Commentary / Japan

A chance to showcase Japan's leadership

by Stephen R. Nagy

The upcoming Group of 20 summit in Osaka will be an opportunity for Japan to demonstrate its leadership and commitment to multilateralism and a rules-based order in an era of populism, growing socio-economic inequality and great power competition.

As Ian Bremmer wrote in his recent book “Us vs. Them: The Failure of Globalism,” Japan has largely escaped the global trend of populism. Japan enjoyed the benefits of globalization without globalizing its society. By remaining relatively closed to immigration and protecting its economy and workers from the extremes of globalization, Japan has been able to consistently remain at the top of global and regional quality of life rankings, socio-economic inequality is comparatively low compared with other developed economies and the plague of populism remains distant.

This approach to globalization has also been problematic. By remaining closed to immigration, Japan in 2050 will be inescapably much smaller and less influential at a regional and global level. When we consider global competitiveness, its companies have become less competitive globally and its youth more inward-looking, eschewing studying abroad, foreign languages and precious internships abroad to internationalize and hone invaluable cultural and language skills.

Political apathy has also grown more widespread among citizens as Japan’s approach to globalization resulted in nearly 25 years of stagnation in which many people lost confidence in the political establishment’s ability to recreate a Japan in the post-bubble era.

The G20 will be an opportunity for Japan to share the lessons it has learned from its approach to globalization. In particular, the importance of ensuring that benefits of trade do not come at the expense of the marginalization of its workers as we have seen in the United States and other Western countries. At the same time, Japan should also stress that its approach has been imperfect, and that many of the social and economic challenges Japan is facing today are rooted in its imperfect approach to globalization.

In the arena of the re-emergence of great power competition, as a global senior statesman Prime Minister Shinzo Abe has managed to balance relations with strongmen and democratically elected leaders alike. The G20 may provide him the opportunity to leverage his experience to act as a middleman between the U.S. and China.

In terms of U.S.-China relations, the escalating trade war between the two great powers places Japan in the difficult position of balancing its biggest trading partner and its long-standing, comprehensive alliance partner. The triangular relationship is further complicated by the numerous security challenges that exist within the Sino-Japanese bilateral relationship and how China’s “Made in China 2025” national development strategy, which includes the closed ChinaNet internet system, will negatively impact Japanese businesses.

Abe needs to convey to both Trump and Xi that their trade war and their tech rivalry has the potential to dramatically and negatively affect global supply chains, increase the cost of consumer goods, and decrease the benefits that their countries and the world has accrued in the postwar period because of globalization.

The growing tech component of the U.S.-China trade war is even more complex for Japan to navigate. As ChinaNet will require Japanese firms to duplicate much of their business platforms so that they can operate within the closed Chinese context. It also makes them subject to China’s cybersecurity law that took effect in 2018, which requires critical information infrastructure operators to store personal information and important data collected and generated within China. The Chinese government also has the legal power to demand of any internet service provider a copy of any information deemed related to cybersecurity.

These are concerning attributes of the realities of the ChinaNet system as there is no fine delineation between political decisions and legal decisions within China, as we saw with the December 2018 arrests of Canadians Michael Kovrig and Michael Spavor. The lack of privacy protection and the legion of cyber operators that man the Great Fire Wall put Japanese at risk in China.

With Japanese business having such a heavy footprint in China, however difficult, Abe should use the G20 platform to advocate for a dialogue related to internet regulation, including privacy-related issues between the U.S., China, Japan and other states. The risk of not doing so pushes Japan toward choosing between its most important, comprehensive relationship and the Chinese market, which is central to maintaining its prosperity well into the future.

With the recent release of the U.S. Department of Defense’s Indo-Pacific Strategy Report on June 1, Abe should also use the G20 as an opportunity to stress the importance of a rules-based order in the Indo-Pacific. Here Abe needs to clearly articulate the security challenges that are emerging in the Indo-Pacific, but also he needs to stress that any Indo-Pacific vision or strategy must be inclusive.

The triangular relationships that exists between Japan, the U.S. and China should inform Abe’s efforts to forge a consensus on the Indo-Pacific. Abe should actively lobby others states within the G20 that face a similar tightrope walk between the U.S. and China.

By working with Australia, Canada, France, Germany, India, Indonesia, South Korea, the United Kingdom, the United States and the European Union, Abe should use the G20 as a platform to discuss the importance of the region’s peaceful development based on rules-based behavior.

He could also advocate for a shared approach to development of the region through cooperation in connectivity projects. Collectively and through the internationalization of infrastructure projects through the Indo-Pacific, Japan has the opportunity to provide a real alternative to China’s “Belt and Road” initiative that is international, rules-based and transparent. The pooled resources and comparative advantages of the states listed above would have a higher chance of significantly contributing to the Indo-Pacific’s development and future prosperity than working bilaterally or trilaterally, as seen with the Asia Africa Growth Corridor or the trilateral partnership between Japan, Australia and the U.S. to invest in infrastructure projects in the Indo-Pacific region.

Japan should leverage the G20 summit in Osaka to highlight its leadership, political stability and commitment to multilateralism and a rules-based order in an era of populism, growing socio-economic inequality and great power competition. Abe is well placed to achieve these goals through working collaboratively and in an inclusive manner with all G20 members.

Stephen R. Nagy (@nagystephen1) is a senior associate professor at the International Christian University and a visiting fellow with the Japan Institute for International Affairs (JIIA)

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