Male Speaker 1: Fred Hiatt, Male Speaker 2: Michael Schiffer, Male Speaker 3: Michael Green

Date: [5-20-14]

Male Speaker 1: Fred Hiatt, Male Speaker 2: Michael Schiffer, Male Speaker 3: Michael Green, Male Speaker 4: Patrick Cronin, Male Speaker 5: Abraham Denmark, Male Speaker 6: Chen, Male Speaker 7: Male Voice

[O/V]: Overlapping Voices

[U/A]: Unintelligible audio

[START RECORDING [SPFUSA- Patrick Cronin, Abraham Denmark, Michael Green, Michael Schiffer] DATE: [5-5-14]]

00:00:00

Fred Hiatt: I should say at the beginning that we have Michael Schiffer at the far end, he has to leave a little bit early and, so, I’m going to let him go first and he also, given his position on the Senate Foreign Relations Committee, has asked that he not be―his comments not be quoted by name. The others would all like to be quoted. But, anyway, Michael, why don’t we start with you.

Michael Schiffer: Sure, about that, thank you, and my apologies in advance for needing to leave a little early. Much as I love the Sasakawa Peace Foundation, much as I love the US-Japan alliance, I love my daughter just a little bit more and I need to go and pick her up. And also, thank you for considering what I have to say as non-attribution, as staff up in Congress, you know, our job is to be seen and not heard and I think we’ve all seen in the past couple of days the dangers that can come to people that say things without being clear, in certain settings that they mean to be off the record, not for attribution. So, please, as Fred said, you know, if I say, by sheer random happenstance, anything that happens to be interesting, you can attribute it to a Congressional staffer, but don’t stick my name to it. Or if you want to quote a Michael just spell the last name G-R-E-E-N and we’ll be fine.

Michael Green: Can’t I just pick up your daughter? [Laughter]

Michael Schiffer: I think we may be getting onto dangerous grounds here. I guess, I mean, I’ll answer the question that you put before us, Fred, sort of from a backwards perspective from US policy perspective, which is that, as we consider US policy in the Asia Pacific region, as we consider the rebalance, look to the challenges of a rising China, and try to think through how we’re going to be able to create the rules-based order for the region that President Obama talks about, it is a strategic necessity that we see a Japan that is reinvigorated and fully engaged as a full-fledged security partner and diplomatic partner in the region. For the United States, the rebalance starts with our alliances and our alliance structure in the region starts with Japan, and so if we can’t find, in Japan, a robust partner for our efforts and a robust partner that is able be forward leaning and providing public goods for the Asia Pacific region alongside the United States, we’re going to be in deep, deep, deep trouble. Everything we do, and I say this from, just a narrow US perspective, everything we do in the region, radiates through and with Japan, whether that’s on the security side of the ledger looking at our posture and our base presence or whether it’s on the economic and trade side of the ledger, which is why it was such a game changer when Japan joined the TPP and why being able to conclude negotiations with Japan on the TPP is the necessary element for being able to move that forward. And, you know, keep in mind, as I know all of you know far better than I do, you know, when you think about things that are of real strategic significance for shaping the Asia Pacific region for the decades ahead, TPP is of far great weight than 2,500 Marines six months out of the year in Darwin, Australia, or 1,300 Marines, or whatever the final figures will be and a certain number of airmen, you know six months out of the year in the Philippines under the new basing agreement. I mean TPP is really, really where it’s at when we think about our position in the region and we think about what’s necessary to shape a positive and productive China as opposed to the questions we have about the alternative with China’s trajectory. And so I would say for the US wrap up, I mean, there is a real premium in seeing Prime Minister Abe being able to follow through on the security agenda that he has laid out, on being able to move forward with constitutional reinterpretation and being able to move forward with collective self-defense and being able to move forward on the roles missions capabilities dialogue that we have tried some additional juice into in recent years, so that we can see what sort of complimentary capabilities the United States and Japan, given the fiscal realities that we both face, can develop and deploy in the region. If we’re not able to do that, as I said, there are real structural challenges for the success of US policy. And so, just to stop where I started, a reinvigorated Japan, a Japan that’s embarked on a new era in its security profile in the region is an absolute necessity from a US perspective.

Fred Hiatt: So, Michael G-R-E-E-N, you’ve been following this long enough to know that this isn’t the first ti―I mean, when peacekeepers went out, it was a radical thing, when refueling happened in the Indian Ocean it was a radical thing, is this qualitatively different and do you think the US is going to get the robust partner that Michael Schiffer says it needs?

