The Abe-Trump Summit: Aiming for the Fairway

Japanese Prime Minister Shinzo Abe will visit the United States later this week for a two-day summit meeting with President Trump aimed at reaffirming the importance of the U.S.-Japan relationship for both countries. They will meet at the White House on February 10 and then travel to Trump’s Mar-a-Lago estate in Florida for a round of golf, an opportunity to develop a foundation of trust that is critical to advancing alliance relationships. This meeting takes place amid concerns in Japan about what the Trump administration’s “America First” construct means for U.S. foreign policy in Asia, as well as the implications of Trump’s formal withdrawal from the Trans-Pacific Partnership (TPP) for bilateral economic ties.

Q1: What is on the agenda?

A1: Scenarios being described for Abe’s visit include a CEO roundtable at the U.S. Chamber of Commerce in Washington on February 10 followed by a lunch at the White House with President Trump’s cabinet, a ceremony commemorating the visit, and possibly a joint press conference. Abe and Trump will then fly to Florida for a private dinner at Mar-a-Lago with their spouses, followed by a round of golf on February 11. This is the first official meeting between the two leaders, but Abe met with Trump in New York shortly after the U.S. election last November to start the bonding process and noted at that time that the last two leaders of Japan and the United States to play golf together were his grandfather, Nobusuke Kishi, and President Eisenhower. Abe thus proposed a round of golf as a good way to begin the Abe-Trump era.

Q2: What does the Trump administration want from this meeting?

A2: Japan is a key U.S. ally in Asia committed to advancing defense cooperation with the United States and other partners to maintain regional stability. As the third largest economy in the world, Japan is also an important economic partner with a long history of direct investment in the United States. Japan has increasingly assumed a leadership role in regional diplomacy and works closely with the United States in institutions such as the G-7 to address global challenges. U.S. Defense Secretary James Mattis visited Japan last week and praised Japan’s alliance contributions as a “model of cost-sharing and burden sharing.” But the Trump administration has sent mixed signals about the relationship thus far, including recent tweets from the president criticizing Japan on economic policy (more below). As the Trump administration develops a foreign policy to confront a rising China, it should soon recognize the importance of a rock-solid relationship with Japan. The core objective for Trump at this meeting is to develop confidence in Abe as a partner who can support U.S. interests.

Q3: What does Japan want?

A3: For Abe, a strong relationship with the United States is critical given the threat from North Korea’s ballistic missile and nuclear weapons programs and China’s rise. Since the 1990’s, Japan has been concerned about the U.S. commitment to defend the Senkaku islands in the East China Sea. Those islands are under Japan’s administrative control but also claimed by China, which has resorted to coercive activities in the air and at sea to back up its sovereignty claims and pressure Japan. In general, previous U.S. administrations have verified that the Senkaku islands are covered by Article V of the 1960 U.S.-Japan security treaty, which obligates the United States to defend territories under Japan’s administrative control—Mattis also did so during his recent visit to Japan, as did Secretary of State Rex Tillerson in a recent phone call with his counterpart—but Tokyo becomes nervous when Washington occasionally flirts with Chinese constructs that place U.S.-China relations at the center of U.S. policy in Asia, such as the “New Model of Great Power Relations” endorsed briefly by the Obama administration. Given uncertainties about how the Trump administration will treat allies, Abe will first and foremost look for a clear commitment that U.S. strategy in Asia begins with the U.S.-Japan alliance.

Q4: How will Abe approach the summit?

A4: Abe reportedly did well in his first meeting with Trump in New York, and in a recent interview with Westwood One Radio Trump said he was looking forward to playing golf with Abe because “you get to know somebody better on a golf course than you will over lunch.” There are concerns about Trump in every allied capital since his awkward phone call recently with Prime Minister Malcolm Turnbull of Australia. Rather than bring a list of concrete “asks,” Abe will likely approach this meeting emphasizing how he aligns with Trump on many of his objectives. Abe can begin by reiterating Japan’s commitment to remain a stalwart ally of the United States, one that is spending more on defense, albeit incrementally, and pursuing defense policy reforms such as exercising collective self-defense to demonstrate Japan’s willingness to assume more risk and burden-sharing in the security alliance. Abe’s approach to Russia, as evidenced by bilateral diplomacy with Putin last December, does not differ that much from Trump’s instincts. And the two leaders also appear aligned on energy issues, such as support for coal, and can potentially pursue energy cooperation as a central pillar of the relationship. Further, Abe enjoys a public approval rating above 60 percent at home and will likely remain in power for some time, which gives him more room to work with compared to other U.S. allies and strengthens the case that Japan can deliver. There is some uncertainty about the future of the economic relationship in economic and strategic terms given Trump’s recent criticisms of Japan and formal withdrawal from TPP, but Abe will likely introduce a broad framework for economic cooperation between the two countries.

