Trump Asia

Trump's Trip to Asia

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From November 3 to November 13, President Donald Trump will visit several Asian countries, including China, Japan, and South Korea. During this conference call, speakers discuss of the implications and possible outcomes of the president’s tour of Asia.

Speakers

Elizabeth C. Economy

C.V. Starr Senior Fellow and Director for Asia Studies, Council on Foreign Relations

Sheila A. Smith

Senior Fellow for Japan Studies, Council on Foreign Relations

Scott A. Snyder

Senior Fellow for Korea Studies and Director of the Program on U.S.-Korea Policy, Council on Foreign Relations

Presider

Robert McMahon

Managing Editor, CFR Editorial, Council on Foreign Relations

MCMAHON: Welcome, everyone, to today’s Council on Foreign Relations conference call on President Donald Trump’s trip to Asia with Elizabeth Economy, Sheila Smith, and Scott Snyder. I’m Bob McMahon, managing editor of CFR Editorial, and I’ll be presiding over the discussion today. And I’d like to remind the members that this conference call is on the record.

We’re going to kick off with about 15 or so minutes of conversation, sort of following the trip chronology. And we are really fortunate to have a strong lineup of CFR experts to serve as our guide.

So Sheila Smith, talking about Japan, is CFR’s Senior Fellow for Japan Studies. And she’ll be discussing the start of the president’s trip.

Scott Snyder, the Senior Fellow for Korea Studies and director of CFR’s program on U.S.-Korea policy, is going to assess the next leg in South Korea.

And Elizabeth Economy, the C.V. Starr Senior Fellow and director for Asia Studies at CFR, is going to set the scene for the U.S.-China summit that follows that.

All, by the way, are contributors to CFR’s superb blog on Asia, Asia Unbound.

So, Sheila, starting with you, the president will be coming to Japan after, I believe, starting first in Hawaii. North Korea is looming as the dominant issue. And Japan is just coming off an election where Shinzo Abe, the prime minister, won a pretty resounding vote of confidence.

Can you talk about what is the most significant aspect of this part of the Trump trip?

SMITH: Sure, Bob. I’d be happy to.

So, first, you know, this is going to be the most comfortable stop, I think, for President Trump. He and Shinzo Abe, as you know, have developed a pretty close relationship. They talk on the phone regularly about North Korea. But also, you know, Prime Minister Abe has been very determined to continue to make sure that he is in close step with the president as he develops his Asia policy.

So the trip is going to start off with golf. This is what they did in Florida, at Mar-a-Lago, last February. There’s another 27 holes ahead of them when the president lands at Yokota Air Force Base. And then that’s going to be followed by an informal dinner.

Then Monday is the working day, and there’s the bilateral summit with the prime minister. And I expect to hear, first and foremost, as you said, a very strong reiteration of the closeness of U.S.-Japan cooperation on North Korea.

I also expect we’ll hear a little bit about a broader U.S.-Japan alliance agenda in the Indo-Pacific, which has become the language now, to frame the maritime cooperation between the United States and multiple partners in the region. He’s going to—the president will meet with some of the families of Japan’s abductees, the citizens that were abducted by North Korea.

There is also a meeting with the Japanese emperor. And you may recall, when President Obama first went to Japan, there was that photograph of the president bowing to the emperor. That drew some controversy here in the United States. But—so there will be some photo ops, I think, there of the president and the Japanese emperor.

So that’s what’s on the agenda. There’ll be lots of moments, I think, where we will be holding our breath just a little bit. But the prime minister is very well positioned now to move the conversation on U.S.-Japan military cooperation forward with President Trump.

MCMAHON: Great. Thanks, Sheila.

Scott, at last report President Trump will not visit the demilitarized zone in Korea, which may ratchet down some anxiety. But could you give us a sense of what is the environment that President Trump will be entering when he comes to South Korea after the Japan trip?

SNYDER: Sure. Well, you know, this is a state visit. And so the South Koreans are rolling out the red carpet for President Trump. I think it’s an atmosphere of anxiety and some measure of tension. But the anxiety is going to be revolving primarily around how the meetings go and whether or not the South Koreans hear the messages that they want to hear from President Trump.

And I think that what they want to hear and what the White House has signaled that it wants to deliver are messages of assurance to South Korea about the alliance and resolve against the North Korean threat.

The real kind of potential flashpoint is that South Koreans also want to know that the United States is not going to prematurely or unnecessarily draw South Korea into any kind of military conflict. And so the issue of, you know, how loud to ramp up the messages on North Korea will be there.

Part of the visit also involves a visit to Camp Humphreys, which is a new base in South Korea that has been built for the United States, primarily with South Korean money. So it’s a good demonstration of burden-sharing in the alliance relationship. And even if he doesn’t go to the DMZ, I hope that he is able to take a helicopter tour close to the DMZ so he can get a sense of the proximity of the city of Seoul to the demilitarized zone and see the graphic difference between South and North Korea from the air.

MCMAHON: Thank you, Scott.

So, Liz, rounding up the first three stops is China. He will be coming from two U.S. allies to China and a big meeting with Xi Jinping. Can you give us a sense of what is at stake in this meeting and maybe what’s the most important outcome for—from the U.S. perspective?

ECONOMY: Sure. I think, you know, at the top of the agenda, at some level, is simply to have a meeting that has positive optics. President Trump has fairly actively pursued a personal relationship with President Xi Jinping. And although I think the affection has been largely one-sided, I think in this case that Xi Jinping will also make a real effort to roll out the red carpet and to make President Trump look good, not only because that type of homage is important to our president, but also because I think it will help the Chinese to distract the president a bit from his unhappiness, both in terms of the efforts that China has made to date in terms of pressuring North Korea, and certainly the steps it has taken on the trade front.

