Washington Insights(Vol. 4, No. 6)

Editorial Staff

The autumn of 2016 has been tumultuous in Washington, DC. Whereas in October the old agenda was still under discussion, after Donald Trump won the presidential election the struggle began to decipher the new agenda. This overview of meetings before and after the elections reflects the two-sided nature of a transitional period.

Korea

The agenda did not shift much on Korea given the continued challenge from North Korea with a new Security Council resolution delayed, the chaos of South Korean domestic politics with Park Geun-hye’s remaining time in office under a cloud, and the lack of priority by Trump for the Korean Peninsula except for support payments for US troops and criticism of trade agreements. Yet, Korean themes are enduring in their presence in DC think tanks, and uncertainty fostered searching discussions. In refutation of Trump, there was stress that the United States is in Korea for its own interests, not just for the benefit of South Korea. Concern about danger from Park’s troubled situation also led to reassertion of the foundations of this relationship.

One pre-election subject was the fate of Seoul’s Northeast Asia Peace and Cooperation Initiative (NAPCI). Support for it came with praise that this is consistent with Obama’s vision for Asia and that it is not just Seoul’s initiative, but Washington is also leading the effort. Whereas earlier seminars on NAPCI pointed toward diplomacy as a way to draw Pyongyang into multilateral dialogue, this discussion started with emphasis on keeping up comprehensive pressure on it, along with still striving for soft security cooperation with multiple states while keeping the door open for Pyongyang. As the question of whether NAPCI is in trouble was aired, it was acknowledged that not only is the North’s threat growing, the environment for regional cooperation is now more unfavorable. It was suggested that NAPCI is gradual, has been making modest progress, and is process oriented with a long-term outlook. Hope rests on inclusive identities, limiting exclusive nationalism and the agony of now rekindled collective memories, listeners were told. Also, development of think tank networks was seen as critical for NAPCI. Mention was made too of the merit of South Korea’s middle power role at the center of major powers in Northeast Asia. Yet, doubts were raised about institutional fatigue and growing skepticism about multilateralism as opposed to bilateral and trilateral ties and about soft power losing out to hard power of late. Indeed, in post-election discussions there was more assurance of military support for US regional objectives, putting hard power even more at the center of relations.

Doubts about NAPCI arose from different sources. A Japanese viewpoint is that NAPCI is not feasible and Seoul should do more to boost Japan-ROK relations. More concern was raised about China’s relationship with North Korea, casting doubt on its support for NAPCI, given the clashing goals of the North and NAPCI. An opinion on Russia suggested that it is pro-NAPCI, but it is opposed to isolation of the North and regards Seoul’s tougher policy in 2016 as a blow to NAPCI. Mention of Putin’s agenda at the Eastern Economic Forum in September showcased a different view of multilateralism, which is not easy to reconcile with NAPCI, as it is now discussed.  Russia’s energy super-grid proposal is not perceived by others as a mechanism for building trust and reducing threat nor as the way to make NAPCI credible. From a Mongolian standpoint, the Ulaanbataar dialogue inclusive of North Korea stands as an alternative to NAPCI since Mongolia has good ties with all countries involved. As skepticism appeared from many sides about NAPCI, there was concern that it would not last beyond the Park presidency, that it did not link bilateral and regional ties in a manner satisfactory to all parties, that the desired sequence of soft to hard power is unrealistic, and that Sino-US relations are too bilateral for this format to work. In response, NAPCI was narrowed to a functional cooperation boosting expertise.

