Rebalancing U.S. Alliances in Asia

Rebalancing U.S. Alliances in Asia

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Asia

Diplomacy and International Institutions

CFR Senior Fellows Sheila A. Smith and Scott A. Snyder, and the Lowy Institute's Euan Graham, join the Atlantic Council's Jamie Metzl to discuss the prospects for U.S. alliances in Asia. The panel considers the state of the United States' relationships with its allies and partners in the region, and how the Obama administration is shifting the nature of these partnerships to buttress its ongoing rebalance to Asia. The discussion considers tensions between South Korea and Japan—two countries that are major U.S. allies in northeast Asia. The panelists go on to consider the effect of the Trans-Pacific Partnership, Japan's shifting military posture, and the role of China's rise in shaping the expectations of U.S. allies.

This meeting is part of the U.S. Rebalance to Asia Symposium, presented by the Council on Foreign Relations and the Lowy Institute for International Policy.

This event was made possible by the generous support of longtime CFR Member Rita E. Hauser and the Hauser Foundation.

MODERATOR: All right. Let's do this. Hello, everybody. Welcome back. And welcome to anybody who's just joined us for this session. I think a lot of people have joined because they heard that this was going to be a best session of the day. I can neither confirm nor deny. But we're gonna absolutely do our best.

So we have a great panelists. I'm Jamie Metzl, and I'm thrilled to be presiding over this—over our conversation today.

Before I begin, I just need to say that I get in trouble if I don't give the—the instructions, which are completely a turn-off. And this is underlined—not just put on vibrate. No matter how enjoyable that sometimes is—your cell phones, Blackberries, and all wireless devices to avoid interference with the sound system. And this meeting is contrary to normally, or very often at the council, is on the record.

So with that, we've been talking all day and last night about Asia, about America's role in Asia. You all know that America has been a continuous power in Asia, with—for over a century. So we see ourselves as a Pacific power, we are a Pacific power.

But certainly, over the past more than half-century, that presence has been strengthened, that connectivity has been strengthened, through the alliance system. The alliance system began in early 1950s with the alliance with Japan. And now there's Japan, Korea, the Philippines, Australia, and Thailand, even though Thailand is sometimes in the doghouse. When we talk about the "alliance system," that's what we're—we're talking about.

But then there are others that are kind of quasi allies. And in that category, certainly, there's Taiwan. And Singapore is behaving in many ways as a quasi ally. And now with the strategic relationship, as Alyssa mentioning in the last session, with India, it's certainly—India is not a technical ally. But there's a lot of collaboration and cooperation between them growing between the United States and India.

And for these past 60-plus years, this system has been both a foundation of the Asian order and, at least initially, an important mechanism for standing up against what was then seen as soviet aggression.

And we compare the development of these relationships and this quote, unquote, system in Asia and what's happened in Europe, there's a big difference. Because in Asia, SEATO, the Southeast Asia Treaty Organization, was tried. It failed. Unlike NATO, which succeeded in Europe. And the regional relationships and the regional structures and systems in Europe are much less strong that than those regional structures and institutions in Asia, which is more—rests upon more of a foundation of bilateral relationship. And iconically, that's true both for the United States and for China.

In the Cold War, as I mentioned the threat of the Soviet Union and of communism pulled these alliance relationships, cemented these alliance relationships together.

And then when China began to rise, particularly when they were doing so under the banner of peaceful rise, a lot of questions were raised about whether this alliance system was even needed at all. And I at that time was spending—I was going back and forth. And everywhere I went, people would say thank you so much for your service, things are—Asia is maturing to a level where now it can handle its own affairs. Thank you, but we can take things from here.

And it's ironic how different things seem now that China's orientation is at least perceived as being quite different. And with these kind of conflicts that we're seeing in the South China Sea and East China Sea and elsewhere, there's a new life for this alliance system. But still important questions remain of whether the alliance system underpins with a developments of regional relationships and regional systems in—in Asia or it undermines the development of those systems. And I think that there would be different views based on—on where you sit. I think certainly people from this perspective would say—most people would say it underpins. And people in Beijing might say it—it undermines.

To address these and many other topics related to this, we have just a fantastic group of speakers. You all have their bios in your booklet, so I won't say too much.

But just very quickly, Sheila Smith, who's an expert in Japanese politics and foreign policy, which was proven by her outstanding performance in the last session. And—and she's a senior fellow at Japan Studies at the—at the CFR. And very importantly is the author of this fantastic book called "Intimate Rivals. Japanese Domestic Politics and a Rising china." So I certainly encourage everybody to please have a look at this book.

Euan Graham is director of International Security Program at the Lowy Institute. He's a former research analyst at the U.K. Foreign and Commonwealth Office. And very interestingly, was the charge d'affaires at the British embassy in Pyongyang. And he also is the author of a recent book called "Japan's Sea Lane Security, 1940 to 2004, a matter of life and death? Question mark.

And Snyder, who I've known for many years, is a senior fellow for Korea studies and director of the program on U.S.-Korea policy at the CFR. He directed the CFR's independent taskforce on policy towards the Korean peninsula. And he also is the author of the book—is it out or forthcoming?

SNYDER: Forthcoming.

METZL : Forthcoming. Called Japan—"Japan-Korea Identity Conflict."