I think everything about this visit is arranged to minimize the potential for the president to go off script. There is no speech. President Trump is not going to be giving a speech anywhere in China, and there’s no press conference with questions; just a joint press statement.

I think, substantively, certainly I think North Korea is top of the agenda, and trade is, you know, right after that; you know, better Chinese enforcement of North Korea sanctions that are already in place. I think the administration would love to see China commit to turning the spigot off for its oil supply to North Korea. I don’t think that’s going to happen.

And then one term that’s been floating around a lot is unilateral action, that the administration is looking for China to take some action, some action of significance on its own accord, that would signal to North Korea that China is simply not going along for the ride in terms of sanctions, but that it itself will not tolerate a nuclear North Korea.

So I think probably North Korea is the number one priority, but optics are actually really important for this visit too.

MCMAHON: And Liz, as a follow-up to you, this visit is coming not too long after the China Party Congress. Can you discuss how the outcome of that congress, and certainly the standing of Xi, might affect the meeting between Xi and Trump?

ECONOMY: I think, you know, on the face of it, you know, the two presidents, sort of their relative standing couldn’t be more different. You know, President Donald Trump, his approval ratings are quite low, somewhere between 33 to 38 percent, while his former advisers and family members are being investigated for various doings with the Russians.

You know, Xi Jinping, as I think you’re suggesting, you know, just finished the 19th Party Congress; managed to have Xi Jinping thought enshrined in the constitution, basically putting him on a level equivalent to Mao Zedong. And he has a path for him to continue for a third term as general secretary, because he didn’t signal a successor for 2022.

But I also think, behind the scenes, he is not quite as strong as, you know, we tend to paint him. So, you know, his economy is growing, but not necessarily in the way that he wants it to grow, right. It’s been growing through commodities and property and exports, not through services and consumption. There’s been very little to no structural economic reform. He, you know, has had to arrest someone who had been a potential successor to him just, you know, a month or so before the Party Congress, you know, on the grounds that he was corrupt and there was a potential coup attempt.

So I think there’s a lot going on in China that—behind the scenes that suggests that, while President Xi has amassed enormous institutional power, that there are some pretty significant pockets of discontent; that he faces a number of significant, you know, environmental and economic challenges. So the difference between the two leaders as they sit down in Zhongnanhai may not be quite as great as we would assume it to be.

MCMAHON: Liz, one more on the Xi-Trump relationship. You noted in a recent blog post how Trump had regarded Xi, especially following the Mar-a-Lago summit earlier in the year and, you know, the almost gushing comments about Xi’s leadership and so forth. And yet, it seems to be a bit unrequited. What do we know about this relationship at this point and what should we be looking for in this summit?

ECONOMY: I think, you know, President Trump has found a way to separate what seems to be a real admiration for President Xi Jinping from his real unhappiness with Chinese policy, he distinguishes between the two. And I think at this meeting it will be interesting to see, you know, whether the policy and the personality somehow get joined, you know, whether President Xi actually delivers on some of the things that President Trump is going to press him on. I think this is the rubber meets the road at this moment.

And I know that there’s some concern in Washington about the failure of the new comprehensive economic dialogue that was announced in Mar-a-Lago to actually deliver on anything. And, you know, I think, you know, President Trump has set this up very much as a relationship between him and President Xi Jinping, but if Xi Jinping can’t deliver anything significant, then I think maybe the bloom goes off the rose a little bit.

MCMAHON: Thanks, Liz.

Sheila, Liz had talked about it, referenced the domestic situation facing President Trump. And I wanted to ask you and then Scott a little bit about how that may or may not influence the way this trip comes off in both Japan and in South Korea. Is he—is the president impaired going to Japan facing this environment in which three of his former campaign officials face charges related to misdeeds and so forth?

SMITH: So I think it’s, you know, certainly it’s been discussed across the Japanese media, so certainly the Japanese are paying very close attention to what’s happening here in the United States. And in large part, of course, they’re going to want the United States president to be strong and able to concentrate on what’s happening in the region. And so anything that takes away from the strength of the U.S. president, and for especially one like President Trump who has embraced the U.S.-Japan alliance so firmly, right, they’re going to be a little bit anxious about his future.

I don’t know that this is going to play into any specific aspect of the trip, but I think you’ll have the media, you know, the media in Japan and then I suspect in South Korea, too, as not controllable as perhaps the Chinese side. You’re going to have a fairly contained press conference after the two leaders meet, but you’re still going to have access for the Japanese press to the president. And I expect that there will be a question about what’s happening back in Washington.

I think there’s also some fault lines that are not specific to our politics, but they are specific to how this president wants to pursue his policies in Asia. Prime Minister Abe has worked very hard to make sure that Japan’s interests are reflected in the president’s statements early on. And so you saw an extension of Article 5 protections on the Senkaku Islands in the East China Sea in the very first summit.

So contrary to NATO, for example, the U.S.-Japan alliance has been very forward leaning early on in terms of presidential statements and secretary of defense statements on how firm the U.S. commitment is to its allies in Asia. And Abe will want to make sure that the Japanese people hear that again on their own territory. So I think there will be a lot of focus on the very specific needs of the Japanese at this time.

The only last fault line, I would say, here in Tokyo is on the trade issue. Vice President Pence and Deputy Prime Minister Aso met in Washington several weeks ago I think largely to keep it off of the agenda of the Trump visit. But there is some concern that the trade issue is going to blow up this good relationship that Prime Minister Abe has cultivated with the president, and a lot of anxiety inside Japan about really what is it that the Trump administration wants to pursue, especially after the withdrawal from TPP. So you could see a little bit of press attention to the president’s perceptions of the trade relationship with Japan.

MCMAHON: And when you say the trade issue, you’re talking about this issue of the Trump administration continues to hit hard on the issue of trade imbalances and the U.S. deficit vis-à-vis its bilateral partners. Is that sort of the centerpiece of it?

