Might the next batch of “make alliance even greater” hats Tokyo orders bear the name Chinese President Xi Jinping instead of his U.S. counterpart Donald Trump?
Events in Vietnam over the weekend make you wonder. There were two dominant headlines from the Asia-Pacific Economic Cooperation forum in Danang. One, President Trump’s pivot away not just from Asia, but the post-World War II global trade system. Two, Prime Minister Shinzo Abe basking in a huge Trans-Pacific Partnership win at stark odds with Trump’s “always put America first” crouch.
Yet a third narrative that got less attention may be equally impactful: Abe and Xi getting together. At a Nov. 11 meeting, Xi said he craves “positive developments” in relations; Abe said he’ll “strongly promote” deeper cooperation.
This isn’t what the punditariat envisioned last month when both men consolidated power at home. Abe’s Oct. 22 win was seen as his ticket to single-mindedly revising the war-renouncing Constitution, damn Beijing’s feelings. As Xi “thought” was enshrined into Chinese Communist Party doctrine, many assumed the next five years would see Beijing marginalizing Japan’s Asian role.
Granted, these hunches could still prove correct. And, it’s worth noting, we’ve seen this movie before — Abe and Xi making nice, only to return to base nationalist comfort zones. What’s changed, though, is an America turning inward at the same moment Asia’s two most powerful leaders feel confident enough at home to make a deal.
Let’s add in another positive wrinkle: Xi’s 40-minute summit with South Korea’s Moon Jae-in in Danang. The last 16 months have seen Beijing-Seoul relations fall off a cliff. Seoul’s decision to host Washington’s Terminal High Altitude Area Defense (THAAD), anti-missile system enraged Xi’s government. Mainland tour groups were canceled, K-pop stars suddenly faced visa troubles, Lotte department stories were shuttered and Hyundai’s sales plummeted, causing severe economic fallout. Now, Xi and Moon are planning a Beijing summit.
A North Asian thaw is still very much a work in progress. Moon’s team threw some shade Abe’s way by inviting a wartime “comfort woman” to the Trump state dinner and serving Trump prawns caught in disputed waters between Japan and South Korea. Still, Trump’s unpredictability may be bringing three economic “frenemies” together.
While all three remain circumspect, none can be happy to read his “short and fat” barb at North Korean leader Kim Jong Un. Trump’s bizarre comments in defense of Russian President Vladimir Putin were wildly off-subject at a moment when Asia isn’t sure this White House will work with it or against it. As Trump heads back to Washington, it seems clear that “America first” is amounting to “Asia first” in the global economic packing order.
As the TPP 11 celebrate a deal to preserve a pact Trump pulled out of in January, Washington is trying to renegotiate a five-year-old South Korea-U.S. trade deal. Then Trump flew off to Manila for no other reason, it seems, than to fist-bump his favorite Southeast Asian authoritarian — Philippine President Rodrigo Duterte. Trump has no economic message for Asia at the same moment Abe is picking up the free trade baton and flirting with Xi’s China.
Abe suggested as much in comments about his sixth Xi meeting since both took power in 2012. He opined that the strengthened standing each enjoys could set the stage for more flexible and forward-looking relations. Why not add Moon into the mix to confront North Asia’s biggest challenges?
Odds are, all three leaders will be in power after Trump returns to the private sector. Abe and Moon also share a prickly task in common: avoiding bilateral trade deals with the Trump White House. Quite a challenge for Abe, who’s staked out a position as Trump’s closest ally. Moon, meanwhile, is struggling to preserve a vital deal Trump doesn’t like. For both men, more success might be had running out the clock and betting Trump’s successor will embrace the globalization forces he fears.
As Abe cozies up to Xi and Xi cozies up to Moon, the endgame should be on a three-way detente. Abe’s TTP win notwithstanding, China, Japan and South Korea should work trilaterally to lower trade barriers, link bond and stock markets and mull a collective use for more than $4.6 trillion of currency reserves.
Beijing has spent the last few years creating stock-connect schemes between Shanghai, Shenzhen and Hong Kong. Xi might consider extending the program to Tokyo and Seoul, even if on a limited, daily-quota basis. More ambitious currency-swap programs between Beijing, Tokyo and Seoul would better position Asia for the next global financial crisis.
Just like that last one in 2008, it could emanate from America if Wall Street’s bull run reverses itself, budget-busting tax cuts that lead to a panic in government-debt circles or the president seeking to wag the dog, attacking Pyongyang to draw attention from scandals and investigations.
With a little luck and political will, Abe will be ordering up some new “alliance” caps, and soon.
Based in Tokyo, American journalist William Pesek is the author of “Japanization: What the World Can Learn from Japan’s Lost Decades.”
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