So I hope everybody will please pick up these—these books and read them and enjoy them and tell your friends.

And so with that, just I mentioned different perspectives. Kind of a more American perspective, and a more Chinese perspective. But one thing that Xi Jinping himself has said, he has called these alliances a "Cold War relic." And that's part of calling for a new Asia security concept, which presumably would not be based on these alliances.

So why don't we start with a little bit going back into the history and exploring at least the Cold War origins of these relationships as a foundation for then beginning to explore their—their relevance today.

And because Japan was first, maybe Sheila, we'll start with you.

SMITH: OK. Thank you, Jamie. I'm delighted to be back.

So the Japanese U.S.-Japan alliance was born alongside the peace treaty, the San Francisco Peace Treaty that restored Japanese sovereignty in 1952. I eluded to this in the earlier panel. The first bilateral treaty had no U.S. commitment to Japan's defense. There was 360,000 American servicemen on Japanese soil at the end of the occupation. It was largely a basing treat thank you.

So in the late 1950s, because of popular criticism of the alliance, Mr. Abe's grandfather, Prime Minister Kishi, instituted a renegotiation of the terms of that treaty. So the treaty we refer to today is the 1960 treaty. It's a mutual security commitment. The United States under Article Five is obligated to the defense of Japan. And under Article Six, the Japanese government is obligated to provide facilities and bases for U.S. forces, which will stabilize the far east. So there, that's the basic security bargain wrought (ph) by Japan in 1960.

Over the Cold War, Japan was largely a supporting actor. I mean, U.S. Cold War strategy, if you think particularly the military part of the alliance. If there was a contingency in Korea, the two militaries were organized on how they would respond. Japanese bases would be available. Any kind of logistical support the Japanese forces needed would be available. There's no mention, no thought of Japanese forces going to fight on the Japanese peninsula, for example.

There was no mention of Taiwan. Taiwan was a very quiet conversation in the bilateral relationship. It was there, but it certainly wasn't (ph) an overt part of the Japanese perception of the alliance until the 1990s.

1980s, this audience will be familiar with the U.S. and Japan. Had quite a—quite a strong conversation about Japan's rising economic power. It was the era of burden-sharing in the U.S. Congress. The U.S. Congress wanted Japan to spend more money. If it wasn't going to participate fully militarily, this was the moment when the economic superpower ought to invest more in its own defense and ought to spend more on our forces in Japan, as well.

So the burden-sharing era is also very much a part of our history, the latter part of the Cold War. But it's an important piece of the alliance puzzle for us.

And then the post-Cold War period I think we could talking about later. But it was really been a massive adjustment for Japanese and American thinkers about what the role of this alliance is and what the roles and missions and capabilities in defense-speak, what that means and how we're gonna share that in this rapidly changing Asia.

METZL : Terrific.

Scott, a little background (inaudible).

SNYDER: Sure. Well, I think United States learned the hard way about the importance of Korea to regional security in Northeast Asia. In January of 1950, (inaudible) gave a speech that excluded the Korean peninsula from the U.S. security perimeter. Six months later, the Korean War started.

And following the war, maybe the feature of the formation of the alliance that is most interesting is that it was really established, I think, primarily as a product of U.S.-ROK mistrust. Because following the war, a main concern of U.S. security planners was that (inaudible) would go back north and try to restart the Korean war. He didn't sign the armistice.

And so this relationship from the '50s was a patron-client relationship, where the United States guaranteed South Korea's security. South Korea didn't have to do anything. I think the remarkable development in the alliance in the post-Cold War period has been the emergence of a democratic market-based economic South Korea as a partner of the United States.

And we have seen the scope of the alliance expanding in especially 2009 with the joint vision statement. It's natural that I think from a Chinese perspective, the alliance relationship between the U.S. and South Korea might feel or seem a little bit like a Cold War relic because, after all, the Chinese were on the other side in the Korean War, an enemy of South Korea.

But in the early '90s, they developed a vibrant economic relationship. China is South Korea's largest trading partner. And at one point I think in the mid-2000s, the Chinese saw south Korea as low-hanging fruit. They were waiting for troubles in the U.S.-ROK relationship to develop in such a way that all China would have do is stand—stand there and be the alternative.

But over the course of the past decade, I think that what we have seen is a very interesting correlation, not causation necessarily, between South Korean angst about the implications of China's rise and rising levels of support for the U.S.-ROK security alliance. So now we have an alliances that a partnership. It is multifaceted. And it's still primarily focused on North Korea, but China's in the back of everyone's mind.

METZL : Euan, Southeast Asia and Australia?

GRAHAM: (inaudible) maybe I'll start with (inaudible), which although Japan was first, I think (inaudible) was just one day afterwards...

SMITH: Yes.

GRAHAM: ... so it has been right there from the start.

In many ways, I think it's these troubled relationships for the United States. That's borne out from the record of continuous contributions that Australia has been there pretty much in every war that America's fought in that period since the alliance was founded. And that reflects also in very high levels of populous support of the alliance within Australia.

The New Zealand component of that, little more troubled. Back in the 1980s and the policies of the labor government in New Zealand towards not allowing nuclear—nuclear weapons within its territory.

