India and the European Union on Monday formally relaunched negotiations toward a free trade agreement, ending a hiatus of nearly a decade and aiming to strike a deal by the end of 2023. The two sides hope to overcome sticking points as they aim to reduce their reliance on China.
Volume 5, Issue 3
The United States turned multilateralist this quarter, sitting down in a six-party setting to discuss North Korea’s nuclear weapons threats even as a U.S.-instigated 11-nation group was practicing how to prevent Pyongyang (among others) from exporting weapons of mass destruction (WMD) elsewhere. More quietly, Australia’s “coalition of the willing” seems to be restoring some semblance of order in the Solomon Islands, even as another island’s leader – Taiwan’s Chen Shui-bian – unilaterally stirred up cross-Strait tensions with talk about referendums, constitutional changes, and the irrelevance of “one country, two systems” following the Hong Kong Anti-subversion Bill controversy. U.S. military restructuring plans in South Korea moved ahead slowly as did any progress in obtaining Aung San Suu Kyi’s release from “protective custody” in Burma.
Meanwhile, a failed military mutiny in the Philippines indicated that serving as a “second front” in the U.S.-led war on terrorism is not the only challenge facing President Gloria Macapagal-Arroyo’s beleaguered government. Speaking of beleaguered, President Bush went back to the United Nations this quarter, not to apologize for bypassing the hamstrung UN Security Council in invading Iraq but to seek greater international help in securing the peace, while still offering the UN only limited involvement in the management of postwar Iraqi affairs. And, trade negotiators are hoping that next quarter’s premier regional multilateral economic event – the Asia Pacific Economic Cooperation (APEC) Leaders’ Meeting – avoids being the disaster that this quarter’s World Trade Organization (WTO) gathering in Cancun proved to be.
It has been a quiet quarter for the U.S.-Japan relationship. The dispatch of troops to Iraq notwithstanding, there have been no serious, specific bilateral problems for the two governments to address. While they have diverged on some multilateral questions, the goodwill accumulated over the last two years has bridged those differences.
In both countries, domestic politics dominated decision making. Japan Prime Minister Koizumi Junichiro focused on re-election as Liberal Democratic Party (LDP) president; having won that campaign he now turns to the general election expected in early November. U.S. President George W. Bush has begun to concentrate on the 2004 campaign with U.S. voters increasingly concerned about their economic prospects. Fortunately for Japan, in this context, China looms larger in the American mind. Attention will now turn to the Oct. 17 summit between the two men. Both governments will do their best to ensure the meeting goes well. It should: U.S.-Japan relations are one of the few unquestioned successes for both administrations.
Continued cooperation on security matters, especially the challenge posed by North Korea’s nuclear weapons programs, bolstered U.S.-China relations this quarter. Washington lauded China’s vigorous diplomatic efforts that culminated in the holding of six-party talks in Beijing at the end of August. China formally joined the Container Security Initiative (CSI), agreeing to permit U.S. Customs and Border Protection officials to work side-by-side with their Chinese counterparts to target and pre-screen cargo containers shipped from Shanghai and Shenzhen destined for the United States. U.S. officials publicly rebuked Beijing for not living up to its promises made last December to make progress on specific human rights issues. Treasury Secretary John Snow visited Beijing and tried, but failed, to persuade Chinese officials to appreciate the renminbi (RMB). The Department of Defense released its annual report on July 30 on Chinese military power.
If you must pick one event in the least several months that is truly indicative of the tenor of the U.S.-Russia relationship, you need not look to the wooded hills of Camp David, or the gilded halls of the palaces around St. Petersburg, which were the sites of the last two presidential summits. Instead, you should look to the gasoline station on the corner of 10th Avenue and 24th Street in Chelsea on Manhattan. It was there on the morning of Sept. 26 that Russian President Vladimir Putin dropped in for a cup of coffee – with skim milk of course – and a Krispy Kreme doughnut. The station in question was the first Lukoil station to be opened in the United States, and Putin was there for the ribbon cutting ceremony. The U.S.-Russian effort to push energy ties is taking precedence over most other aspects of the relationship. The two sides continue to agree to disagree about Chechnya, Iran, and Iraq. NATO and Central Asia are still sore points. Trade issues and human rights to this day raise tensions in certain areas. But the energy relationship is global and strategic and it continues to grease the squeaky spots of this post-Cold War “partnership.” To truly understand why business and political leaders in Moscow and Washington still drown out the noises of discontent, look no further than the gas station on 10th Avenue and 24th Street.
