U.S. Caught Flat-footed Once Again?

At the end of the 1980s, Japan was hailed as the world’s next superpower. Magazine covers portrayed the nation as an invincible dragon, the symbol of the coming “Asian century.” Best-selling novels and films offered frightening visions of America wilting in the glare of Japan’s “rising sun.”

Less than a decade later, after Japan endured an unprecedented period of stagnant growth, political gridlock, bureaucratic scandals and domestic terrorist attacks, the idea of Japan as superpower seems laughable. The same magazine covers that giddily proclaimed “Japan as No. 1” now depict the country’s sun setting into dark seas. Far from a confident dragon, Japan is just a puppy, albeit with a talent for making auto parts.

But cover illustrators may need a new metaphor. The puppy is starting to morph.

All but ignored, Japan’s economy is among the hottest in the world, growing 600% faster than in 1994. Its resurgence is paced by falling yen rates, still-unmatched technical and manufacturing prowess, and at least some resolution of the financial crisis caused by its wildly speculative ‘80s investment binge. If Japan’s expected triumph was vastly overstated, reports of its death were equally premature.

Indeed, America’s spectacularly inaccurate assessment of Japan, the world’s second-largest economy, raises troubling questions of whether the United States can comprehend, let alone cope with Asia in general. Unlike the nuanced treatment afforded Europe, Americans treat Asian issues as a stark choice between good and evil, a passion play among dragons and puppies, with almost nothing in between.

This startling myopia developed because, to a greater extent than most other regions, Asia historically shared few of the cultural experiences Americans often assume are common everywhere. In Japan, for instance, abortion has been an accepted birth-control method for centuries; most Asian countries harbor decidedly unfashionable gender, racial and nationalistic prejudices; many reject basic individual rights taken for granted in the United States.

All this posed problems after World War II, when mostly U.S. elites advocated extensive international economic and political ties to promote lasting peace. How could such links be forged with regions like Asia, which diverged so dramatically from mainstream Western values?

Some conservative economists constructed a theory that ingeniously evaded such difficult questions. As global commerce expanded, they reasoned, each country would inevitably adopt the same political and social values necessary for economic success. Those that didn’t would be punished by the market. In the long run, values, ideologies and prejudices simply wouldn’t matter.

As long as Asia remained weak, few questioned this “developmental” approach. But as Japan and other Asian “tigers” mounted spectacular economic successes, a growing number of observers began to worry about the consequences of still pervasive, if not expanding differences between U.S. and Asian societies.

Such concerns were ridiculed. Developmental economists steadfastly asserted that economic “science” guaranteed political and social convergence. Their dismissive attitudes incensed their critics who, in turn, redoubled their attacks. The result has been a never-ending passion play in place of more reasoned policy debate.

Fortunately, the consequences, so far, are limited to serious but not imminently critical matters like misunderstanding America’s chief economic competitor. The challenges posed by China--a potentially hostile nuclear power with a dismal human-rights record and an economic policy that bluntly extorts technology, supply contracts and domestic investment as the price for access to its market--considerably raises the stakes. The United States cannot afford to approach modern Asia with the same infantile perspectives that so grossly botched its views of Japan.

Yet, as this month’s congressional debate over renewing China’s most-favored-nation (MFN) trade status painfully demonstrates, not much has changed. Echoing years of Washington orthodoxy, economists and free-traders dismiss the thought of linking commerce with moral suasion, insisting that, over time, China is just a rambunctious puppy that will be tamed by the necessities of economic development. MFN opponents warn that China is a rapacious, unprincipled dragon, a Japan with slave labor. Blithely pursuing technology and trade relationships with a country that so openly flaunts basic norms will legitimate injustice and permanently harm fundamental U.S. interests.

As with Japan, neither approach satisfies. The persistence of “traditional,” non-Western values in Japan, and repressive rule in celebrated economies like Singapore’s, argues against inevitable value convergence through trade alone. MFN opponents starkly detail the ethical dilemmas of Chinese trade, but fail to address the real economic and security concerns that isolating China would create. Asian leaders cringe at the superficial tenor of U.S. deliberations, anxious that if the United States gets it wrong, their countries will be the first to pay.

To move beyond unpalatable alternatives, the United States needs to act on the basis of what its real Asian interests are, not to settle an increasingly irrelevant, but still influential argument. Surprisingly, there is no clear statement of U.S. goals in Asia. Yet, two objectives seem incontrovertible: assuring Asian peace and avoiding a war that would, without doubt, involve the United States, and sharing in the prosperity that Asian peace makes possible.

Asian security hinges on a continued U.S. military presence in the region, which moderates arms races and discourages aggressive unilateral behavior. Media-rich events like the annual China MFN review, however, are often seen in Asia as calling into question whether the United States wants to be in the region at all, a commitment that should be separately and unambiguously clarified.

Consistent with a regional security presence, U.S. Pacific assets should be adjusted to meet modern realities. Ground troops deployed during the Cold War should be recalled in favor of air and naval capabilities. Not only would this send a positive signal to China that the United States does not intend to engage in an Asian ground war, it solves such heated problems as closing the Okinawa Marine base in Japan, and reduces overall U.S. defense costs.

America’s next objective is to share in the prosperity it helped to create. To date, the United States has pursued a hodgepodge of “market opening” and trade initiatives throughout the region, generally, as the last U.S.-Japan trade summit illustrates, without success. It needs to insist on much clearer priorities.

One priority is the widespread Asian practice of forcing U.S. companies to transfer billions of dollars of military and commercial technology, and contracts from U.S. suppliers, before nameplate firms like Boeing or TRW can sell their products. Strangely enough, some U.S. initiatives, including former Commerce Secretary Ronald H. Brown’s infamous 1994 “let’s make a deal” Chinese trade mission, actually encouraged “offset” transactions. Instead, the United States must insist on normative agreements that preclude such obviously unacceptable practices before conceding economic benefits to any country.

For far too long, U.S. Asian strategy has been distorted by particularly limited, if not bizarre perspectives all too evident in the ongoing MFN spectacle. As long as the United States persists in such one-dimensional thinking, its policies will be no better informed than its gyrating, inaccurate views of the Japanese economy. The time has long since passed when America could afford such indulgence.