We've seen kind of a move back to the—back into to fold, if you like, of (inaudible) originally conceived. But the Austrian-U.S. relationship I think remains (inaudible) most steadfast at the hub and spoke arrangements. And also, President Obama, I think not by coincidence, chose to give his clearest articulation of the rebalance. And we've seen that there's continual growth, starting with the marine detachments.

So in the current context of the rebalance, Australia's also had a—a sort of front-and-center role there. And that's borne out again in the reciprocal, in relative terms, quite substantial contribution that the Australian government has made to the ISIL campaign by the form of special forces and Air Forces.

Shifting focus up to Southeast Asia, we also have the Philippines, is one of the sort of original groupings. Obviously, a kind of legacy of the special relationship between the U.S. and the Philippines. But also more troubling (inaudible). And, of course, as if obvious I think to all of if audience the key watershed (inaudible) that put that alliance in its most troubled period was the early 1990s when the Philippine Congress voted to eject U.S. forces and the bases were closed down.

Things come around. And now we're in sort of a period of revitalization, with the (inaudible) arrangements being arranged between the U.S. and Philippines, although we're not looking I think at any kind of formalized basing presence. Nonetheless, the Philippines, by virtue of its (inaudible) strategic geography is also I think uniquely valuable to the U.S. in a Southeast Asian context.

Thailand, I think more of a Cold War arrangement in the way that it came to be. We can talk a little bit more about that later on. But I'd just like also, as I'm coming from Singapore into Australia, that Singapore, although not in the formal alliance system, as arguably become more important than some of the formal allies in southeast Asia. And I think that that's the interesting thing about southeast Asia and the rebalance. It's a much more fluid environment, where the partnerships in some ways have a momentum.

METZL: Right. And it's interesting that these relationships are developing in response, of course, to changing circumstance; that is in the beginning there was a Cold War and an anti-Soviet orientation. And then there was a question of what they were—were really for. And now, with this growing fear of China, this spread, certainly without maritime Asia pretty evenly, there's a strong sense in many of these countries that the U.S. bilateral relationship, whether it's Japan or Korea or Philippines or even others like Vietnam, who aren't allies. But that that bilateral relationship is essential for their continuity.

But there's a question. Because there's also a movement towards stronger multilateral institutions in Asia. As I mentioned before, the institutions in Asia, whether it's the ASEAN Regional Forum or East Asia Summit or there's a bunch of them, are not nearly as strong as those kinds of institutions in—in Europe.

And the question is too—and one is I think Scott—or I know because I was there. Scott framed it in our earlier conversation. One question for us to explore is does this series of bilateral relationships constitute a quote, unquote, system? And if so, or even regardless of the answer to that, is there a conflict between this series of bilateral relationships and the development of meaning multilateral institutions in—in Asia?

Maybe—Scott, maybe we'll start with you.

SNYDER: Well, I think that the tension really there is over the question of collective versus cooperative security and how those forms of cooperation might be institutionalized going forward.

And I'll just say that I think that that is a dynamic question in Asia. It is an evolving and organic question. And I think that it is related to the fact that we really don't know yet what the future of China's rise really is gonna be and its implications for the security system in the Asia-Pacific. And so everybody I think generally speaking is more in this engaging and hedging mode.

METZL: Right.

SNYDER: And so the engagement comes I think primarily in direct interaction with China and in cooperative institution building; trying to impart international norms into the region. But, you know, there's also this element of hedging, which I think that we see both in the bilateral alliances and in the fact that the rebalance creates an environment in which increasingly, the United States is anticipating and expecting greater cooperation among allies with each other and partners in various forms.

And so we're in this very I think delicate phase. Because we know that China doesn't like rebalance. And probably the reason why they don't like the rebalance is because they don't really think that a NATO model should be transferred to Asia. At the same time, the administration, when it talks about the rebalance, a lot of focus goes on to the alliances. But the second priorities was actually engagement with China and other emerging powers.

And I think that this administration has actually been quite robust in its efforts to engage with China. I think that's a point that sometimes, when we talk about the rebalance, it actually gets lost.

And then the third point is regional institution building, which is really about cooperative security, but for the purpose of placing China's rise into context and providing some socializing effect on the impact of China's rise.

METZL: Sheila?

SMITH: You know, when you were talking, Jamie, I thought it might be useful to take a step back and think a little bit about that. We're still—I don't want the spend too much time on Cold War history.

But we often think in the United States that when we talk about the Cold War, it's the Soviet Union we're talking about. And if you think about the Cold War in Asia, if you're an Asia historian, especially a post-war historian, right, the hot war, the Korean war, as Scott said, produced the alliance with Korea, produced the alliance with Japan. So the Cold War manifested itself most dangerously in Asia.

And the second piece of the puzzle we haven't introduced but it's probably important is the Southeast Asians themselves decided that they needed a security community. We talk about ASEA (ph). By that was a product of the 1960s and a recognition that Southeast Asia need to get over its own internal kind of tension and irritations.

So today's multilateralism in Asia is largely built over two things. One is the shift in the way in which we perceive China, which began in the 1970s and really bifurcated that Cold War experience for Asia. But also, it's resting on this ASEAN foundation of multilateralism in the region.

