Time to Redefine the U.S.-Japan Relationship : Diplomacy: When Clinton meets Miyazawa, there must be no more business-as-usual. Instead, shared responsibilities should be just that.

It won’t be a three-ring media circus like the recent Vancouver summit, but President Bill Clinton’s meeting on Friday with Japanese Prime Minister Kiichi Miyazawa will be a far more defining event with a more important partner than Russia and a still larger challenge: crafting a new, mature U.S.-Japan relationship that makes sense in the post-Cold War world.

The old logic of the U.S.-Japan relationship is obsolete. Japan can no longer play the passive, self-serving, junior partner; nor can Washington soft-pedal economic issues for geopolitical reasons and settle for half-a-loaf trade concessions. The anomaly of the world’s largest debtor serving as security guarantor for the world’s largest creditor cannot endure. And how can we renew an open, global trade system, upon which global growth depends, when the second-largest economy pursues predatory trade policies, runs $125-billion surpluses with its major trading partners (a $49-billion surplus with the United States in 1992) and hides under the table instead of asserting leadership in the General Agreement on Tariffs and Trade talks?

Indeed, if anything, the logic of the U.S.-Japan alliance has shifted 180 degrees. Now it is Tokyo, not Washington, that is preoccupied with security issues. Japan lives in a rough neighborhood surrounded by a turbulent Russia, a nuclear China and the prospect of a reunified Korea armed with missiles and perhaps nuclear weapons. Meanwhile, for the United States, it is market share, not missile throw-weight that is now of paramount importance.

Yet, if past is prologue, Miyazawa, playing junior partner, will come bearing omiyage (gifts)--this time a stimulus package and other economic goodies likely to be less than they appear--and propose yet another commission to study U.S.-Japan relations. Clinton will read his talking points stressing Japan’s importance and urging Tokyo to open its markets. Washington will have to apply qaiatsu (foreign pressure), with both sides coming away publicly pleased but privately apprehensive.

But such business-as-usual will not do. It would be a prescription for the gradual attrition of the U.S.-Japan relationship, to the detriment of the entire world system.

The United States and Japan account for almost 40% of the world’s gross national product, almost half of the world’s foreign aid, a similar proportion of global banking assets and hundreds of corporate links. Acting in concert, Washington and Tokyo can be a major political, defense and financial force for shaping the emerging new world system. Our economies are so intertwined (as are our security interests) that separation would mean mutual assured destruction.

But Japan is also our leading competitor. If Tokyo wants to be a major global player, it must shoulder responsibilities befitting the world’s No. 2 economy. Japan cannot shed crocodile tears and resist opening its rice markets, or tell U.S. ranchers that Japanese intestines are different, so they can’t eat American beef--ploys it has used.

Both we and Japan have no alternative but to find a new equilibrium. Economic competitors can be political partners--as long as the competition is fair. There is a solid basis for a mature, U.S.-Japan partnership, but it requires major changes on both sides.

Our bilateral security alliance provides a nuclear umbrella. U.S. forces in Japan both guarantee its defense and the U.S. ability to play its critical regional balancing role. They also send a calming message to the region that an emerging Japan--whose $33-billion defense budget is the world’s third largest--is not acting alone.

Japan’s global political interests and ours are largely congruent: desire for stability, market-oriented growth, an open-trade system, curbing proliferation of weapons of mass destruction, encouraging democratic trends, preserving the environment. And Japan wants to use the U.S. leadership role to help legitimize its own ambitions--for example, in seeking a seat on the U.N. Security Council.

Political and scientific/technological cooperation with Japan is also key to achieving U.S. policy goals--from aid to Russia to preserving rain forests, fostering Third World development to building the space station.

In addition, U.S. financial and consumer markets and technology are vital to Japan. While Japan has diversified its export markets, America remains key. And Japan is already one of our most important markets, importing some $50 billion in goods a year.

In the political and security areas, the substance of the relationship largely reflects a sharing of responsibilities. But the way these responsibilities are shared is destroying the relationship. Usually, Washington will make a policy decision, then consult and prod a reactive Tokyo into supporting it. The Gulf War was the most dramatic example. This builds popular resentment here and in Japan, rather than building support for what are shared goals. Japan must take more initiative because it is acting in its national interests, not because of U.S. pressure.

If the concept of “global partnership” is to be more than hollow rhetoric, it cannot mean Washington decides, and Tokyo pays for it. It requires shared decision-making and genuine consultation--something Washington must adjust to. A mature partnership also means accepting tactical differences--for example, on how to promote human rights or normalizing ties to Vietnam. It also requires that Washington prioritize what it wants from Japan, rather than responding to the loudest special interest.

This is particularly important in regard to the third pillar of the relationship--economics. At the core of a new bargain must be a Japanese commitment to reciprocity. Japanese barriers to U.S. business are largely informal, but structural. Toys R Us, for example, is enjoying great success in Japan--but only after U.S. pressure forced Tokyo to alter its distribution system. More balanced economic relations would require Japan to:

- Foster domestic-led growth through a stimulus package.

- Remove structural barriers to U.S. imports in areas where competitive U.S. industries would gain (as has been done in semiconductors), particularly in financial services.

- Remove obstacles to U.S. direct investment. All evidence suggests a direct relation between investment levels and exports. Japan’s level of foreign direct investment is 20 times less than the United States, six times less than Germany. Both Washington and Tokyo must take symmetrical steps to provide incentives for U.S. firms to open export-related marketing centers, service centers and other corporate on-the-ground presence.

Measurable progress in these areas will take time, and run into domestic political difficulty among Japan’s competing bureaucratic fiefdoms and gridlocked, scandal-ridden political system. On the U.S. side, it will require patience and clarity of purpose.

Continuing business-as-usual will only result in a gradual distancing--and it will end not with a bang but a whimper. Such failure to reshape U.S.-Japan relations will mean greater political turbulence in Asia, and slower global growth affecting all of us.