SMITH: Yeah. So you saw in the first summit, again, when Abe came to Washington in February, the prime minister came primed with let’s talk about our economic partnership broadly. And so he said, you know, he wanted to talk about TPP, but he understood that the president had made his decision. Nonetheless, he wanted the, you know, United States to become—continue to be embedded economically in the region and trade dialogues of the region.

But he also brought out why Japan is good for the American economy. So he talked about foreign direct—Japanese foreign direct investment here in the United States. He talked about Japan’s willingness to support and supplement the Trump administration’s infrastructure plan whenever that came to fruition.

So I think what the prime minister is trying to do is to define the economic partnership more broadly than just trade and especially, you know, the narrow interpretation of trade being just the deficit number, right, and is trying to impress upon the president the importance of the larger structural organization of Japanese investment, of Japanese trade relationships that also affect NAFTA, for example.

And so the prime minister has been very, in private, been very forthright with President Trump about how complex Japanese attitudes are towards his stated goal of, you know, renegotiating trade agreements. Japan doesn’t have a trade agreement with the United States to renegotiate, but NAFTA, KORUS, all of these have something to say about the global network of production and the way in which the Japanese companies operate here in the United States.

MCMAHON: Thanks, Sheila.

So I’ll use the reference to the KORUS, the Korean-U.S. trade agreement, to pivot to Scott and ask him about not only the security aspects of this trip, but the economic ones and to what extent the South Koreans are kind of bracing for both of those to be dealt with in President Trump’s first visit to Seoul.

SNYDER: Yeah. Well, I think that actually I neglected in my initial comments to mention that President Trump’s major speech in Seoul is going to be to the National Assembly. And so that is actually a venue where whatever President Trump might say might have a direct impact on South Korean domestic politics. And it’s a pretty divided domestic political environment in South Korea with a new, progressive administration in power, and they’re going to be looking very closely at the extent to which Moon and Trump align with each other on security issues. In fact, frankly, any point of potential disagreement is probably going to be magnified in the South Korean media.

And on the economic issues, KORUS clearly has been called out as an issue by President Trump. And I think that the South Koreans are feeling a lot of pressure to try to narrow the deficit that the U.S. faces with South Korea in various forms.

The two governments have agreed already to pursue a negotiation to revise the agreement, that just happened early last month, and so, you know, like with Japan, I think the South Koreans have tried to insulate the economic issues from direct discussion during this particular visit. But he’ll be under a microscope.

And specifically, I think that with his National Assembly speech, the issue of the rising calls in South Korea for the reintroduction of tactical nuclear weapons is an important issue in South Korean domestic politics that President Trump, you know, might be able to address. And then also, the broader background issue of the orientation of Korea vis-à-vis the U.S. and China, especially with the evident South Korea-China rapprochement that seems to be developing this week, and will be followed on further in coming weeks with the anticipation of a meeting between the South Korean and Chinese leaders, could become a focal point as well.

MCMAHON: Great. Thank you, Scott.

At this time on the call, I’d like to invite members to join our conversation with their questions.

And a reminder this conference call is on the record. And as you get prepared to ask questions, please limit yourself to one question and keep it concise to allow as many of the members on the call to speak. There’s a lot of people on this call at the moment.

I wanted to—as you consider your questions, I wanted to just come back to Liz on the China question and talk about how China figures in the broader aspects of this trip. This is a trip not just to these three countries, actually, but it’s—there’s other regional summitry involved. The U.S. president will be meeting with lots of other regional leaders. The South China Sea issue will come up. To what extent is this—how important is this trip for—to establish a U.S. presence or reestablish what had been the big idea of the Obama administration, which was the rebalance to Asia?

I’m sorry, this is directed to Liz. Liz, are you there?

ECONOMY: Sorry, I am here. Sorry about that.

Yeah, I was going to say one of the interesting things is that, you know, for people who follow China, we become all consumed with the U.S.-China bilateral relationship and tend to think that nothing else sort of matters and everything sort of flows out of that. But one of the interesting things about the structure of this trip is that China is just one stop among five countries, and it’s in the middle of the trip. And the trip is going to be punctuated toward the end by a speech in Vietnam that I think is likely to reassert U.S. commitment to its allies and its partners in the region. and probably put out pretty strongly, you know, a statement advocating free trade and freedom of navigation, perhaps even broader political freedoms much along the lines of the Obama rebalance.

So I think we’ve seen in this administration, you know, two very different narratives emerge: the sort of America first narrative of President Trump and some of his top advisers, and then the Secretary Mattis and McMaster and, you know, Vice President Pence and Tillerson out there really speaking a language that is very reminiscent of President Obama’s rebalance. And so I think in the speech in Vietnam we may see an effort to reconcile those two, and I think largely in favor of a kind of rebalance and recommitment to the region.

MCMAHON: Thanks, Liz.

So at this time I’d like to see, Operator, if we have questions for our experts on the Trump trip.

OPERATOR: Thank you very much.

Our first question will come from John Hudson, BuzzFeed News.

Q: I’m interested on your perspective of how that—the Vietnam APEC speech is going to go. As you said, you said, like, the White House has previewed this as something that’s going to support, you know, a rules-based economic system. But if you were—if you’re some of these Asian countries that are showing up and you’re not necessarily an ally of the United States, how do you view the Trump administration on whether or not to engage in a bilateral trade agreement? Do you trust the Trump administration?

MCMAHON: Liz, do you want to take this?

ECONOMY: Well—(chuckles)—sure.

I mean, I’m not sure how far the United States is going to get in many efforts at bilateral trade agreements, particularly as, you know, Scott was pointing out, you know, we’re talking about, you know, renegotiating, you know, or pulling out of KORUS. And, you know, we pulled out of TPP, and I’m not sure how much progress really the administration is going to be able to make.