I suspect the rebalance, as we look out and look at our engagement with the region, part of it is a rebalancing of our priorities. American foreign policy priorities are being rebalanced; right? It's rebalancing our diplomatic attention to Southeast Asia, which had been underserved I think in many ways in our conception of our interest in Asia. But it's also kind of a straddling between our traditional military allies and this rising China.

And again, for the Japan story, that straddling is really at the center of the way we're struggling to reaffirm our commitments, but also understand how it means—how it's changed the commitments that we do make to the Japanese.

But Japan—other countries around the region have been much more invested in multilateralism. We came late to the game, as you know. President Obama has—has made the East Asia Summit participation at least in theory a hallmark of his rebalance to Southeast Asia. But we wanted to participate actively in the institution-building itself. But we came late to the prospect. And Japan has been there. China in the 1980s and into the 1990s was actually a fairly active participant, as well.

So whether—I think collective security is not what we're envisioning. I don't know that anybody—and I'd be interested in U.S. point—nobody wants to go back there in knitting them all together to look like NATO. But it's somewhere in between a collective security arrangement and a genuine cooperative security (inaudible), I think.

METZL: Euan?

GRAHAM: Well, there was an attempted to do so. There was a Southeast Asia (inaudible) organization...

METZL: Right.

SMITH: Right.

GRAHAM: ... which founded for precisely the reasons that we've talked about.

That (inaudible) to mind, I think that there is a disjuncture, if you like, between the nuts and bolts of the security relationship and what diplomatically the hopes invested in ASEAN a vehicle for kind of collective engagement.

I think that's role it fulfills, but that's a fairly low glass sealing. There isn't the uniformity of threat perception or capabilities between the Southeast Asian towards China in particular. And that's been very manifest in terms of the fault lines that we've seen emerging in the in the South China Sea.

So there I think—to get again back to the sort of mechanisms through which America delivers its defense engagement, I think it's much more at a sort of bilateral level. But not just with the traditional alliances. Here again Singapore comes to mind. Because it's a quasi alliance, which sort of operates at the level without a formal treaty obligation on either side.

And frankly, that's where Singapore likes to have it. I think U.S. has offered treaty status to Singapore, and Singapore is quite happy where it is. Because it is—again, Southeast Asia is that much closer to China. Australia is much further away. Japan also has its own—it's just a more binary relationship, I think. Southeast Asia is more fluid.

And ASEAN serves as a kind of—a kind of cloak that you can wear to socialize China. That's the hope that's placed within it. But as a vehicle for security cooperation, it's consistently under-delivered. And I think that's—that's an open secret; that it's really a—a way of getting the disparate Southeast Asian countries together to give them a collective voice, as well.

Because going back to—another historical historical question. The origin of ASEAN was precisely for that—that reason. It was originally a (inaudible) communist grouping, but primarily to sort of present a collective face. Because the fault line of the Cold War ran hot through Southeast Asia for a long decade. And that memory is still there.

And there is a common refrain now that you hear, almost a mantra, in Southeast Asia, that no country wants to choose between China and the United States. It is (inaudible). But there again, you see the same fear reflected; that Southeast Asia I think fears that it, of all the subregions within the macro Indo-Pacific, has the most potential to be a kind of theater for proxies and great power, sons of influence and rivalry.

METZL: Yeah. And let me—let me stay with you, Euan. Because in that context, there is a perception struggle. Some say that there's a bit of a China bubble in perceptions. Because when countries are thinking about hedging, they all will need do do their calculus of what the relatively of power is. And if it's 80/20 U.S. to China, it leads you to make very different decisions and thinking differently strategically than if you see it as a 50/50 or it's something moving toward a 50/50.

And that brings us back to something that's been a theme throughout this conference, which is the rebalance. And so my question, starting with Euan, is does the continuity, the continued strength of the alliance system, require a success, at least a perceived success, of the rebalancing in the sense that as China continues to grow, as we've seen China, Asia Infrastructure Investment Bank, China handled it extremely well. The United States handled it, in my opinion, extremely poorly.

If we have more of these kinds of situations, will there be a perception shift? And will that undermine the alliance system? And I ask—I start with you, Euan, because in Japan and everyone with Korea, some of these situations—they're more cemented. Japan has its interest. Korea has its interest and its history. But southeast Asia feels a little more up for grabs.

(UNKNOWN): Yeah. Yeah. Well, as Sheila mentioned, part of it was there was a rebalance within the rebalance. The idea of having a more sort of distributive footprint away from Northeast Asia. The composition to have panel, in fact, reflects the fat that the big-load bearing alliances are up north. I mean, Australia is a sort of southern maritime anchor. But in Southeast Asia, it's much more disparate.

So let me come back and say I'm in favor of the rebalance. I think that was—it was a kind of bumper sticker that was well received. And there were demand signals which (inaudible) it within Southeast Asia around that sort of 2008/2009 time when China's (inaudible) began to sort of become more manifest and to start to concern some of those southeast Asian, particularly the maritime countries. The continental countries, much less so.

And I think Cambodia, Laos, Myanmar, are in rather a different comp. Vietnam's the interesting one, because geographically it's both continental and maritime. And maybe it's shifting more toward the maritime identity over time.