After the US elections a seminar on South Korea offered a complementary look at the bridging role it can play, highlighting the boost it received as the host of the G20 in 2010. The focus was more on its global heft as a middle power than its regional role. The role of Seoul in transforming the G20 was debated with some finding the G20 on a downward slope from then, but Seoul won recognition that was solidified in other hosting roles. Economically, it is well positioned between the G7 rich countries and the majority of the G20 still developing nations. It could claim to be a bridge also for its political stability, democratic transition, and shift from aid recipient to donor. Yet, doubts were raised about its regional security avoidance due to concern about alienating China over the priority sub-regional issue of North Korea. Its standing has weakened in Northeast Asia as Japan fostered “hate Korea,” as China has lately stressed “blame Korea,” and as Russia has leaned toward the North to “pressure Korea.” Talk of middle power clout raises expectations excessively, leading to overreach and even an identity crisis. Overreaching for NAPCI was cited as one example of this. Another viewpoint is that Korea’s success in 2010-2015 in showcasing its global role was tied to the US global agenda, which is now in question. If China takes the lead in urging multilateralism, what place will there be for South Korea? Indeed, at the 2010 G20 the Sino-US divide limited what Seoul could accomplish, and, of late, China’s pursuit of internet controls and other narrow causes leads it away from Seoul. Also, the high level of Korean corruption damages credibility. Thus, a bridging role appears less promising. The shadow of North Korea now has spoiled the atmosphere. Given the uncertainty over the US stance ahead, one suggestion is to work more closely with Japan and, perhaps, even Germany to keep alive liberalization and globalization. In light of the scandal swirling around Park Geun-hye, however, stability comes first.

Concern about North Korea’s deepening threat did draw some discussion. Changes in relations among the great powers keep adding to the challenges in managing the threat. Calls for continuity in US leadership were stressed in the face of the Trump transition. One viewpoint is to highlight human rights violations: increasing global awareness, putting pressure on the North, and warning that its leaders would be held accountable. Doubling down on this, some called for stronger, urgent steps: covert moves to spread information against the regime, more UN General Assembly efforts to intensify world-wide sanctions, and pressing harder against the powers in the path of such steps. Yet, the response stressed Chinese and Russian intransigence against such moves. Success of policy to enhance rights awareness was recognized, but optimism that China and Russia would change their minds was unpersuasive. The idea that information programs would change the regime was widely rejected.

A second discussion credited the “pivot” with making Asia the top US priority, which reflected the rise of China as the driving force of global change. Given Trump’s view, the possibility of US prioritizing Russia as a challenge has apparently disappeared.

North Korea poses the biggest challenge, and China is the focus in dealing with it. One argument is that Washington should avoid becoming the target in the Korean elections of 2017, given the attitudes of many on the left in Seoul. The most serious concern now is the questioning among South Korean leaders that they can count on the US nuclear guarantee. More ways to visibly demonstrate this guarantee are now being sought, and the US side has yet to do what would be reassuring. The danger is that visible US actions would arouse the left, and make it the issue in the election. A tangible demonstration of the US nuclear guarantee might satisfy some, but it would arouse others. More advocates of engagement are found in Seoul than Washington, but US dialogue in 2017 may pose no problem if expectations are kept low. There is little prospect of limiting the nuclear and missile programs or reducing the threat.

Advocates of dialogue are aware that North Korea violates every agreement it has made. Even if some find others at fault, it was always the North that violated the deal. Moreover, the North’s only interest in dialogue is viewed as recognition as a nuclear state. It wanted to bypass the Six-Party Talks to get such US recognition. If there were a freeze in exchange for sanctions release—a temporary agreement giving legitimacy to the North—the North would press for more soon. It would welcome a peace treaty to legitimize its nuclear weapons program, but this is not a US desire. Any such deal would be against terms acceptable to the US side and also not one the North would keep. Yet, talks could communicate directly rather than go through China, which may spin the signals to up the chances for bilateral meetings.

Another discussion pointed to increased vulnerability for North Korea if it improves its nuclear strike capacity. The prospect of a preemptive strike would rise if war seemed imminent, and an illusion of having a deterrent force would make missteps more likely. The US deterrent would hold, listeners were told. Kim Jong-un, might not understand the limits of his power. The Iranian model is to start with toughness and more sanctions before proceeding to talks. No freeze without agreement on the process of denuclearization is desirable, meaning talks without nuclear weapons on the table are counterproductive. The prospect is that the North will assume that with a nuclear capability it can resume provocations in South Korea, as in the 1970s. In preparation, a posture of readiness to make Pyongyang pay a higher price is seen as helpful. If engagement fails, containment needs to be upgraded, many insisted. In response, a South Korean asserted that North Korea does not believe it can unify the peninsula by force or threat, and that it regards nuclear weapons as essential for its security. This leads to different conclusions about how the next president should proceed. Many in Seoul appear concerned by a hardline US stance and the inability to overcome China’s resistance. The Chinese are not so displeased with Pyongyang that they reject sanctions to damage the regime heavily. This has been their stance since the early 1990s. This huge international security issue should not be deferred to the Chinese. If they will help, fine, but no subcontracting is desirable. The Chinese provide the means by which the sanctions do not work; as seen in improved living conditions in Pyongyang. One doubter argued that preemption before an imminent threat (different from a preventive war before the other side gain’s greater danger) would be too late since the North would have the means to hit the United States and all-out war would follow. To toughen sanctions to cause North Korea to begin to bend, one option is to sanction Chinese banks, and another option would be a push for a Security Council resolution to pressure China to cut off all oil exports to the North. The discussion then focused on how to pressure China in regard to sanctions. If Washington asks for cooperation on North Korea, Beijing may seek linkage with Taiwan and even the South China Sea. This is not likely to be acceptable to the US side. Engagement with North Korea is unlikely in 2017 since a new government in Seoul is essential for the coordination necessary (as well as with Japan) prior to this.