I think there is some hope among the remaining members of the TPP that at some point perhaps the U.S., you know, through, you know, working with Japan or with Australia somehow is going to find its way back into a broader multilateral trade agreement. But I think, in all honestly, I don’t see much hope for many new bilateral trade agreements to be negotiated at this point.

Q: And just to follow up, does it make any sense to be promoting, you know, a rules-based system and, you know, respect for, you know, smaller nation-states? But wasn’t that exactly what TPP was designed to promote?

ECONOMY: Indeed, indeed. I think the idea would be that it will still be rules-based and promote, you know, free trade, but that some of the concessions that the United States made in the TPP would, you know, not find their way into any sort of new bilateral agreement, that somehow the Obama administration did not do a good enough job of protecting U.S. economic interests in TPP. But the U.S. is very much willing to negotiate with countries on the basis of the U.S. adequately protecting its own economic interests.

But I would welcome Scott and Sheila to jump in at this, too, because both of your countries, you know, are critical on the trade front.

SMITH: So I’m happy to suggest a couple of things about the Japan, you know, example is clearly the Japanese are—and Prime Minister Abe personally were distressed to say the least about the U.S. withdrawal from TPP. Japan had put an awful lot of investment into the TPP itself, but also the U.S. and Japan, instead of, you know, looking at each other and tangling over trade, were really standing side by side in the pursuit of this new normative—you know, the new standards, higher standards trade agreement that they both strongly believed in. So in the context of TPP, the market access issues, which are the tricky ones, politically, at home, could be subsumed in some way. The politics of that could be subsumed some way to this broader vision for the region. And binding the United States and Japan together in this, you know, forward-looking arrangement for trade liberalization in the Asia-Pacific was a strategic goal for Japan, in addition to an economic benefit to Japan. So I think the prime minister has continued—and you can hear stories of the meetings and the conversations, the personal meetings with President Trump, to say why this is a good idea. He’s continued to advocate for it. But Japan has also moved to—along with Australia and others—to, you know, pursue a TPP 11, a TPP without the United States. It may be TPP 10 now. I don’t know where New Zealand stands on this at the moment. But Abe has not given up on TPP as one of the options for the future of trade.

He's also reached out to the European Union and to initiate a conversation with European friends and partners on trade liberalization, which has never been able to be brought to fruition in the past, but that President Trump’s stand on trade really shook our European and Japanese allies into thinking that maybe the United States was retreating from trade liberalization and they needed to step up more. So I think you see, at least in the Japan case, a strong advocacy for continuing to push forward with trade liberalization with or without the United States—preferably with, but without if necessary.

MCMAHON: Thanks, Sheila.

Scott, do you want to add anything before we—

SNYDER: Yeah, I’ll just add one thing. I mean, you know, it used to be that KORUS, the Korea-U.S. Free Trade Agreement, was kind of viewed as the template for a broader regionalized rules-based trade regime. And, you know, based on what is happening in terms of the administration’s approach to KORUS, you know, really emphasizing fairness and defining that specifically in terms of bilateral balance, you know, that is not a message that I think the Koreans are really accepting very well, even though they’re going along with negotiated revisions to KORUS. And I think that that broader message of focusing on fairness probably also reverberates in a complicated way for those countries in Southeast Asia who might have expected a different sort of direction.

MCMAHON: Thanks, Scott.

And I would note we have a CFR colleague, our distinguished fellow Michael Froman, the former U.S. trade rep who negotiated the Trans-Pacific Partnership.

Operator, is there another question, please?

OPERATOR: Yes, thank you.

(Gives queuing instructions.)

Our next question will come from Patrick Jenevein, Tang Energy Group.

Q: Thank you.

President Trump’s administration may or may not have fully assessed Xi’s One Belt, One Road campaign. So I’m wondering if Xi’s OBOR, or One Belt, One Road drain on the PRC treasury might reflect a desperate attempt to dynastisize the Communist Party.

ECONOMY: So I think—sure. The Belt and Road Initiative is—maybe I wouldn’t call it desperate so much as a long-term strategic vision in which Xi Jinping has said, in essence, we are willing to make some short-term economic sacrifices, you know, potentially by, you know, building up a port in Sri Lanka that’s maybe not going to make money for a while, or they’re taking a number of other sort of initially money-losing infrastructure projects for a longer-term strategic gain.

And I think it is, you know, very much part of the Chinese dream, the great rejuvenation of the Chinese nation. There’s also a significant component of Belt and Road that is focused on domestic economic development. So about a third of the projects for the Belt and Road Initiative are going to be within China, and so it’s an effort to develop the less-developed regions of China, and to connect all the way through. And I think what you’re finding is, you know, on the one hand, you know, there are certainly some companies that are not excited by this, Chinese companies. There are a number of scholars and analysts who say that, you know, this doesn’t make any sense; we’re pouring, you know, good money after bad money into some of these projects. But there are others who say, you know what, it’s true that, you know, Laos has very little, you know, connectivity right now.

But this is a 30-year play. And, you know, in 30 years we’re going to look up and find that, you know, Chinese companies have laid the fiber-optic cable, they’ve—you know, they have a satellite system in place, they are completely dominating in e-commerce, right, because there’s a digital Belt and Road now. And so I think that’s what Xi Jinping is banking on here, quite literally, is that, you know, it may not appear to be the smartest thing in five years—although it has gotten them a lot of positive press. But 30 years or 40 years out, China’s going to dominate.

MCMAHON: Great. Thanks, Liz. Thanks for that question. Operator, do we have another question, please?

OPERATOR: Yes. Our next question will come from Rodney Nichols, independent science consultant.

Q: (Off mic)—and concerns ballistic missile defense. If negotiations with North Korea don’t seem to work, and if military strikes are off the table, you’re left with deterrence. And I wonder what the panelists think about the role of ballistic missile defense coming up in the course of the president’s trip.