I think Southeast Asia collectively can be a very fickle audience, as well. Because there is a longstanding oscillation between the perceptions of the United States being either over-militarized or unattentive. It's very difficult to get that middle spot right.

I think the rebalance was an attempt do that. And the problem is that in making policy hostage to that bumper sticker, you are then subjecting yourself to constant testing of whether you are paying enough diplomatic attention, enough military attention, enough economic attention without overegging (ph) that.

And I think we saw in the way that the rebalance was brought out with the military first, I think there was a—a kind of reaction against that in Southeast Asia that that went much towards the over-militarization spectrum fear.

I think that's been overcome recently. I think also in China's eyes, if we're looking at, for example, the littoral combat ships, which have been stationed out of Singapore, I don't think China sees that as a strategic game shifter, any more than the deployment of 2,500 marines in North (inaudible) is gonna make a real strategic shift.

But nonetheless, I think the—the deficit to the extent it's now with felt in perceptions is much more on the economic leg of the rebalance, rather than the military. I think most people understand and they get the military side. They may have perceptions that it goes a little bit too far sometimes. But I think they—they don't balance it.

What they—I think the balance more is about the economic sustainability and how far that can be perpetuated in U.S. policy.

METZL: Right. So Sheila, let's stick with the military side of things with relation to Japan.

One of the challenges of the alliance relationship between the United States and Japan is that it works really well for the kinds of scenarios that it was built to address. So if say somebody does an invasion of Japan, it's really clear what the United States would do and is required to do.

But China has been very, very smart, both in—with the Philippines and with Japan of using the so-called salami slice tactic. You just do a little bit at a time, just a small slice of the salami each time. You still may wind up with cutting away a lot of the salami. But at each point, if China is just doing some small provocation, some small advance, putting more ships into Japanese territorial waters, nothing ever rises to the level where the alliance is triggered.

Is the salami slice strategy, or the so-called salami slice strategy, a challenge to the alliance system, both in reality and in perception?

SMITH: Yes. Most definitely. So there's two different challenges. And I think if you're sitting from Tokyo's perspective, clearly they they felt that the United States wasn't forward leaning enough; right? So there's also been—as you know, there's also been some ambiguity in the American position on the (inaudible) Cocos (ph) Islands. (inaudible), as the Chinese refer to them.

We do not take a stance. Our official policy is we do not take a chance on the ultimate sovereignty of these islands. And that dates from the early 1970s, when both Taiwan and the PRC made a claim for those islands. But we do extend the protections of Article Five of the security treaty to territories administered by Japan.

So it's a very careful dance that our State Department does, the result being that the San Cocos (ph) Islands are covered by Article Five protections; right?

The Japanese government has never been comfortable with at that dance that we do. Before the Nixon administration, we always referred to the residual sovereignty of the Japanese over the (inaudible) Islands. But we shifted gears slightly when we returned those islands with the Okinawa (inaudible) Treaty.

So Japanese government officials will say you should just say that they're ours. Why did you shift gears? And that goes back to our recognition of China, to the conflicts dynamics in Asia in the 1970s. So today, they'd certainly like us to go back to that original position. So that's a kind of ambivalence on the Japanese side.

The fact is we don't have naval ships defending the San Cocos (ph). We have don't patrol the east China sea. The Japanese Coast Guard does. Its own Navy, in fact, stays well away from the disputed islands, from San Cocos (ph).  Even though they don't acknowledge they're disputed, they are careful about where the Japanese military goes.

In 2010, we had a small incident with a fishing troller captain. In the 2012, we had the introduction of Chinese forces patrolling these islands. And since then, I think most Japanese feel that the status quo has already clanged; right? We have—now you don't necessarily have the same schedule, but you have Chinese vessels in the waters of these islands. You have Japanese Coast Guard vessels, as well. What they don't want, however, is any kind of mishap or escalatory path that would then raise the threshold, which is getting to your question.

Secretary of State Clinton was absolutely clear in 2010, the alliance covers the San Cocos (ph). John Kerry, when he came in as Secretary of State, he very clearly reiterated the alliance covers the San Cocos (ph). President Obama last year went to Tokyo, and for the first time at the presidential level reiterated the American commitment. So our Senate has made a statement, we will accept no unilateral or coercive basis for trying to change the status quo.

So—but behind the scenes the United States government has also tried to convey to Xi Jinping and the leadership in Tokyo that any kind f escalatory dynamic, any kind of challenging that could lead to war, would not be in American interests; right?

So there's been a quiet conversation with both parties to this dispute. And that's also been part of the U.S. role. So it hasn't just been a deterrent role. Although it's an important part of it. It has also been persuasion for both parties; to walk down, to think about risk reduction measures, to think about confidence-building. And that's what came out of the (inaudible) meeting last November.

METZL: And Scott, last question before we open it up for everybody.

Presumably, I believe someday—I actually believe sooner rather than later—there will be a reunification of Korea. Barbara Demmick (ph) I think is in the audience, who's the real expert in all of this. But A, among the other two wonderful experts we have here on this topic.

But do you think that the U.S.-Korea alliance could survive a Korean reunification with China playing some kind of positive role in that process?

(UNKNOWN): I do think that the alliance could survive it. But I don't think it is—I think it's an open question. Before going into that, I just want to say—because listening to this conversation and thinking back on Danny Russell last night, how glad I am that I don't have his job.