Acts of terrorism, arrests of terrorists, and judicial convictions dominated the Southeast Asian political scene this past quarter. The Jakarta Marriott bombing, the capture of Hambali – Jemaah Islamiyah’s (JI) most notorious fugitive – and the conviction of several of the Bali bombers as well as JI’s spiritual leader, Abu Bakar Bashir, capped a tumultuous three months during which the Philippine government put down an abortive military mutiny, ASEAN and U.S. relations with Burma further deteriorated, and new efforts to improve security collaboration within the region were made. U.S. intelligence played a significant role in terrorist apprehensions; however, Washington’s unwillingness to give Southeast Asian authorities access to terrorists in U.S. custody somewhat soured relations with regional allies.
China continued to make effective use of multilateral structures in Southeast Asia during the quarter to consolidate the “insider” role it is assuming in the region, and to foster economic and other forms of interdependence with members of the Association of Southeast Asian Nations (ASEAN). Chinese initiatives are wearing well in most ASEAN capitals, especially proposals designed to protect Asian economic security and promote growth. Figures on China-ASEAN trade during the quarter showed major gains, and China’s non-energy investments in Southeast Asia were on the rise.
On the security front, China called for follow up to last December’s Declaration on Conduct in the South China Sea, and renewed a proposal for joint development of disputed areas there. Beijing suggested linking counterterrorist efforts in Southeast Asia with those of China and Central Asian members of the Shanghai Cooperation Organization. High-level visits during the quarter advanced China’s particularly close cooperation with Malaysia and Thailand. Burma’s military junta, under heavy international pressure to release imprisoned democracy leader Aung San Suu Kyi and institute political reforms, sought China’s blessings for its unresponsiveness, and got them – at least for the public record.
The initiative on cross-Strait issues this quarter has been centered in Taiwan. Preoccupied with other issues, Beijing has taken no initiatives and concentrated on countering Taipei’s moves. Chen Shui-bian’s efforts to arrange referendums, to heighten Taiwan’s national consciousness, and to manipulate the cross-Strait transportation issue have all been shaped with an eye to the coming presidential election campaign. In these circumstances, there has been no breakthrough on either the political or economic aspects of cross-Strait relations and none is likely in the foreseeable future. While Beijing has been very restrained, Chen’s electioneering could well heighten tensions in the Strait.
Almost a year after charges that North Korea has a second, covert nuclear program plunged the Peninsula into intermittent crisis, inter-Korean ties appear surprisingly unaffected. The past quarter saw sustained and brisk exchanges on many fronts, seemingly regardless of this looming shadow. Although Pyongyang steadfastly refuses to discuss the nuclear issue with Seoul bilaterally, the fact that six-party talks on this topic were held in Beijing in late August – albeit with no tangible progress, nor even any assurance that such dialogue will continue – is perhaps taken (rightly or wrongly) as meaning the issue is now under control. At all events, between North and South Korea it is back to business as usual – or even full steam ahead.
While (at least in this writer’s view) closer inter-Korean relations are in themselves a good thing, one can easily imagine scenarios in which this process may come into conflict with U.S. policy. Should the six-party process fail or break down, or if Pyongyang were to test a bomb or declare itself a nuclear power, then there would be strong pressure from Washington for sanctions in some form. Indeed, alongside the six-way process, the U.S. is already pursuing an interdiction policy with its Proliferation Security Initiative (PSI), which Japan has joined but South Korea, pointedly, has not. Relinking of cross-border roads and railways, or the planned industrial park at Kaesong (with power and water from the South), are examples of initiatives which might founder, were the political weather around the Peninsula to turn seriously chilly.
The quarter started with the first ever meeting between South Korean President Roh Moo-hyun and PRC President Hu Jintao in Beijing, and unfolded with the most assertive Chinese mediating efforts yet to deal with North Korean nuclear tensions, including the hosting of an unprecedented six-party multilateral dialogue that included North Korea, the United States, Russia, Japan, and South Korea in late August. The PRC utilized its long-standing relationships with Pyongyang to maximum effect in an attempt to get North Korea to come to the negotiating table. Intensive China-South Korean consultations included a visit to South Korea by the head of China’s Supreme People’s Assembly Wu Bangguo and several meetings between the South Korean and Chinese foreign ministers to discuss next steps in capping tensions between North Korea and the United States over the North Korean nuclear development effort.