Michael Green: I think it is qualitatively different, and the reason is because it’s not quantitatively different, in other words, when you face a rising challenge, like China or North Korea, and your budgets are limited, your ability to increase your own defense spending has limits as well, and so smart strategy is to reach out, what the academics call external balancing, and that’s what Abe is doing, not only with us and the defense guidelines review, but also with South East Asia, with Australia, with India, and that is a form of security as well. The whole process really began, I think, in the mid-90s and it was for this same logic, that the Japanese economy was slowing down, particularly in ’95 and ’96, it became quite obvious that China was willing to use coercion, in that case it was the Taiwan Straits Crisis, and so a lot of the seeds for what we would now call Abe strategy were planted then and, frankly, built momentum sometimes it slowed down, sometimes it sped up, but there’s a lot of continuity, and I think what―most of what, if not all of what Prime Minister Abe is trying to do, his predecessor Prime Minister Noda wanted to do as well. But there are some big differences and I’ll just highlight a few quickly. One is, we did a survey as CSIS we’re going to publish soon, where we asked 500 think tankers in Asia their views of the future of security and economic and political order in Asia, and we asked about territorial disputes and one of the questions was “If the other side grabs the territory, should your country fight to take it back?” and in China the answer was 85%, these are think tankers, in the US it was about 85%, and in Japan it was 82%. So I think the seriousness―

Fred Hiatt: But were they lower than that in any country?

Michael Green: Yes, Thailand was very low and we can talk about Thailand in another conference. So, you know, there’s―Japan’s attitudes towards security policy are clearly changing, at the same time, you’ve probably seen polls that show more resistance to collective self-defense than probably the Prime Minister expected. So it’s a bit muddy, but I think it’s pretty pronounced change. The other thing I’d point to is, Patrick and I, when we edited this book, in the late 90s about the future of the alliance, wrote, “at some point, the US and Japan may need to move towards something like a virtual joint and combined command like we have with Korea or NATO,” and we were ver―we hedged it. We said, “If might be possible that we could possibly,” and Patrick’s research assistant put it out first, and tested, was―you know. It was very tentative, we got a lot of push back, but if you look at the attitude in the current government about defense guidelines review, missile defense, intelligence sharing, there’s a much more significant appetite for a virtual joint and combined relationship that you would never have seen twenty years ago, because of fears of being entrapped by the US in a war somewhere in Asia. So there are some very important changes with residual, sort of, pull because of Japan’s strong pacifist culture.

Fred Hiatt: And―but it’s changed because of anxiety about China, Patrick, is that a key factor?

Patrick Cronin: I think the reemergence of China is the dominant theme and concern within Japan and within the region today. The latest statistics showing that China will overtake the United States, at least in purchasing power parity, as the largest economy in the world in 2014, rather than 2019, is, again, an indicator along the way. I’m just back from an allied country I can’t name, talking with their top intelligence chiefs about 2035 and they said, “Tell me why, Dr. Cronin, in 2035 you think China won’t be the dominant Asian military power?” Leaving that debate aside, there’s a lot of linear thinking and a lot of assumptions about the potential growth of China and how they may use that power. We heard Secretary General Ishiba talk about the concern of what if China does use coercive and use of force to try to change the status quo when the system isn’t to its liking, rather than to spend the time to reach out to others to build a larger regional architecture. I think we need three China strategies that are cut part of one, one of them is to counter what I’ve called, tailored coercion, these gray zone areas in this maritime domain. The second one is the longer term countering the anti-access area denial capabilities, which means keeping our military capabilities able to project power forward with a favorable, sort of, cost ratio to losses. And then the third one is the order building―it’s the very, very important one, it is the inclusive rules-based system that Michael Schiffer alluded to. One thing I would say about adding on to Michael Green is, I would maybe even predate our work before then to the Korean Crisis and the reality sinking in in the early 90s, actually, when North Korea was threatening, as they walked away from the Nuclear Non-Proliferation Treaty, that if we had a military conflict on the Korean Peninsula and Japan didn’t come to the assistance, as Richard Armitrage’s full understanding at the time, this could really threaten the solidity of the future of the US-Japan alliance, especially when we weren’t warned in the Post-Cold War understanding until the defense guidelines came along in the mid-90s, later 90s. Last point I would make about this Prime Minister, is that having a second bite at the apple as Prime Minister is so unusual because putting ideas into action is a real skill. As somebody who works with Kurt Campell and Michelle Flornoy and Bob Work I have great admiration for people who can get things done in government. Now at the Prime Minister’s level, the top level of Japan, you’ve had more going on in getting things done on the security front than, you could argue, over the previous twenty years. So, that significant qualitative change, as Mike suggested, and yet, as you pointed out I think Fred in your opening, sort of vignette, quantitatively, we’re still under 1% of the Gross Domestic Product on defense. We heard Secretary General talk about the constraints on a UN charter-based collective self-defense rights, these are very responsible steps, I think, in terms of the security front, but they have a hard edge because there’s so much uncertainty about this reemerging China, coupled with the stilled existing problem in North Korea.