Japan

Two themes that drew attention in this timeframe were Japan-Southeast Asia and revision of the Constitution. Amending the Constitution is difficult, since those who favor it are split on the changes they desire. Such a change along with abdication of the emperor, should it be granted as Akihito wishes, would spell an end to the postwar era. So far, Japanese who cling to the Constitution as is and those who are impatient to change it both seem to see that era as continuing. For the far right, amending the Constitution poses an opportunity to reconstitute the emperor-Shinto-Yasukuni linkage regarded as the strong and proud state (national identity) legacy broken after the war. While the Emperor had hoped to visit South Korea and boost bilateral relations, acknowledging a blood tie for the imperial line, Lee Myung-bak’s visit to Dokdo (Takeshima) in 2012 and statement about an imperial visit played into the hands of the right wing. Some commentators see South Korea as well as China as too intent on keeping the “history card” while Japanese are too persuaded of “apology fatigue” to find common ground. Others, especially after the Trump victory, see realist overlap as building momentum for reconciliation. Yet, Abe’s drive for constitutional revision plants a time bomb in the path of closer ties.

As Philippine president Duterte visited Japan after damaging ties to the United States and warming ties with China, discussion of Japan’s relations with Southeast Asia interested DC listeners. It was recognized that Japan is pursuing a balance of power strategy versus China’s rapid rise and sees ASEAN as a bulwark of stability, but as that weakens, it is turning more to bilateral ties with the Philippines in the forefront. With confidence in the US presence in the region slipping (due to Middle East priorities, the collapse of TPP, and Trump’s campaign rhetoric), Japan again is considering what it can do by itself and in cooperation with its ally to reassure the Southeast Asian states. Concern was raised about the fragmentation of government policy toward the region: military and economic and ODA ties not working together. Japan was not seen as having a strategic approach or broad strategy, unlike its ally. Yet, some suggested that Japan is seen as less intrusive and can play a bridging role with development and humanitarian assistance as well as a business model useful in a division of labor. Moreover, Japan’s media tolerance from leaders being vilified in the West suggests pragmatism to some. This approach was interpreted as serving the preservation of the liberal regional order and allowing Japan better to align with rising states in the region. Although the term “middle power” is not used by most Japanese, Japan’s quiet agenda in this region parallels South Korea’s efforts to play a bridging role between great powers, while both lean heavily on their US alliances.

The Region

Washington, DC discussions often range beyond one sub-region and one bilateral relationship to address region-wide concerns. One persistent interest of late is One Belt, One Road (OBOR) as China’s strategy for meeting infrastructure needs and transforming the linkages between it and regions as far away as Europe and Africa. Discussion centered on the way projects would be determined: would political interests outweigh very rigorous calculations of demand and benefits? Can countries carry the loans they accept, keep up with maintenance, remove barriers such as border crossings that limit the value of the new construction, and make effective links to their local economies? Is China more interested in transit arteries and markets than in fostering local manufacturing and transparency? The first wave of OBOR centers on hubs and infrastructure such as ports and trains without ensuring an integrated developmental approach with the bottom-up complementing the top-down. Given the troubles in Kazakhstan, Iran, and Pakistan—along the corridors extending from China—turning peripheries of the world economy into some sort of center, as some suggest, appears difficult. The private sector does not seem to be ready to carry the load. Security is uncertain. The global economy’s reach is in doubt. Will trouble ensue from China bypassing Russia? Many questions were raised despite agreement that huge infrastructure needs exist.