Q5: How will economics feature in the bilateral talks?

A5: President Trump has a long public record on Japan that dates back to the 1980s and generally reflects the view that the bilateral economic relationship has seen Japan benefitting at the expense of the United States. Early signs suggest that this view has at least partly carried over to his administration. During the presidential campaign and in its earliest days, the president and senior members of his administration have accused Japan of currency manipulation (alongside China and Germany), criticized Japan for its trade surplus with the United States, and threatened carmaker Toyota with a border tax if it followed through on plans to build a new plant in Mexico. The recent release of data showing that, in 2016, Japan surpassed Germany to become the second-largest source of the U.S. goods trade deficit comes at an awkward time for the relationship.

Against this backdrop, Prime Minister Abe will likely be at pains in his conversations with President Trump to emphasize the breadth, depth, and importance of the economic relationship, as well as the benefits it brings to the United States. U.S.-Japan bilateral trade flows totaled more than $350 billion in 2015, making Japan the United States’ fourth-largest trading partner. Japan is also the largest foreign owner of U.S. Treasury bonds and the second-largest source of foreign direct investment in the United States. Estimates suggest that investments in the auto industry alone support more than 1.5 million U.S. jobs, and that manufacturing jobs created by Japanese investment pay above-average wages for the sector. On the issue of currency manipulation, the yen has experienced significant volatility in recent years, but the Bank of Japan has not directly intervened in currency markets since November 2011.

Responding to the new administration’s expressed priority of creating high-quality jobs for American workers, Abe is expected to seek Trump’s support for a proposed a “U.S.-Japan Growth and Employment Initiative.” While details of the package have not yet been officially confirmed, the five-part program will reportedly include a plan for economic cooperation aimed at generating 700,000 jobs in the United States. It is also expected to include efforts to increase Japanese involvement in U.S. infrastructure investment, expand cooperation on global infrastructure investment, jointly develop robotics and artificial intelligence technologies, and enhance cooperation on cybersecurity and space exploration.

There has been significant speculation as to how Abe will approach the issue of the Trans-Pacific Partnership (TPP) and the prospect of negotiating a bilateral free trade agreement (FTA) with the United States. On his first day in office, President Trump issued an executive order withdrawing the United States from the TPP. He and his administration have since reaffirmed a preference for bilateral rather than multilateral trade agreements, and have indicated interest in pursuing such an agreement with Japan. Since Tokyo joined the TPP negotiations in 2012, Prime Minister Abe has emerged as one of TPP’s strongest supporters; Japan is the only country to have already ratified the deal. However, in recent remarks before the Japanese parliament, Abe expressed openness to pursuing a bilateral FTA, while promising to protect sensitive agricultural sectors, such as beef, rice, and wheat. There is a reasonable likelihood that the two leaders will announce a decision to explore a pathway toward a bilateral deal, though reaching a final agreement will present significant political challenges for both sides.

It is unclear how far the two leaders will go in discussing U.S.-Japan regional and global economic cooperation. In recent years, Prime Minister Abe has embraced an expanded role for Japan in a number of key international economic forums, including the G7, the G20, and in the Asia-Pacific Economic Cooperation (APEC) grouping. Washington and Tokyo have generally helped to reinforce each other’s priorities in these forums, a trend that picked up momentum in the latter half of the Obama administration. Prime Minister Abe may look for opportunities to carry this cooperation forward and engage President Trump on areas of mutual interest ahead of Italy’s hosting of this year’s G7 summit in May, with an eye toward establishing key areas for cooperation that can carry through the Hamburg G20 in July and November’s APEC summit in Vietnam. However, the amount of attention that President Trump will devote to matters of global summitry remains to be seen.

Q6: Will there be any deliverables?

A6: The two governments might issue a joint statement highlighting key themes from the meeting, but this summit is more about establishing a rapport between the leaders as prelude to a comprehensive agenda that will emerge over time. Abe and Trump will no doubt address several issues as they traverse the golf course, but they need not focus too much on hitting long drives. For now, the aim is to simply make sure the U.S.-Japan relationship stays on the fairway.

Michael J. Green is senior vice president for Asia and holds the Japan Chair at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Matthew P. Goodman is senior adviser for Asian economics and holds the William E. Simon Chair in Political Economy at CSIS. Nicholas Szechenyi is a senior fellow and deputy director of the CSIS Japan Chair. David Parker is an associate fellow with the William E. Simon Chair in Political Economy at CSIS.

Critical Questions is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2017 by the Center for Strategic and International Studies. All rights reserved. Photo credit: Chip Somodevilla/Getty Images
Matthew P. Goodman

Matthew P. Goodman

Former Senior Vice President for Economics

David A. Parker