MCMAHON: Thank you. Scott, why don’t you kick off with that one?

SNYDER: Yeah. Well, I guess the first thing I would say is that it’s not clear that either negotiations or military options are off the table. I think the administration is, you know, looking at all the available options. But clearly, on defense and deterrence, missile defense is likely to be totally—could be touched on in Japan. And in South Korea you have the THAAD defense system that’s now in place. And although the South Korean government appears to have recently given Chinese assurances that there would not be an expansion of the role of a cooperative missile defense network on the peninsula, I think that there may be additional round of discussions on that between the U.S. and South Korea.

MCMAHON: Thank you, Scott. Operator—

SMITH: I could say a couple things about Japan? Do you want—do you want me to talk—

MCMAHON: Yes.

SMITH: It will definitely be on—at least in the public eye. It’s already been on the table in the U.S.-Japan alliance, right? The two missiles that went over, through Japanese airspace in July have accelerated what was already in progress in the U.S.-Japan conversation on missile defenses. The Japanese will be upgrading their missile defenses from, you know, what they have now, which is the Patriot III system on the ground. You know, it basically covers a point defense or the ministry of defense, prime minister’s office, a base—that kind of defenses. And they also have the sea-based Aegis system on the Aegis destroyers. That is insufficient to deal with the level of missile threat that currently—that the North Koreans can pose.

So they will be upgrading to what—there was at least a nominal consideration of THAAD, which is the system that was deployed in South Korea. But there was also the Aegis ashore version of that. And I think the Japanese are going to go with the latter because they’re familiar with it and for cost reasons as well. So I think that is certainly going to be on the table. Whether it’s announced formally as a decision when the president visits or not, I don’t know.

The other piece is not a missile defense piece so much, but it is a response to missile threat. And that Abe’s party, the liberal democrats, the conservative party, their defense committee has proposed the acquisition of conventional strike capability by Japan. Now, the prime minister and his Cabinet has not endorsed this or put this forward yet as a formal proposition for the Japanese. But it is being discussed. And of course, it’s being discussed, first and foremost, with the United States, because the U.S. would have to agree to providing missile technology, if it’s a missile. The Japanese seem to be focused on Tomahawks and cruise missiles, but that conversation is probably going to be ongoing over the course of the next year. So missiles defenses and the overall kind of military capabilities needed to respond to the North Korean missile threat I think are going to definitely be on the table for the Abe-Trump summit.

MCMAHON: Thanks, Shelia.

And this just a quick reminder, this is a CFR on the record conference call on President Donald Trump’s trip to Asia. And we’re speaking to Liz Economy, Shelia Smith, and Scott Snyder. And I would ask everyone to please keep their questions to one. We have a lot of people on the call and there’s a number of questions lining up.

Operator, could we have the next question, please?

OPERATOR: Thank you, yes. Our next question will come from Trudy Rubin, PA Inquirer.

Q: Thanks very much to all of you.

I wonder if you think that Trump’s expectations for something on North—something more on North Korea coming out of this trip are misplaced, whether that is likely to be obvious or whether there will be some kind of show. And if he comes out of this without any further strong Chinese commitments, whether that’s going to lead to real tensions in the coming year.

MCMAHON: Thanks, Trudy. So, Liz, I’ll start with you. This plays off of some of your comments initially on China’s position vis-à-vis North Korea.

Hello? Hi, Liz, are you there?

ECONOMY: I’m sorry. I’m sorry. Yes, I am. I am. I’m sorry. My thing on was on mute.

I think the president can point already to a significant ratcheting up of Chinese participation in sanctions over the course of the past, you know, 10 months or so. But, yes, he definitely wants more. And I think he’d like something to walk away with from this particular meeting. I think I particular he’d like something more on the oil front, and perhaps on banking and finance. You know, if he doesn’t get something, there’s not going to be a grand bargain. If he doesn’t get anything, will he be disappointed? Yes. Will it lead to greater tensions? I think it will lead to what we’ve seen, you know, thus far, which is going to be, you know, a kind of, you know, continued, you know, Twitter sort of diplomacy attack on the Chinese not doing enough. I think there will be, again, more, you know, efforts to bring pressure on the Chinese simply to do more and to stand up and take greater actions. And, you know, I think the administration will continue to, you know, threaten that it’s going to take military action, and hope that at some level that persuades the Chinese to do something.

I also think at this point there is, you know, an opportunity to take advantage of or to leverage the dissent within China over the Chinese stance, because we’ve seen now—I think really beginning, you know, over five years an increasing number of Chinese analysts, scholars, I think people, some in the foreign ministry, that would like China to take a tougher stance. And even some calls from the broader populace, right, that don’t see North Korea as worth defending. And so I think there is—there is discussion and debate within China that also, you know, might play into—in the Chinese decision to continue to ratchet up the level of tensions. But I would note that they have come a long way over the past nine to 10 months. But I think Scott probably has some things to add to this.

MCMAHON: Yeah, I was just going to ask, Scott, do you want to add to that, please?

SNYDER: Yeah. I mean, the biggest leverage that the president has at this point is the urgency of the situation, and the fact that the time is not on the U.S. side. And I think that increasingly what we’re going to see is that sense of urgency used as a prod to China, both in the sense that if the economic measures don’t work then there’s the possibility of military conflict, which the Chinese don’t want. And also the possibility that President Trump might implement executive orders that were authorized back in September that would enable secondary sanctions measures against Chinese firms. And so those are basically the main instruments, I think, that the administration has by which to try to induce greater action by China.

MCMAHON: Thanks. Operator, we’ll have another question, please.

OPERATOR: Thank you. Our next question will come from Shawna Thomas, Vice News.

Q: Hey, thanks for doing this call.