Russia

Sino-Russian and Russo-Japanese relations are influenced by energy negotiations; so an accurate assessment of Russia’s capacity to export oil, gas, electricity, and coal is salient for predictions on how relations will evolve. One exchange in DC doubted that the results would be as promising as many Russians have argued. On the topic of refining oil in Russia or using it for petrochemicals, listeners were told that China insists on receiving crude oil and even if Russia did process it transport costs would make it non-competitive. On export volumes, the message is that Russia now has a growing output of oil and gas and can increase production for a time, but pipelines are not in place for delivery. From early 2020, production is likely to slide rapidly as demand for it fails to grow much and prices remain too low to justify the large expenses in infrastructure to Asia that are needed. By the time the Power of Siberia pipeline is operational in 2023-2024, China will have shale production and more LNG from elsewhere, keeping its demand in check. An Altai gas pipeline is problematic to a greater degree. Russia has little leverage in negotiations, and they are stalled over who builds what and other technical details. Russia can expand gas production, but the price may not be competitive for its exports. Russia can also use its low-price electricity for domestic production, as of steel and aluminum, but there is already a glut of such products on the world market and Russia’s transport costs are high.  

If coal exports have recently risen, a tribute in part to the cheap ruble and China’s sudden shut down of coalmines, the outlook is not favorable for long. Moreover, without massive investment, Russian energy production is likely to fall sharply in light of its aging infrastructure. The failure to secure Chinese financing after hopes were raised in 2014—accompanied by periods of no responses to phone and e-mail messages—leaves Russians turning to Japan and India. Yet, Japan is dangling offers in order to win concessions on islands with little economic reason to invest. There is much unknown about Russian plans to establish an electrical super-grid, given the expensive costs of transmission. Meanwhile, sanctions have foiled Shell’s interest in LNG expansion for Sakhalin-2, at a time the cost of borrowing has skyrocketed for Russia. In these tough times, Russian elite infighting is intensifying, leading to more danger of takeovers and doubts about privatization. Sanctions serve as a convenient excuse, but should they be dropped, the problems would endure. Russia’s economy rests on three export legs: energy, nuclear reactors, and arms sales. Competition in reactor exports, notably from China, along with energy troubles does not bode well.

Attention to Russia’s Asian vector indicated meaningful change but serious barriers. If it drew notice at the end of the Gorbachev era with diplomatic breakthroughs with China and South Korea and intensified in the second half of the 1990s with intense diplomacy led by Primakov, Putin made it a priority in 2000 and followed with a new approach to dampen disquiet in the Russian Far East and to use this as a major platform for a new energy strategy, requiring massive infrastructure development. Soon assistance to the Russian Far East was multiplying. In the crisis of 2008-2009, national survival was seen as necessitating a turn eastward. In the run-up to the APEC summit of 2012 vast sums were spent, as the ESPO pipeline came online and a minister of Far East development was named. Yet, it was only in 2014 in the wake of the Ukraine aggression and sanctions that the reorienting from Europe to Asia drew the full attention of Russia’s leaders. Even so, plans continue to be frustrated; energy prices have thwarted some, and illusions about how to draw investments (such as the appeal in 2016 to the AIIB for railroad funding) have not been satisfied. 

With a Trump-Putin romance possible, discussion swirled about Russia’s prospects. While US-Russia relations are viewed as at rock bottom today and would improve, this is seen to be ephemeral. Just as Putin appears to be demanding too much of Abe in a time of upbeat meetings and negotiations, he is likely to overreach in dealing with Trump, seeking not only an end to sanctions but demilitarization of NATO, the removal of missile defenses, large-scale investment and trade, and an end to what is called “democracy promotion.” Most of all, Putin seems bent on having a Russian sphere of influence recognized, while shattering the trans-Atlantic alliance system. At the same time, Putin will be striving to maintain the Sino-Russian partnership. Yet, his triumphalism, building in 2016, faces some sober realities. Trump’s mixed agenda will include a more assertive US stance on issues at odds with Putin, such as Iran. US military strengthening and pressure on allies to do likewise will put more pressure on Russia. Energy expansion will weaken Russia’s energy card. Prospects for the Eurasian Economic Union look grim. Russia’s capacity to compete with China in Central Asia is declining. Moreover, Trump’s overtures to Putin complicate his resort to a new cold war mentality to legitimate his leadership at a time of bad news. Failure of the “turn to the East” is unlikely to be replaced by a “turn to the US” as a viable, lasting approach or legitimizing narrative. Even more in Asia than elsewhere, demographic and economic realities leave Russia in urgent need of a sharp change of course, which Putin shows no sign of pursuing as elite infighting intensifies.