Fred Hiatt: How significant is it and what’s the most significant piece of this, you think something real is going on?

Abraham Denmark: Yeah, I do think that there’s something happening here, as they say. But I don’t think that we’re quite there yet. I think that, if you look at the initiatives that are on the table right now in terms of TPP, in terms of Futenma and the revised defense guidelines that are being discussed and negotiated, these are the items that are still up in the air and I think that, if we’re able to conclude them and we’re able to move forward with them, then I think you have a significant change in Japan’s approach in the alliance dynamics. Until we get―really get to that point, I think you can say it’s, you know, a major change or a change similar to what we’ve seen in the past few years, but really looking at something, calling something significant, there’s still, I think a few things that need to get past the finish line, TPP and especially the defense guidelines being the most substantial. If you look at, in terms of trying to decide what’s the most important, I think that really depends on, you know, what someone’s issue vent is, since I’m not an economics guy, I’m not a trade guy, I, of course focus more on the bilateral defense guidelines as being the most important, especially for the topic of this panel. But if you look at it strategically over the next twenty-thirty years, my sense would be that concluding TPP with the Japan as part of it, would probably have the most significant long term, geopolitical impact.

Fred Hiatt: Well, in that case, let’s do a quick detour to Obama’s trip and, you know, did he get what he should have gotten on TPP, where do you guys think we stand and what are the prospects?

Michael Green: Well, I think he went into the trip on TPP with one hand tied behind his back because the Japanese side was not going to give its best offer until its evidenced the President was willing to put on his armor and take the fight to Congress to get it passed. Usually that’s proven with trade promotion authority of fast track, that whether you, technically need trade promotion authority or can waive is another question, but there was no demonstration, in fact, you’ll recall, after the State of the Union where the President lightly touched on TPP and trade promotion authority and Harry Reid came down the next day and said, “No,” there was silence from the White House, so given all that, it was unlikely they were going to get much and yet, I think that it sounds like quite a bit was accomplished on the market barrier issues. And, you know, the Prime Minister wasn’t going to achieve a deal with the President in Tokyo, because that’s bad politics. He had an―there election in Kagoshima in the next few days too. So, for a variety of reasons I think it’s possible that we’ll find in the subsequent meetings in May and so forth, that there was substantial progress and it could get done in the lame duck session of Congress, I think the jury’s out, I wouldn’t count it as a failure on TPP. On the security side I think the President accomplished a lot, I think there’s bipartisan support for what he did and I find, a little bit unbelievable, this narrative that’s in both media, US and Japanese that somehow the President got tricked, he gave everything Abe wanted on security and got nothing on TPP, that defies the logic of these summits, you don’t trade security for pork (A), (B) you’ve got a lot―

Fred Hiatt: [U/A] Or beef.

Michael Green: Or even beef. Yeah. And he got―the Japanese Prime Minister signed on to sanctions on Russia for the first time in hist―well first time since the Cold War, so that was a big deal. So, I think the Administration should be happy with the trip, but it really, as everyone says, TPP is so critical, it depends on what they do with what progress they did make.

Fred Hiatt: Well, let me ask the Senior Congressional Official, who shall not be named, can TPP get through this Congress, next Congress, Republican Senate, and Democratic Senate? What―how do you see it all playing out?

Michael Schiffer: I mean, my sense is that TPP can get done; I mean obviously it’s going to depend on the final details in getting it through Congress. TPA is a more heavier lift, because with trade promotion authority, from a Congressional perspective, you’re essentially giving the President a blank check and you don’t know what you’re getting back in return, with TPP you at least, or TTEP on the European side, right, you have a structure of a deal, yes there will be constituencies that’ll be unhappy and sectors that will be unhappy, but you’ll also be able to mobilize support from those sectors that are going to win and those parts of the business community that are going to do well. I, you know, it’s a narrow road, to get TPP done during the lame duck, it’s going to require, and Mike is, you know absolutely right on this, it’s going to require the Administration really gurting up and not just the President but a full-court press across all of the different departments and agencies that have an interest in this to really get up there and work the Hill and we haven’t really seen that yet. But if they’re able to close down negotiations over the next couple of months, and really start to go out there and lay the ground work then I think it is, again narrow road, but it is possible to get TPP through when the lame duck comes back in after the elections.