Number one, if you could expand a little bit more on how you think Prime Minister Abe is going to use this trip to sort of push for more military capabilities for Japan. I know you talked about it a little, but do you think we’ll see any conversation about Article 9 of their constitution, anything like that? And how can he kind of use Trump in that way? And also, I’m curious if anyone has any thoughts on kind of the anti-Trump protests we expect to see in South Korea.

MCMAHON: So, Shelia, starting with you, please, on the Abe.

SMITH: Sure. I’m happy to talk about Abe. So a lot of these statements that have been made about Japanese support for a strong American reaction or response to the proliferation or the belligerence by North Korea, these have been stated before this. I don’t expect that you’re going to see in this visit anything brand new, anything that’s going to surprise you. So my previous comments about what the Japanese security planners have been thinking about in terms of, you know, making sure that their defenses are able to cope with the rising missile threat from North Korea, these are conversations that have been ongoing now for some time. And they don’t belong, frankly, just to the Abe administration or the Abe Cabinet.

But you mentioned Article 9. And I think it’s always useful to understand that Prime Minister Abe has been a strong advocate of a Japanese debate on revising the constitution. His party, the Liberal Democrats, have a draft constitution, a new constitution out there online. You can go see it. And he has wanted the conversation to move forward.

This election that’s just happened a couple of weeks ago has now resulted not only in Abe’s party or in his coalition, including the Komeito Party. But there are new parties that have come into play in the last several years or 10 years or so that are also pro-revision, maybe for different reasons and not specifically on Article 9. So you are going to have an accelerated conversation in the legislature, in the lower house of Japan, on revision. Not all of this is going to be about Article 9.

But the prime minister in January put forward his suggestion of what he wanted to see. And so this is what’s kind of in the mainstream now. And that is, he doesn’t want to change the language that’s there. So the two paragraphs that talk about restricting military force to the purpose of self-defense, or it’s been interpreted to be for self-defense only, that will stay. But what he wants to add is a sentence or two that speaks to the question of whether the self-defense forces are, in fact, constitutional under the 1947 constitution. And he wants the constitution to actually say that they are constitutional so that there’s no more internal domestic divide in Japan over that question.

I think what you see on the military front on Japan, though, is a very careful rationalization of new capabilities in terms of what Japan’s defense needs are. I do not subscribe to the notion that Japan is about to go willy-nilly into militarism or to gain offensive capability. And even when—and I think it’s a when, not an if—when you have the debate over conventional strike, it’s transparent. It’s in the public eye. It will be debated. It will have to be defended if it becomes a government proposition; you know, proposed reform. So you’ll see Japanese democratic—democracy at work. And I think the rationale will be for does Japan’s defenses meet the needs of a changing security environment?

MCMAHON: Thanks.

And then the follow-up on South Korea, the potential for protests. Scott, do you want to take that one?

SNYDER: Yeah. Well, I mean, you know, here we are with a South Korean government that itself came to power on the back of massive candlelight street demonstrations over corruption of their predecessor. So there’s a limit to what the South Korean government really can do in terms of quelling anti-Trump demonstrations. I do not think that Trump himself would see any demonstration that might occur in South Korea directly. But there is a concern, I think, among South Korean officials that he might see it on TV and he might react poorly.

And so I think the South Korean government is doing everything that they can in order to provide hospitality and to try to control the messaging on the trip. But there are clearly things, both among the South Korean public and that Trump himself might do, that are going to be beyond the South Korean government’s control, no matter how good a host they try to be.

MCMAHON: Thank you.

Operator, we’ll take another question please.

OPERATOR: Thank you.

Our next question will come from Lee Cullum, Public Media of North Texas.

Q: Thank you very much. And thank you for a compelling and certainly timely presentation.

I’d like to go back to THAAD, the Terminal High-Area—High-Altitude Area Defense. Does it really defend Seoul very well? I mean, I have been told that it is pretty effective for the southern part of the country, but not Seoul, where there are an awful lot of people. How defended is Seoul?

MCMAHON: Scott—

SNYDER: Well, in terms of missile—yes. In terms of the THAAD missile defense system—

Q: Missile defense, THAAD.

SNYDER: Yes—it’s really designed—it was deployed at the request of the U.S. Forces Korea as a necessarily force-protection measure in order to—that is focused on U.S. bases, protection of U.S. bases, so that the military assets that are located there are able to execute their task of defending Seoul and defending South Korea. But it’s true that, you know, as a direct defense measure designed to protect a civilian population, that’s actually not the way the system, as currently deployed, is configured.

Q: Thank you.

MCMAHON: Thanks.

Another question. Operator, we’ll take another question please.

OPERATOR: Thank you.

Our next question will come from Fred Bergsten, Peterson Institute for International Economics.

Q: Liz, you mentioned trade a couple of times in the China context but did not elaborate. And I’d like you to do so. I find it hard to believe that Trump, given all he has said about China’s economic aggression against the U.S., would not make a fairly big deal about that on his trip. He’s teed up actions against China on steel, on aluminum, on intellectual-property rights.

So what do you think? How will he handle the trade issues on the trip? Will he just continue to let them go in the hope that China will help more on North Korea? Or, to the contrary, would he use them a little more aggressively to try to get that help?

And in addition to what he might do on the trip, what do you think he’ll do when he comes back home after the trip on these various possible protectionist steps that have been teed up if he does not get satisfaction from the Chinese?

ECONOMY: OK, thanks.

I don’t think he’s going to get satisfaction out of this summit on the, you know, full range of issues that he’s raised on trade and investment. I think part of it is that, you know, he’s launched the 301 investigation, right, for intellectual—intellectual property rights. And they’re dealing with forced technology transfer, investigation into that. He’s already put the tariff on aluminum foil.

