Three days of intensive trade talks between the United States and China last week did not solve the hard-core issues. Although Secretary of Treasury Steven Mnuchin said, “We’re putting the trade war on hold,” quite a few Chinese economists or businesspersons are reportedly intrigued by the “Japan of the 1980s” in their efforts to visualize the future of U.S.-China relations.
The 1980s in Japan were both the best and worst for us. I started my career in 1978, when the Japanese economy looked like it was the best in the world. From textiles, steel and color TVs in the 1970s, Japan-U.S. trade frictions continued throughout the 1980s over Japan’s rice, beef, oranges, cars, supercomputers and financial services.
The worst came right after the ’80s, when the bubble boom collapsed in 1991-1993. The Plaza Accord of 1985, a potential turning point in Japan-U.S. trade relations, might have contributed to Japan’s asset price bubble of the late ’80s, which was then followed by a protracted period of deflation and low growth in Japan known as the “Lost Decade.”
No wonder many Chinese are curious about the Japan of the 1980s. Even a former Japanese prime minister and a top economist compared the ongoing U.S.-China trade war with the frictions between the U.S. and Japan in the 1980s. They told the Chinese that they “should learn lessons from Japan,” especially over the Plaza Accord.
Is it really the case? I doubt it. Even if you learn lessons from the decades of Japan-U.S. trade frictions, you cannot predict the outcome of the U.S.-China trade war. The reason why is clear: The former was just tactical frictions between allies, while the latter is part of the strategic rivalry between two potential adversaries.
When I became deputy director for the Japan-U.S. SOFA (Status of Forces Agreement) in the North American Bureau of the Foreign Ministry, our main mission was to minimize the negative impact of the ongoing bilateral trade frictions on Japan-U.S. security arrangements. My U.S. counterparts shared this perspective.
The U.S.-China relationship is different. Trade issues are part of the rivalry between the two mutually dependent but potential competitors in the Western Pacific. Although their trade policy counterparts agree to try to avoid a spillover that could turn into a political or military showdown, the U.S. and China will not back off on major strategic issues.
If it is inappropriate to compare the U.S.-China competitions in the 2010s with the Japan-U.S. trade frictions in the 1980s, how can we predict the future? Since the U.S.-China bilateral relationship is a combination of economic, political and especially military elements, I would rather revisit Japan-U.S. relations in the 1930s.
It started with the Great Depression in 1929. The price of silk collapsed in the U.S. and Japan’s silk exports to the U.S. virtually ground to a halt. In 1936, Japan withdrew from the Treaty for the Limitation and Reduction of Naval Armament (the London Naval Treaty) and the Washington Naval Treaty expired in December of the same year.
In the following year, a war broke out between Japan and China. In 1938 Japan abrogated the Commerce and Navigation Treaty with the U.S. In 1941, Japan made public a plan to advance its troops to the South China Sea area including French Indochina and the Dutch East India, which infuriated the U.S. In response, Washington froze Japanese assets in the United States in July and imposed a full-scale oil embargo on Japan in August 1941. Does it ring a bell? Yes, Japan-U.S. relations in the 1930s were impacted by the strategic rivalry between the two major adversarial powers in East Asia and the Western Pacific.
That was a historical lesson for us. A major rising power of East Asia, considering the status quo as something unjust and believing that it can and should change the status quo, if necessary by force, challenges the international community and the hegemony of the U.S. Navy in the Western Pacific.
For me, the best recent example was the so-called South China Sea Arbitration, a case brought by the Philippines against China in 2013 under the United Nations Convention on the Law of the Sea (UNCLOS). Although China immediately declared it would not participate, the tribunal finally ruled in favor of the Philippines in 2016.
While the tribunal clarified that it would not “… rule on any question of sovereignty over land territory and would not delimit any maritime boundary between the Parties,” it also ruled that China has “no historical rights” based on the “nine-dash line” map. China rejected the ruling, which reminded me of another historical document, the Lytton Report.
The Lytton Report was the findings of the Lytton Commission, entrusted in 1931 by the League of Nations to evaluate the Mukden (now Shenyang) Incident, which eventually led to Japan’s seizure of Manchuria. Expressing its strong opposition, the Japanese delegation walked out of the League of Nations Assembly in February 1933. Japan then withdrew from the body and isolated itself.
Pundits in China disagree. China now is not like Japan in the 1930s. They claim China is not naive and ignorant, either. Japan-U.S. relations in the 1980s were unique. Japan was very dependent and didn’t have the kind of autonomy China enjoys now. Beijing has been and will be ready to deal with the U.S. in any trade negotiations.
They also claim that China can do what Japan could not in the 1980s, will not repeat the same mistakes as Japan made and it is China and the United States that can establish together a new global international order. Sounds familiar? Yes, it does. This kind of self-righteous argument is similar to Japan’s position in the 1930s.
A great American thinker once said, “History doesn’t repeat itself, but it often rhymes.” If he is right, the ongoing U.S.-China trade war may be rhyming with the past in East Asia and the Western Pacific. Whether it rhymes with the 1980s or the 1930s will be a critical question. I am not optimistic, at least now, but I hope I am wrong.
Kuni Miyake is president of the Foreign Policy Institute and research director at Canon Institute for Global Studies.