Because I think that one of the challenges for the rebalance is really—there are three main challenges, I think. One is the necessity of providing assurance to allies. And it's constant. It has to be done every day. The second is a coordination challenge. And that is, as Euan was suggesting, everybody has a different sweet spot for where they want to see the U.S.-China relationship be; how much competition, how much cooperation.

And the third one I think that's in the back of everyone's minds—and this gets back to the Korean unification question—is sustainability. As China rises longer term, how does U.S. staying power look and where will it be? And so I think those things are gonna be on the mind of Koreans at the point of unification.

But I think that the other, you know, critical challenge for the region in the context of a unified Korean peninsula is that it basically creates a situation where everybody is gonna be waiting to see what Korea chooses; right? A unified Korea, ironically, could be more unstable than a divided Korea. Because both China and Japan see the Korean peninsula as critical to their security interests.

And so that is I think the issue that is going to be most challenging to navigate. I think an alliance with the United States may be able to play a contributing role in that conversation. But I think it's really complicated to know how it's actually gonna come out.

METZL: All right. Great topics raised in our preliminary conversation. I'm sure other things that we haven't addressed that—and would love to know what's on your mind and your—they usually say just a question. But happy to have a question or a quick reflection. But not too long. And we'll start with in the back with the blue tie.

QUESTION: Hi. I'm David (inaudible). And I wanted to ask you a little bit about Japan's interest in Southeast Asia. So it seems in recent years, Japanese investment and commercial and financial has been quite significant and quite welcomed into, you know, Burma, Vietnam, and so on and so forth. And it seems as a nonexpert somewhat as a—and as a counterbalance to China, right?

But how does Japanese increased presence there change the dynamic of this discussion going forward?

SMITH: It's a great question. I would hesitate to characterize Japanese interests in Southeast Asia as being by by China. It's there. They have also had—and since the beginning of the post-war period, and even earlier than that, of course if we go back to earlier points of history and sea lanes and things like that, there's a deep Japanese strategic interest in Southeast Asia.

And so part of the diplomatic work that the Japanese had to do in the 1950s was to go negotiate treaties with those southeastern countries that were not participants in San Francisco. So Japan has invested heavily, has deep trading relations throughout Southeast Asia. Japan was—after the ASEAN was formed in the early '90s, when ASEAN began to think about this role perhaps has a talk shop or confidence-building mechanism, when the ASEAN regional forum idea to the floor (ph), Japan was a huge supporter in the institutionalization of that dialogue.

So Japan's interest in Mr. Abe has been very conspicuous in going to the Southeast Asian countries. I think he's been to almost all of them...

(UNKNOWN): All ten...

(UNKNOWN): .. twice. All ten. At least once and some of them twice. He has really reinvigorated Japan's ties, both economically and strategically with the countries of Southeast Asia. So it is national, Japanese national interest, as opposed to rising China.

That being said, there is a context today in which there are many countries in Southeast Asia who are happy to see the Japanese be more activist in their economic relationships in particular. And I think that there is on the receiving side a little bit—if not a counterbalance to China, at least a little gratitude that there's more players at the table.

So I think that's an area we should expect the Japanese to continue to be active. I think we should just—there's a little bit of careful adjustment here in the AIIB for Japan as an opportunity. I would like them to see—them cautiously consider and move forward with.

I think I'd rather see the embrace of building institutions of cooperation between Japan and China throughout the region, to build those ties back up again, rather than to see them just devolve into competition in the region. So it's a natural place for Japan to be active.

METZL: Euan?

GRAHAM: Just to add to what Sheila had said. There's nothing new about Southeast Asia's place in Japan's economic and security policy at large. But there was a very conscious attempt for most of that post-war period not to have a military component to that. That's beginning to change now. And we are seeing the (inaudible) defense relationship, very small steps. Of course, Japan is acutely aware that if it steps in Southeast Asia, China will very quickly react and that it may end up losing more than it gains from investing in that kind of new relationship.

Nonetheless, there is added to that now a new alliance component in this. We're awaiting the new defense guidelines, U.S.-Japan defense guidelines to be announced. And I think it seems likely that there will be a push to—to redefine the alliance in more regional terms. And we've seen some indications recently with senior U.S. naval flag officers raising the idea of Japan playing a more direct role in the form of air patrols in the south China Sea.

Some pushback from the Japanese defense establishment, interestingly, on that. They say that we—you know, we have our hands full as it is. And I think the kind of Japanese military cultural default in the post-war period is not to say what you're doing, despite the very significant capability that Japan does have.

But I think in that alliance dynamic, as the U.S, for reasons of financial constraints and also the diversion of resource into the Middle East, is going to have an increasing requirement for allies to be present more in the South China Sea. And I think Japan, for its capabilities and the strength of the alliance and because of its own national interests in Southeast Asia and South China Sea, is gonna be at the receiving end of more of those demands.

METZL: Yeah. And it's very interesting how the number of players in this space is increasing. Not just the United States, but now Japan. But even India now, with its relationship to Vietnam and others. So it's getting a lot more complicated. All right.

Jeff?

QUESTION: Thank you, Jamie. Jeff Larente (ph).