There are a whole range of issues like, you know, access for financial market—access for financial services, SOE subsidies, you know, steel exports, excess capacity, cyber law. He’s taken already to the WTO for debate the Chinese cyber law, which requires companies to store all their data within China, among other things.

So I think he’s put a lot of things in motion already that have not come to—will not come to fruition by the time he sits down with Xi Jinping to meet. So I would expect that he’ll make his points there. He’ll make them forcefully. And, you know, maybe—I think the Chinese will give some deals. Certainly there’ll be some deals announced. You know, will there be some slight, you know, market opening in one sector? Perhaps. But I think the types of issues that he’s raised are not going to be resolved at this summit. I think they’re going to play out further down the line.

And so I think we’re going to have to wait to see the results of the, you know—the 301 investigation, what happens with the cyber law, et cetera. But I think he’s going to continue to push hard, because there’s been no movement on the trade deficit, no improvement in the trade deficit. It doesn’t look like there’s going to be. And that is one of the things that he has set out and said that, you know, that’s got to be changed; we’ve got to have a level playing field. And, of course, he’s all about that bilateral trade deficit. So I don’t—I don’t think that this moment is the moment that he’s going to use to define progress, but I’m sure he will raise the fact that there hasn’t been sufficient progress.

Q: But just as a follow-up, I interpret that one reason he has not actually done more is because of his hope for Chinese help on North Korea. Do you think that kind of stalemate will continue and he’ll continue to hold his fire, even after he comes back, despite his dissatisfaction, in the hope that the Chinese will do more help—be more help on North Korea?

ECONOMY: Well, I know that, you know, a while back that he had raised the prospect of giving China, you know, a better trade deal if they got—if they helped more on North Korea. I haven’t heard much mention of that particular tradeoff recently. And again, I feel as though he’s becoming increasingly aggressive, and a number of the things that he’s put in motion, you know, may turn out to have some pretty serious consequences.

So we may just be reading, you know, what he’s done thus far a little bit differently. You know, I think he’s moving actually reasonable aggressively. So I’m not sure that that tradeoff still exists on North Korea. But you’re right. It certainly was, you know, discussed before.

MCMAHON: That’s a great question.

Q: OK, thanks.

MCMAHON: Thank you.

Just a quick reminder that this is a CFR on-the-record conference on President Donald Trump’s trip to Asia. And we’re talking with Elizabeth Economy, Sheila Smith, and Scott Snyder.

Operator, do we have another question please?

OPERATOR: Thank you.

Our next question will come from Paul Heer, George Washington University.

Q: Yes, thank you. And hello to Sheila, Scott, and Liz.

I want to follow up on Scott’s reference earlier to this recent and apparent rapprochement between Beijing and Seoul. I’m wondering, does that portend some convergence between them on how to deal with North Korea, and perhaps in an effort to influence Trump’s approach to North Korea? Or how—what signal was that intended to—well, what signal does it send, intended or otherwise? And how should Washington—and, for Sheila, Tokyo—interpret that?

MCMAHON: Scott, why don’t you—

SNYDER: Yeah, OK. I think we need to learn a little bit more about the form and substance of the—of the rapprochement. It looks from initial reports like South Korea made promises in various forms not to introduce additional THAAD batteries to the peninsula, a pledge that that is not directed at China, a pledge not to regionalize missile defenses or join into a regional alliance. And some of those apparent pledges could contradict expectations in terms of U.S.-Japan-South Korea security cooperation. It’s going to be interesting to see how South Korea walks that particular line and how it plays out.

But I think that we need to know a little bit more. We also need to know more about whether or not the South Koreans got pledges from China, in particular on help with North Korea. But in the initial phase, it does remove a problem between China and South Korea that has been stymying expanded cooperation on pressure toward North Korea because the THAAD issue had, I think, driven a wedge between China and South Korea.

MCMAHON: Thanks.

Sheila, did you want to add anything on the—

SMITH: Yeah. Yeah, I can a little bit on from Tokyo.

You know, Japan and—well, Tokyo and Seoul have slightly different takes on China. That’s an easy start—(laughs)—right there. And the Japanese have been somewhat concerned—not just President Moon, but President Park before him—that Seoul was a little bit more willing to cozy up to Beijing than the Japanese were, and so that made them uncomfortable.

I think they will be watching this meeting with the same caution that Scott suggests is required, that let’s wait and see first what it is before we—before Japan reacts. I think if Seoul has made specific promises about limiting U.S. military ability to operate on the peninsula, Tokyo will be very concerned about that, and they may actually say something out loud.

I think the larger question is the longer-term strategic vision, the differences between Seoul and Tokyo on China itself. And again, I think Mr. Abe will want to position the Trump-Abe conversation at the very beginning of this trip to continue to urge that the United States stand firm on—not only on cooperation on North Korea with China, but also on the broader geopolitics of the region. So, again, I think Tokyo will be alert to this meeting and will be looking to see what exactly President Moon is going to do.

It’s also, Paul, you know that in December Japan hosts the trilateral Japan-South Korea-China meeting. And that’s when, I think, Premier Li has already committed to going to Tokyo, so it will—it will happen. You’ll have Abe, Moon, and Li then in Tokyo, discussing the region. And then, hopefully, I think that Prime Minister Abe wants Xi Jinping—he and Xi Jinping to exchange visits in 2018. So there’s quite a bit going on here in the diplomacy without the United States in Northeast Asia to pay attention to.

MCMAHON: Thank you.

ECONOMY: If I could just add, I think from the Chinese perspective this actually represents a not-inconsequential, you know, tradeoff, because they’ve basically now acquiesced to THAAD. And, you know, I think we all know that every time a Chinese official will come to the United States, THAAD was, you know, right at the top of their agenda in terms of, you know, trying to get the United States to pull back from this. And in addition, they’ve, you know, in essence potentially lifted the—what was a de facto trade and investment embargo with South Korea. And so, you know, if this actually pans out in the way that it seems to be suggested, I think it’s significant on the China side in terms of what they are giving up as well.