The Trump effect aroused consternation in some exchanges. Aware that US leaders had for a century played an outsize role in setting an agenda for Europe—Wilson in 1917, Roosevelt in 1941, Bush in 1989—commentary warned that Trump in 2017 may reverse much of what they had tried to achieve with ramifications for Asia as well. After all, the post-Cold War era is depicted as anti-imperial powers, pro-self-determination of nations, and guided by universal values. Trump looms not really as a realist questioning the liberal ideal previous presidents articulated, but as a force for a transactional approach bereft of values—a grand bargain with Russia and then China based on tradeoffs, not international norms. This would open the door to the spheres of influence Moscow and Beijing are seeking, undercut allies and partners on the frontlines, and split US foreign policy elites in internecine struggles at odds with deterrence. It is widely assumed that US policy will be rife with contradictions and will fail. DC discussions are deeply skeptical about the incoming president.

On Japan-Russia relations DC talks took notice of the upswing in diplomacy under way. Is this a problem for Washington? The easy answer is “no,” since Japan makes clear that the goal is the recovery of territory, and there are limits on economic ties in order not unilaterally to break the sanctions regime. Yet, there is trepidation too that Putin may “get out of the box” of G7 unity and sanctions. This uncertainty gave way in late November to awareness that Putin is in no hurry to make a deal with Abe and even greater trepidation that Trump may alter this entire framework.

China

Exchanges regarding China reveal a diversity of thinking. Is it a source of stability or instability in East Asia? Economically, it has contributed mostly to stability, but in the military area instability is the main impact. Yet, the advise offered was to tread quietly on freedom of navigation demonstrations to indicate that they are a normal occurrence, and to be newly wary of some negative economic trends, such a closing some markets to FDI, while welcoming infrastructure investments abroad, RCEP, and the AIIB as not a challenge to international institutions. In this approach, the US approach would continue to welcome China’s integration into the global economy as long as China was not trying to limit interdependence, and strengthen US military ties and presence in order to prevent China from using force to settle disputes. The case for China being more of a source of stability denies that states must choose the United States or China and urges neither side to overreact as peaceful competition proceeds. It holds that as long as the US side does not press a values agenda with linkages to trade and try to impose US domestic law rather than international law stability will prevail. The exchange offered warning signs about the potential for greater instability, but it was inconclusive about the prospects for that, with some split on whether China would be the source of instability without political reform.

Both the security and economic themes were developed further in the discussion. China’s sovereignty and maritime interests have mainly negative implications for global security is a viewpoint that many do not share. Yet, the need for restoring a credible US conventional deterrent was widely seen as critical for stability. China views the US presence in East Asia as unfair and a Cold War mindset since it is the result of not removing forces after the Cold War unlike in Europe. It also views the US impact on Japan as no longer restraining Japan, but pressing Japan to build up its military. Such Chinese thinking complicates finding common ground on security.

When Trump’s stance on Chinese security arose, it was noted that he had little to say about that unlike on economic matters. Yet, policies that match his rhetoric on trade could have a spillover on security. Also, Republican officials able to support Taiwan more fully and working with the DPP could have a negative impact on the Sino-US relationship. The assumption is that neither Trump nor Xi Jinping are at all inclined to look weak, complicating the management of tensions. As a “dealmaker” Trump might try to reach an agreement with China on security, but there is doubt that it would be one many US security experts would welcome. Should China take a hard line toward Taiwan without being provoked, that would be difficult for the US side not to resist with greater support for Taiwan. As for allies, they largely prefer no US show of force and no abandonment, but more restoration of the US deterrence capacity. Tensions, DC listeners heard, are best reduced by stronger security guarantees and no G2 negotiations that leave allies fearing being abandoned.