The only thing more intense than China-Korean political consultations over the North Korean nuclear issue is the continuing boom in China-South Korean trade, which has averaged over 20 percent growth year-on-year. This quarter may well mark the point at which the PRC emerges as South Korea’s number one trading partner, surpassing the trade volume of the United States for the first time. South Korean investment and export growth continues apace, but as South Korean industry moves its manufacturing to China, Roh administration’s initiative to turn South Korea into the economic hub of Northeast Asia also appears to be ringing hollow.
In anticipation of the 25th anniversary of the Japan-China Friendship Treaty, both Tokyo and Beijing worked to normalize political relations. Japan’s chief Cabinet secretary and defense minister traveled to China, while China’s foreign minister and the chairman of China’s National People’s Congress visited Japan. But, at the end of the comings and goings, Prime Minister Koizumi Junichiro had yet to secure the long-coveted invitation for an official visit to China.
Aug. 15 brought with it the customary end of war remembrances as well as lectures about history and its proper understanding. History did, however, intrude on 21st century reality, as the unearthing of chemical weapons abandoned by the Imperial Army in northern China led to the hospitalization of over 30 construction workers and the death of one. The Koizumi government moved quickly to deal with the issue, offering “sympathy” compensation to the families affected.
Meanwhile, economic relations continued to expand. Two-way trade skyrocketed during the first half of the year, even as the SARS epidemic raged during the second quarter. By mid-July, most Japanese companies in China were operating on a “business as usual basis.” At the same time, domestic economic pressures were building in Japan to push the Koizumi government to seek a revaluation of China’s currency.
Last September, Japan-DPRK relations looked to have made a major breakthrough with the unprecedented visit of Japanese Prime Minister Koizumi Junichiro to Pyongyang. Rodong Sinmun marked the anniversary this year by warning about an “unavoidable” war between the DPRK and Japan. The Trilateral Coordination and Oversight Group (TCOG) remained active this quarter prior to and in the aftermath of the six-party talks over the DPRK’s nuclear weapons. Japan played a “starring role” in Proliferation Security Initiative (PSI) exercises in the Coral Sea.
The specter of oil is haunting the world. The battle of oil, however, is not just being waged by oilmen from Texas and done with “shock-and-awe” in the era of preemption. Nor does it have anything to do with the billion-dollar contract awarded to the U.S. firm Halliburton for the reconstruction of postwar Iraq. This time, oil, or lack of it, is clogging the geostrategic pipeline between the world’s second largest oil producer (Russia) and second largest oil importing state (China) as they haggle over the future destination of Siberia’s vast oil reserves.
To be sure, the “oil politik” between Moscow and Beijing is far from a full-blown crisis. Indeed, China-Russia relations during the third quarter were marked by dynamic interactions and close coordination over multilateral issues of postwar Iraq, the Korean nuclear crisis, and institution building for the SCO (Shanghai Cooperation Organization).
Russia’s energy realpolitik, however, has led to such a psychological point that for the first time, a generally linear, decade-long emerging Russian-Chinese strategic partnership, or honeymoon, seems arrested and is being replaced by a routine, boring, or even jolting marriage of necessity in which quarrels and conflicts are part normal.
After a period of diplomatic limbo and uncertainty in July, China brokered the first round of six-party talks on the North Korean nuclear issue during this quarter. North Korea used the late August multilateral talks to rattle its nuclear saber and otherwise threaten the U.S. On the margins of the general meeting, North Korean diplomats met bilaterally with U.S. officials, but their discussion did not foster any apparent progress. The main achievement of the talks was a tentative, as yet unconfirmed, agreement to meet for a second negotiating round in the fall.
U.S. and South Korean military officials continued during the quarter to fine-tune the redeployment of U.S. troops away from the Demilitarized Zone (DMZ) and from Yongsan Army Base in downtown Seoul. The talks were characterized by mutual agreement on the redeployment plan and transfer of military missions to South Korea but differences over its timing. Finally, South Korea challenged the U.S. decision to impose high tariff penalties on Hynix Corporation for its export of semiconductor chips to the United States. South Korea will appeal the U.S. decision at the World Trade Organization (WTO) and attempt to reverse it.