Q: Thank you.

MCMAHON: Great, thank you.

Operator, do we have another question, please?

OPERATOR: Thank you. Our next question will come from James Reinl, Al Jazeera.

Q: Hi, guys. Thanks so much for the briefing today. Can you hear me?

MCMAHON: Yes, we can.

ECONOMY: Yes, we can.

Q: All right, great stuff.

Yeah, it’s a kind of personality question, but obviously, Trump is a bit of a wild card. Sometimes he completely sticks to the script and reads out what the teleprompter says, and other times, as we know, he can get personal grievances, he can unleash them on Twitter, he can say fairly unpredictable things about North Korea’s leader, he’s got into a spat with Moon in the past. It’s also a very long trip. He doesn’t like being away from his bed. There are some tough issues ahead of him, challenging ones, and also some tricky people—Xi Jinping, Duterte, Vladimir Putin’s going to be around. I’m just wondering, how high do you think the risks are for some kind of diplomatic incident? Where might it happen? And how seriously might it be able to upset the cart?

MCMAHON: So a different kind of a question. We talked about it a little bit individually. Why don’t we start out individually with you, Scott, and South Korea, and go from there?

SNYDER: OK. Well, I do think that in the course of the past 10 months we’ve been socialized to expect drama from President Trump. And in South Korea, I think that among government officials there are going to be a lot of white knuckles and held breath throughout the two days of his time in South Korea. And basically, they want him to stay on script, but of course there’s no way that they can control that.

(Cross talk.)

ECONOMY: Yeah. I would say in China, as I mentioned earlier, that I think this is a very tightly-scripted visit with very few opportunities for President Trump to speak out publicly in any form. You know, Twitter is banned in China. Now, I imagine that people can help him find a way around it, but it may turn out to be, you know, 36 hours of, you know, drama-free, you know, tweeting from the president because he won’t be able to do it. So I don’t anticipate, actually, that China will be the place where there might be some, you know, major off-script upset.

MCMAHON: Thanks. Thanks, Liz.

Sheila, how about Japan?

SMITH: So, you know, again, it’s always possible. And I think, again, as Scott said, the white-knuckles approach won’t just be government officials, I suspect. Many of us watching will also be somewhat, you know, worried about what could go wrong.

The Japanese context, of course, is—what I mentioned at the very beginning, is obviously the optics and the—you know, the carful choreography of that visit with the Japanese emperor will mean a lot to the Japanese people.

The press conference, the Japanese press are not shy about asking about difficult issues. What we haven’t talked about at all are the continuing base issues that certainly underpin our allies in Asia. And, of course, a Japanese reporter is quite, quite likely to ask about Okinawa and those difficulties. And this is not an administration, I think, that has paid a lot of attention to the difficult relations between the residents of Japan and U.S. military forces on the ground.

So there’s lots of things that could get, you know—could get, you know, a little bit of the local sensitivities riled up, and then in reaction the president’s Twitter impulse might react. I think, though, that this needs to be a good trip for the Trump administration, and I think that is widely understood.

One piece that we haven’t asked about or one thing that is one—the setting when President Trump is absent, and that is the East Asia Summit. His absence at that meeting, I think, speaks volumes—or will be interpreted, I should say, as speaking volumes about U.S. engagement in the leadership of the future of Asia. And so expect all countries to be on alert there for what kind of narrative comes out of the East Asia Summit in his absence.

MCMAHON: Thanks for that, Sheila.

We have time, I think, to squeeze in one more question. So, operator, is there another question, please?

OPERATOR: Thank you. Yes. Our last question will come from Glen Fukushima, Center for American Progress.

Q: Thank you. I have a question for Elizabeth Economy that deals with the previous question that Fred Bergsten asked about the economy between the U.S.—economic relations between the U.S. and China. I’m told that the president is taking to China, unlike to the other countries, a large delegation of American business executives. And the speculation is that he’s going to use this opportunity to announce some big deals and, number one, take credit for having created these deals, despite not having been able to make much progress on the other—(audio break)—including the security issues. And, secondly, this is a great opportunity for Xi Jinping to show how much benefit there is to Donald Trump in treating China well.

And then, number three, when the president went to Riyadh, he announced a $110 billion arms deal, which turned out to be less than actually 30 billion (dollars). And I’m just wondering if you could tell us, Elizabeth, a little bit more about the nature and size of this delegation, what kind of deals do you think will be announced, and who is going to be watching closely to make sure that this is not going to be fake news.

ECONOMY: So thanks. I don’t know what the deals are that’s going—that are going to be announced. I have heard that there will be deals announced. And, you know, this is always, frankly, historically an easy way for a U.S. president and a Chinese president to have some positive spin in an otherwise, you know, not very memorable kind of summit. So I don’t think there’s actually anything unusual or particularly special about this effort. Yeah, there’s going to be a CEO summit in China, and I do think it’s—you know, it’s a way of distracting from the fact that there’s been no progress in China on structural reform, market access, or the big issues that the president has tried to make progress on with regard to China.

So I don’t know what the deals are going to be. There will be some. You know, I imagine they will actually come to fruition or we will hear about it. I don’t think these companies are going to allow themselves to be part of fake news, at least I don’t expect they will be. But I don’t think they should be taken as a sign either of, you know, Xi Jinping’s largesse or of, you know, President Trump’s victory.

MCMAHON: Thanks.

And we will conclude on that note. I would like to thank all the members on this call and the excellent—for the excellent questions, and especially our panel—our terrific troika of Elizabeth Economy, Sheila Smith, and Scott Snyder. This concludes this Council on Foreign Relations on-the-record conference call.

(END)

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