I wonderer if you all could comment on the kind of (inaudible) ambiguous status of the diplomatically-unrecognized Chinese Republic on Taiwan. The degree of both for Washington and for the Japanese, the Koreans, and the various countries of Southeast Asia, Taiwan appears on the radar screen as a place of potential security interest, either covert or more overt kinds of defense ties.

And whether there is any sense that beyond the idea which is let nothing change, a sense of how in each of these quarters some kind of (inaudible) between (inaudible) and Beijing might proceed is that actually viewed as alarming as some, and just better keep the current ambiguous status of this not-insubstantial island and economy as it is.

METZL: And let me just add to that question. Because two accentuating factors, one is Taiwan's perception of the crackdown against the pro-democracy students in Hong Kong and China's failure to live up to its commitments about selection of their leaders.

And then linked to that is the very likely, at least from the perspective of now (ph), success of the TPP in—in next year's elections. Which it seems that we've had this sort of good ECFA calm relationship between—under—Taiwan under the KMT and China. But all of that looks like it's about to change. So who would like to—(inaudible)?

SMITH: Yeah. I can dive in on the Japan piece of the puzzle; right? And if you close your eyes and imagine the East China Sea, which I know all of you can do, you know, Taiwan is not very far away from those disputed islands. And Taiwan, of course, has a stake in those islands that are disputed.

Ma Ying-jeou (ph) leadership of Taiwan during both the 2010 and 2012 crisis between Beijing and Tokyo was very important. And it's largely because he took a very astute path. He decided for the first time that he would, you know, move towards Tokyo in concluding a fisheries (ph) treaty and literally opt out of the territorial dispute, thereby leaving it to be just a Beijing conversation; right?

That was very adroit (ph). He himself has a Ph.D., he wrote his Ph.D. thesis on these islands in the East China Sea. He also has an East China Sea peace proposal. So for how to reduce tensions, how to build community around that maritime region.

So all I'm saying is I think Tokyo and Beijing were quite lucky that they A, had the (inaudible) piece going well. And B, that they had Ma Ying-jeou (ph), who understood fundamentally what Taiwan's piece or stake in that was.

If you move beyond this, let's just say we do get a different leadership that is much more combative towards Beijing. That's just a big if. I don't know. I don't know what that means for the island dispute itself. I don't know for how that leadership in Taipei is going to rethink the fisheries (ph) treaty. I don't know what they're going to think about the island claim itself. But it will complicate a very slow progression by Beijing and Tokyo towards building some kind of confidence-building.

We shouldn't forget the fact that a Taiwan Straights crisis occurred in 1996 around an election. The United States will be watching it very carefully, clearly. Our role in sort of damping down the DPP's ambition for independence, and in demonstrating to Beijing that we would respond, signaling, at least, that we would respond, was very critical in 1996.

If we get—if we find ourselves working our way back there, the Washington policymakers will have a very complicated East China Sea to think about. Not just a Taiwan decision making process, but a much more complicated maritime space and regional space, I think.

METZL: Yeah. (inaudible).

QUESTION: Yeah, on just—on politics aside. I mean, on the most strategic note, it is almost paradoxical that Taiwan has sat there as a sort of quiet spot in the eye of the storm that's raged both in the East China Sea and in parallel, in the South China Sea. And I think we need to remember that it's intimately involved. I mean, China's claim arguably runs through Taiwan to the (inaudible). And in the South China Sea, Taiwan owned—until China built an artificial island that was bigger, the largest feature within the islands.

So it's—and, of course, the infamous (inaudible) dash (ph) line has its origins as a (inaudible) document. So it's there. It will have to be part of a solution too. And its status as a non-recognized—you know, it's not a state. The other southeast Asians don't have relations with it. But that will also eventually have to be a piece in the puzzle of how you move beyond the South China Sea tensions.

But for China to—in military strategic terms, Taiwan is enormously important. If we're talking about this island chain, that securities open access to the Pacific. And I don't think that should be forgotten or something that can be subsumed entirely between a relationship, cross (inaudible) relationship which goes well for a few years. But I think fundamental strategy will continue to occupy tension.

METZL: Yeah. That last is a very important point.

Yes?

QUESTION: (inaudible). Again, on Taiwan, I have questions related to the Taiwan Relations Act. How relevant is that today in securing (ph) the mood in the country against, you know, engagement overseas by—by GIs and what have you? Would you like to comment, anyone?

METZL: Anyone want to pick that up? Scott?

SNYDER: I'll pick a—I mean, this is really out of my area. But the TRA, it creates a legislative requirement for the United States to come to Taiwan's defense. OK. Well, in the event of—OK. I'm being corrected by the audience. So I better stop (inaudible). My understanding is that there's...

METZL: Yeah. This is the thing, (inaudible). If you're in the audience and you shout out a challenge to the speaker, then you get 30 seconds to give your response to this question. So if you give—and you were the next person on that question list. So your thoughts on the TRA, and then your question.

QUESTION: Let him—let him finish, please.

METZL: Well, he's—I think he deferred to you, so...

SMITH: That's what happens, sir, when you speak from the front row (ph).

METZL: Yeah, that's what happens. You speak up, it's you. You speak up, the mic will come to you...