As for economic themes, views were split on whether China seeks to undermine the rules-based international system from which it has gained enormously. If the focus is not on the US-desired liberal world order and democracy, but on rules that apply mainly to economic matters, the existing rules-based order is seen ambivalently in China, leading to differing conclusions. A revolutionary power would, by definition, seek to overthrow the order, while a revisionist power would strive to undermine it in some areas, rejecting the status quo. Driven by its obsession with preserving the monopoly rule of the communist party and by the ambition to establish China as the predominant power in East Asia and eventually as a power on a par with the United States globally, China is revisionist while reinforcing some existing institutions and principles: hard sovereignty not brooking much interference; the UN system, but without humanitarian protections; the WTO, with twists that violate its spirit; the NPT, despite treating denuclearization of North Korea as a secondary objective; the Internet, only if there is a new notion of Internet sovereignty; and the UNCLOS, if it is marginalized when historical rights are invoked. China is more revisionist when it comes to regional matters and security than to global economic concerns. Efforts to marginalize the United States are more pronounced at the regional level. Indeed, it is the view of some that planning for Chinese centrality through One Belt, One Road and for a Eurasian order safe for authoritarianism with restricted flows of information, people, and goods, and insulated from what exists of liberal world order, is the crux of what makes China a revisionist state beyond security goals.

The case that China is a reformist more than a revisionist state centers on clashes not with the rules but with China’s status in existing institutions. The idea is that the United States is the state trying to promote values and impose a liberal order that does not allow China to make the rules, as in the TPP pursuit, while also applying a double standard when it defies the Security Council in the use of force. China knows that it lacks allies and soft power to change the existing order and has no alternative to it, but it still seeks a greater say while exerting a blocking role against US efforts. In this perspective, there is no common Sino-Russian challenge to this order since the two sides do not trust each other or agree on values; whereas the alternative view is that they share much in common, especially in seeking to weaken the West and to revise the international order in ways that go well beyond reform changes.

Another exchange over China asked if its political model can work for a successful economic transition or if it requires radical reforms. Invoking modernization theory and comparative socialist studies leads some to conclude that for a middle-income country and a country at this stage of evolution from traditional communism radical political reform is essential. Such a transition has proven difficult for many states, and China is backtracking from reform in critical respects, suggesting that it is not likely to succeed in the transition. After all, it has delayed economic reforms for one or two decades (depending on the framework used) beyond what would have been advantageous, much as the Soviet Union delayed from the 1960s abortive efforts only to find that Gorbachev’s perestroika came too late. While soft authoritarianism may suffice to make the transition, if it begins at an earlier enough time, the delays to date lead some to conclude that only political reform, as occurred in South Korea and Taiwan in the 1980s, will now permit a successful transition. Rejecting these arguments, a comparative Confucian approach argues that radical political change is a recipe for instability and failure, and that top-down, benevolent reform can work. The danger in Chinese history comes from populism rather than meritocratic rule, and China today, bolstered by its anti-corruption campaign, has experienced leaders with public support who can make the gradual changes needed. Rather than making broad comparative communist arguments, one should stress comparative Confucian themes in order to assess China’s prospects and guide its path, listeners were told.

At the core of this exchange are questions about the value of comparing China with the Soviet Union. In the 1990s, China appeared to learn critical lessons from that country’s collapse, making reforms in many areas. Yet, after wavering in the 2000s, the 2009 shift to hard authoritarianism and an aggressive foreign policy left little room for applying the lessons that should have been grasped. Indeed, the debate in China over the Soviet collapse turned by the early 2000s in a direction more hostile to reform and more supportive of repression, which Gorbachev had failed to use. In China even earlier—by the early 1990s—the debate over modernization theory had put political reform off limits. Censorship over comparative analysis—no less over comparisons of the Confucian legacy in East Asia—has complicated reform efforts.

#Asia pivot #Asian Infrastructure Investment Bank #Eastern Economic Forum #energy #Korean 2017 elections #Middle Power Diplomacy #Northeast Asia Peace and Cooperation Initiative #One Belt One Road #Regional Comprehensive Economic Partnership #sanctions #spheres of influence #Territorial Disputes #Trump administration #Ulaanbaatar Dialogue