Why Japan Is Begging Trump for Help
By WILLIAM PESEK
Escaping overseas as scandals explode at home is perhaps the oldest of political strategies. Japan’s Shinzo Abe hopes to make it seem new again as he arrives at Mar-a-Lago this week.
There are few better distractions—or shinier objects—than President Donald Trump. And Prime Minister Abe hopes getting a warm welcome at Trump’s “Winter White House” will remind 127 million Japanese back home he’s still got some diplomatic game.
Abe’s approval ratings show a distinct lack of faith. A year-long cronyism controversy involving a sweetheart land deal drove his numbers below even Trump’s. Nor are voters happy with Abe’s enthusiastic embrace of a leader whose bombast is bringing Japan nothing but grief—a scandal all its own. A month ago, Abe seemed a shoo-in for a third term, putting him on course to be Japan’s longest-serving leader. Now, Tokyo is buzzing about who’s next.
The stakes couldn’t be higher for Abe’s April 17-18 Trump catchup. To save his premiership, he must return home with three vital deliverables.
One: Stop the Tariff Insanity. Japan’s government was just as shocked as corporate chieftains to see Abe’s pal refuse to give Tokyo an exemption on new levies. Equally shocking is Trump’s apparent U-turn on the Trans-Pacific Partnership. In January 2017, three days into his presidency, Trump reneged on Barack Obama’s China-containing, 12-nation trade deal.
It humiliated Abe, who 67 days earlier hustled to Trump Tower to head off Washington’s TPP exit. Twelve months later, Trump added salt to those wounds by adopting a weak dollar policy and slapping duties on steel and aluminum—25 percent and 10 percent, respectively. He doled out exemptions to Canada, Mexico and others, but none for best-friend Abe. Then came Trump’s proposed $150 billion worth of taxes on goods from China, Japan’s main export market.
Trump’s sudden TPP flirtation could either end in triumph for Abe or ignominy. Obama’s trade deal was a cornerstone of “Abenomics,” the prime minister’s three-phase plan to defeat deflation and take on China. It meant cajoling powerful vested interests—including agriculture and fisheries – to lower defenses and modernize. Abe spent vast sums of political capital getting his Liberal Democratic Party, which has held power almost continuously since 1955, on board.
The first phase of Abe’s plan—aggressive monetary easing – began in 2013. Construction ahead of the Tokyo 2020 Olympics took care of the second. But deregulation was always the most impactful step toward upping competitiveness. For Abe, TPP is a Trojan horse of sorts. Once inside Japan’s walls, fossilized industries have no choice but to internationalize. Abe got Tokyo’s notorious bureaucracy, farm lobby, the Japan Business Federation, or Keidanren, and powerful construction, finance and energy industries to lower their guards. And then Trump exited, taking with him the economy that matters most to any effort to check China’s dominance.
Trump could be bluffing. Ask Moon Jae-in how trusting the “Art of the Deal” president worked out for South Korea. First, Trump forced Seoul to reopen a trade pact in effect since 2012, claiming “we’re getting destroyed in Korea.” Moon agreed to increase imports of U.S. autos, and a new deal was struck. After all that, Trump refuses to sign it, tying the revamped document to Pyongyang’s nuclear program. So, how do you say “huh?” in Korean?
Either way, Abe must win assurances that Trump has Japan Inc.’s back.
Two: Get Tokyo Some Kim Facetime. Japan isn’t invited to the best show on Earth: Donald Trump meets Kim Jong Un. Sure, the summit might not happen—certainly not if John Bolton, Trump’s new national security adviser, has a say. Whether it’s Kim doing the dissing or China’s Xi Jinping, Abe didn’t make the cut. Yet few countries have more at stake than Abe’s—or greater incentive to ensure its views are represented as the world confronts Pyongyang.
Yet Abe will try to cash the chip he earned Nov. 17, 2016, when, at Trump Tower, he did more to normalize Trump than any world leader since. The ask: Lobby Xi, Kim’s people—or both—to get Tokyo a seat. If not, Abe will ask Trump to put two topics on the table. One, Japanese citizens abducted by North Korea over the years. Two, Kim’s short-range missiles.
The first dates back to a spectacular blunder by Kim’s father. In September 2002, Abe accompanied then-Prime Minister Junichiro Koizumi on a landmark visit to Pyongyang (Abe was then chief cabinet secretary). There, Kim Jong Il admitted something that had seemed like an urban myth. In the 1970s and 1980s, at least 13 Japanese nationals (Tokyo claims it’s 17) had been kidnapped and forced to teach Japanese language and culture at the Kim Dynasty’s spy schools. It’s a deeply sensitive issue for Japanese voters. Abe will press Trump to demand that Kim Jong Un provide details on survivors, if any.
Trump is expected to demand that Kim surrender his intercontinental-range ballistic missiles, along with agreeing to denuclearize the Korean Peninsula. Kim won’t, but it’s a necessary ask. Abe wants Trump to request greater transparency on Pyongyang’s short-to-medium range capabilities, too. After all, if Trump ever were to attack North Korea, Abe’s homeland is the easiest target for retaliation.
Three: Get His Mojo Back. Abe’s embattled premiership needs a serious reboot. His current plight concerns the sale of state-owned land at an 86 percent discount to Osaka school company Moritomo Gakuen, to which Abe’s wife, Akie, has ties. The scandal, which first broke a year ago, recently reemerged with leaked documents. Then came news that the Finance Ministry, run by Deputy Prime Minister Taro Aso, doctored paperwork related to the deal.
Abe’s response has been rather Trumpian: deny, deny, deny with some “fake news” swipes by surrogates. But the drip, drip, drip of bad news pushed Abe’s support into the 30s and made for some volatile stock trading as investors wondered about the durability of Japan’s reform push. In their quiet moments at Mar-a-Lago, perhaps Trump and Abe will commiserate a bit.
What both need, though, is to look presidential. Abe hopes a series of summits will restore some popularity. He’s planning a May tête–à–tête with Russian President Vladimir Putin. A three-way meeting with China’s Xi and South Korea’s Moon is in the works.
Yet no alliance trumps Tokyo’s relationship with Washington, the supplier of Japan’s security blanket. Abe could turn some heads back home by getting the dealmaker-in-chief to invest in Japan. Trump is prodding Abe to buy billions of dollars of U.S. military equipment. Why not seek a little reciprocity? Abe could request that the U.S. load up on Japanese bullet trains and Maglev technology. Surely, long-suffering Amtrak passengers might agree.
Why not seek tax breaks for Honda, Nissan and Toyota, which, by extension, provide more than 1.5 million U.S. jobs in places like Tennessee and Alabama? How about a preferential scheme for U.S.-Japan technology sharing?
This isn’t about altruism. No one arguably does infrastructure better than Japan—and America’s is crumbling. When Tesla’s Elon Musk opened his Gigafactory in Nevada, the battery engineers at Panasonic were among his first phone calls. SoftBank’s Masayoshi Son, meanwhile, is revolutionizing the venture-capital game. Abe could lobby Trump for greater two-way investment between the No. 1 and No. 3 economies and return home with the spoils. And, perhaps, even make his own political prospects great again.
William Pesek is a Tokyo-based author of Japanization: What the World Can Learn from Japan’s Lost Decades. He has been a columnist at Barron’s and Bloomberg.