asian economies and causing free falls in stock prices in Asia.

Prior to the summit, the ruling coalition announced a package of measures to bolster the flagging economy, including government guarantees of a stock-purchasing organization. If the scheme was a ploy to help the Mori administration stay in power, the market could crash.

Mori and Bush also agreed on the importance of promoting deregulation, restructuring and foreign direct investment, according to the joint statement.

However, these are the very issues over which Tokyo and Washington have fought for years. U.S. automakers have escalated criticism of their Japanese rivals, which they say are pushing exports to the U.S. by taking advantage of the sharp fall in the yen’s foreign-exchange value. Unless Japan implements the summit agreements swiftly, the Bush administration will face mounting pressure from the industry to take stronger action against Japan.

The outgoing Mori administration effectively has no power to implement deregulation and market-opening measures. With an Upper House election coming up in July, there will be pressure on the government to go slow in implementing reforms. The leaders concurred that solid Japan-U.S. ties enable the two countries to deal with problems, but a host of problems remain that could cause serious friction between the two countries.

It was highly significant that Mori and Bush agreed on the importance of a strategic dialogue between the two countries on diplomacy and security policies. The world, including the Asia-Pacific region, has yet to establish a new order after the end of the Cold War.

China has expanded defense spending by 17 percent in its 2001 budget to boost its influence in Asia. The U.S. and China are engaged in diplomatic maneuverings over U.S. arms sales to Taiwan.

In July, Chinese President Jiang Zemin will visit Russia to sign a bilateral treaty of good neighborly relations and friendship in a move to join forces against the U.S.

The Bush administration, meanwhile, is reviewing U.S. policies toward North Korea. Bush and South President Kim Dae Jung agreed in their talks March 7 that Seoul should maintain its “Sunshine Policy” toward the North, but Washington remains suspicious of Pyongyang’s intentions. North Korea is also escalating its war of words against the U.S.

The Bush administration is reviewing its strategies, but it is uncertain how Washington will change its policies toward Asia. In that sense, Japan should start strategic talks in the early days of the Bush administration.

Kurt Campbell, senior vice president and director of the International Security Program at the Center for Strategic and International Studies, in Washington, says that the most important step that the two countries can take to strengthen their alliance will be to “engage in deep, sustained strategic dialogue.”

For Japan, the central theme of the dialogue will be policies toward China, especially in connection with the Taiwan issue, and those toward the Korean Peninsula.

While Japan and the U.S. are pushing joint technical research on theater missile defense, China is alarmed over U.S. ballistic missile defense. The Bush administration has expressed determination to defend Taiwan in case of a conflict. Since changes in U.S.-China relations will affect the Asian situation as a whole, Japan should develop firm policies toward China.

Tension could develop on the Korean Peninsula in connection with the Bush administration’s policy changes. As friction continues between Washington and Seoul, the three-way cooperation system among Japan, the U.S. and South Korea should be strengthened.

Meanwhile, protests are mounting against the U.S. military presence in Okinawa, especially against crimes committed by servicemen against Japanese civilians and noise created by U.S. military aircraft. Japan should make bold proposals for removing some U.S. military installations in Okinawa to Guam and reducing the overall U.S. military presence in Japan. These proposals will become focal issues in the strategic dialogue.

If the government takes the Japan-U.S. security system for granted, the bilateral alliance will lose the support of the Japanese public.

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