East Asia Trilateral Summit

1: The China-ROK-Japan Trilateral Summit is expected to be resumed over the weekend after a 3-year hiatus. Can you first give us a brief introduction to the background of this meeting this time?

I believe that the gradual but steady thawing of the Japan-China from the spring of 2014 including the two summits on the edges of multilateral sessions has set the stage for normalization of the political relationship. More specifically, I believe that the bilateral improvement spurred South Korea to seek a rapprochement of its own. And what better venue for this than the trilateral summit, which is South Korea’s turn to host—a home game, if you will? And Japan has always been working tirelessly to this end. Indeed, it is unnatural for the heads of three neighbors with deeply intertwined economies and highly reliant on the global market for manufactured exports and commodity imports not to discuss issues of common interest and/or concern. Moreover, each of the three economies now faces serious structural challenges that it must confront forcefully or suffer the long-term consequences. The trilateral summit goes a long way in defusing a political distraction.

2: What sort of issues do you expect that this summit will try to focus on? How important are they to the three countries?

A recent news report says that they will confirm cooperation in such areas as disaster prevention, the environment, and tourism, and talk about cybersecurity and making progress on the China-ROK-Japan FTA. Now the summit will have no substantial bearing on most of these matters. They would move ahead just as smoothly if the three heads kept kicking the trilateral can down road. One exception is that it would give the ROK authorities sufficient political cover at home if they decide to seriously pursue the trilateral FTA.

3: The three countries also resumed negotiations over the China-ROK-Japan FTA. China and ROK have already signed a bilateral FTA. The obstacles apparently remain between China and Japan as well as ROK and Japan. How likely do you think that they may make a breakthrough?

The three governments will behave constructively on the trilateral FTA. However, I am rather pessimistic about the prospects for a breakthrough. ROK does not have much to gain, since Japan already imports most manufactured products tariff-free. And why would ROK want to compete in the Chinese market with Japan on an equal footing? As for China, I’m sure that it wouldn’t mind having Japan compete with ROK for its favors on an equal footing, but as I said, Japan already imports most manufactured products tariff-free, so there’s not as much urgency for China than there is for Japan. And, of course, it takes three to tango. I will be very happy, though, if I’m proven wrong.

4: South Korea and China are not members of the TPP. How will this affect China-ROK-Japan FTA negotiation? Will this pushed the two countries to seek an early conclusion of the China-ROK-Japan FTA negotiations?

I think that it affects ROK negatively with regard to the trilateral FTA. I expect ROK to focus on joining the Trans-Pacific Partnership (TPP), which promises more substantial benefits than a trilateral FTA and is unlikely to include China in the near future. As for China, I believe that it will find that the TPP hurdle is too high, but a trilateral FTA is too small a consolation prize. Instead, I expect China to focus on another broad-scope trade agreement, the Regional Comprehensive Economic Partnership (RCEP), which will also serve as a geopolitical counterweight to TPP.

5: Earlier this week, China’s state councilor Yang Jiechi visited Japan, where he met with Japanese Prime Minister Shinzo Abe. Both sides expressed the willingness to improve ties. Can we see this meeting as well as the upcoming summit as a thaw in relations between China and Japan? Why do you think that this is happening even when the key thorny issues between the two sides still remain unsolved?

This is the culmination of a painstaking process of rapprochement since Prime Minister Abe’s visit to Yasukuni in 2013. The “key thorny issues” are mostly matters of perception; on their own, they have very little tangible effect on the real world. Japan is not executing a landfills and building air strips on the Senkaku Islands. China is not digging for oil on the Japanese side of the median line. And so on. Now, Prime Minister Abe issued a 70^th Anniversary statement that was tolerable to the Chinese authorities, and has stayed away from Yasukuni. There remained no reason that the heads of two neighboring countries highly reliant on manufactured exports and commodity imports should not meet to give their blessings to engagement in areas of common interest and/or concern.

6: Do you expect the summit to add strength to the China-Japan trade relations, which are going downhill since 2012?

I expect it to make Japanese-brand goods and services marginally more acceptable, but not by much. For better or worse, it has been business-as-usual on the economic front for the last couple of years, and so it will remain. The vector of the bilateral trade relations will mostly be determined by the same factors that affect the rest of China’s trade relations. You know, things such as what China will or won’t do with regard to what it considers to be strategic industries or flagship companies, whether Chinese wages keep going up, and so on.

7: Will this summit have any impact on the denuclearization of the Korean Peninsula in any way?

No. The most that I expect to emerge from the summit on this issue is some vaguely worded admonishment of North Korea. China is the only one that can turn the screw hard enough to force North Korea to give up its nuclear weapons and ballistic missile programs completely, and it probably would if it could do so without decisively destabilizing the North Korean regime. But it is not going to risk the collapse of the Kim dynasty just to make Japan feel safe, or even to make the United States happy.