The most remarkable thing about Japanese Prime Minister Shinzo Abe’s South Korea visit tomorrow (Friday) is how close it came to not happening.
Up until two weeks ago, Abe planned to boycott the Pyeongchang Winter Olympics amid a dispute over wartime sex slaves forced to work in Japan’s military brothels. Abe is miffed that President Moon Jae-in distanced himself from an unpopular 2015 agreement, pledged by Moon’s predecessor, to bury the touchy issue. Thankfully, Abe thought the better of it and decided to joined the festivities.
Yet his balancing act in Pyeongchang will require a medal-worthy performance as he attempts to engage Moon’s government without enraging Donald Trump. The US leader is livid that Moon invited North Korea to the Games, and has sent Vice President Mike Pence to amplify the point. Along with talk of harsher sanctions to come, Pence is showing up with Fred Warmbier, the father of a 21-year-old college student who died shortly after his release from a North Korean prison, to dull Pyongyang’s charm offensive. Trump reportedly urged Abe to attend tonight’s Opening Ceremony to stand shoulder-to-shoulder in defiance with Pence.
Here is something else that may spoil the mood: Abe plans to broach the sex-slave controversy and also urge Seoul to tighten the screws on Kim Jong-un’s regime up North. Tokyo is no happier than Trump’s team about Moon’s efforts to woo the North or welcome Pyongyang’s head of state Kim Yong-nam and Kim Jong-un’s sister to his “peace Games.”
There’s a better way for Abe to use his time with Moon, though: focus on economic cooperation, not on issues on which Tokyo and Seoul chronically diverge. Abe can forget major progress on World War II tensions or North Korea’s missiles. That won’t happen with his bromantic partner in the White House agitating for military action.
Abe is taking risks showing up in Pyeongchang. Several lawmakers from his ruling Liberal Democratic Party, and right-wingers, have been critical of the visit. Political sensitivities are already flaring over the unified flag under which South and North Korean athletes will march. Tokyo claims the flag includes disputed islets – an affront to Japanese nationalists.
The payoff could be big, though, if Abe can compartmentalize economics away from political landmines. Why not agree to renew talks on a broader currency-swap arrangement? Given recent volatility in stocks and currencies, precipitated by a sliding dollar, Seoul and Tokyo could use some joint financial security. Abe should also prod Moon to join the 11 remaining members of the Trans-Pacific Partnership, on which Trump has reneged.
The payoff could be big if Abe can compartmentalize economics away from political landmines. Why not agree to renew talks on a broader currency-swap arrangement? Abe should also prod Moon to join the 11 remaining members of the Trans-Pacific Partnership
This will require some finessing. Abe is Trump’s only real ally on the world stage, and risks becoming an @realDonaldTrump rant target if he befriends a South Korea cozying up to the North. Trump, meantime, has teased a return to TPP (don’t hold your breath).
Irking Trump could result in significant trouble for both Abe and Moon. As scandals surround his White House and indictments fly, Trump is desperate to alter the narrative – and the headlines. A military strike on Kim’s regime, the “bloody nose” option, is a decidedly risky enterprise. That leaves a trade war, pledges of which garnered great applause on the campaign trail.
The battle arguably began in earnest on January 22, when Trump’s team slapped 30% tariffs on imported solar panels and washing machines. While the step was aimed at China, Moon’s economy will suffer some collateral damage. Abe’s, too, as Washington’s mercantilist turn drives down the dollar versus the yen and other Asian currencies.
Until now, Abe has bet that warm personal ties will keep Japan out of Trump’s line of fire. Given Trump’s legal woes and unpredictability, Abe should look for hedging options. Moon may be in a cooperative mood given his own Trump troubles, not least the White House demanding a renegotiation of a Korea-US trade deal launched in 2012. Moon’s economy also has its share of China problems. Tensions over Seoul welcoming US missile-defense systems slammed Korea’s tourism business and Hyundai’s mainland China auto sales, as well as shuttering Lotte stores in the PRC.
Just as TPP would disrupt Japan’s rigid and uncompetitive industries, it would also shake up Korea Inc.’s family conglomerate-dominated system, and for the better.
Abe and Moon should make Friday’s chat more than a hollow photo-op. With a bit of foresight and a touch of political courage, Asia’s No. 2 and No. 4 economies might remember Pyeongchang as the moment they trumped history and scored a win for the future.