(CROSSTALK)

METZL: But you had a question anyway.

SMITH: The mic will come to you. Where is the mike?

QUESTION: (inaudible). We had a security treaty with the Republic of China and Taiwan, from which we withdrew. At the time that the Congress passed the Taiwan Relations Act—which was mostly about how you carry on your business in Taiwan in the absence of diplomatic relations—there's a paragraph in there which says that we can sell them arms for their security.

And then there's a general thing about how we will take note of any threats to peace and security in the area. There's no statement about any kind of defense commitment to—to Taiwan.

METZL: Right. There's just a perception that we've allowed to maintain that...

(CROSSTALK)

QUESTION: Well, it isn't a perception. It's something that the Navy brings up in time when their budget is threatened to pretend that they have a commitment to defend Taiwan. But we don't have one.

METZL: There's not paper. But there's enough strategic ambiguity...

(UNKNOWN): (OFF-MIKE).

METZL: Yes?

(UNKNOWN): There is something in there about maintaining...

(CROSSTALK)

(UNKNOWN): ... defense of Japan...

(UNKNOWN): ... adequate defense of Taiwan. Not that we will come to Taiwan's rescue in the case of an attack...

(UNKNOWN): Provide for...

(UNKNOWN): ... but that we are...

SMITH: Providing. Yeah.

(CROSSTALK)

(UNKNOWN): No, no, no. That's the sales (ph).

(UNKNOWN): Well, it's not defined as sales.

(UNKNOWN): Yes, it is.

METZL: All right. So hold on.

(UNKNOWN): I'm gonna find the language.

METZL: All right. Good. This is I think the kind of conflict that we welcome at the Council on Foreign Relations. It makes these things more exciting. But we have—yes?

(CROSSTALK)

QUESTION: ... that any attempts to change the status quo...

(CROSSTALK)

QUESTION: ... in Taiwan's Strait would be viewed with grave concern by the United States.

(UNKNOWN): Right. Good. That's perfect.

(UNKNOWN): All right. (inaudible) all clear.

METZL: Now your questions. (inaudible).

(CROSSTALK)

QUESTION: I don't like this alliance system. The treaty with Japan is not a mutual security treaty. We defend them, and they let us come in to make money when the ships come in. But they have no commitment to defend us.

The treaty with Korea, the Koreans have made it absolutely clear that we are there to defend them but we cannot use it as basis to do anything else against China or anything else. The Koreans told the United States that they had informed China that if there's a disturbance in the north and they must go north to help their brothers, the American forces will not move north.

So I don't see any alliance system there. We've already disposed of Taiwan. The President can defend anything he wants to. But there isn't any alliance there.

And as for the Philippines, please. They threw us out of the bases. We should have withdrawn from the treaty. But the Navy thought we might want to go back. There's no plan to go back. There's no one in the Philippines that talks about having us come back there. You know, so the idea that we're going to go and defend some mud bank out in the South China Sea because of this treaty with the Philippines is patently absurd.

So we have alliances. And we have interests. But we don't have an alliance system.

METZL: Yeah. And I think that was the point that—that Scott was making.

All right Jeff, stop. Stop laughing.

SMITH: Go ahead, (inaudible).

METZL: So I think that that's the point that Scott was making earlier, is is this a system? And then also the point that you make is that the model is itself changing from these kind of heavy touch relationships like the Philippines used to be to light touch relationships like we have with the Philippines now and with Singapore...

(CROSSTALK)

(UNKNOWN): That's absolutely right. I think that the title over-delivers for this panel. And so you're right to point that out.

I do have the say that I don't know of any bound that the south Koreans have pledged to China on the disposition of U.S. forces in the event of a conflict on the Korean Peninsula.

(UNKNOWN): It wouldn't send U.S. forces north. Like (inaudible).

(UNKNOWN): I think the Chinese have expressed a desire not to see U.S. forces go north. But I know that there are specific scenarios where involving nuclear management, where the U.S. probably would do that regardless of any preference by Beijing.

METZL: Yeah, (inaudible).

SMITH: Is it OK?

METZL: Yes. I like that we've woken everybody up...

(CROSSTALK)

SMITH: (inaudible) you ready?

METZL: ... morning.

SMITH: No, two things. I think people—I mean, I take (inaudible)'s point about the use of the word "system." OK? But here's the point.

The point is we've got 60-some years of military cooperation relationships slightly organized differently in Japan around—organized differently in the Republic of Korea, organized differently in the Philippines. We have alliances. We have troops on the ground. To my knowledge, nobody really expected anybody to attack the Philippines. And therefore, there was no mindset of a conspicuous American guarantee.

But we've got enough troops on the ground there that we thought that we would deter aggression. Yes, they did ask us to leave (inaudible). And largely because that was a basing agreement. That was unsatisfactorily negotiated on our part as much as it was the Philippine political transformation/democratization process.

But I think it's a mistake to back away from the idea that America has a series of alliances in Asia to which we are committed and to which we provide strategic guarantees; that we will be involved should inflict emerge. And I think that's the phrase that I think we got from the Taiwan Relations Act very nicely, is we oppose the use of force to change the status quo. We oppose coercion in Asia. And I think I would be very cautious about undermining our language on the alliances, whichever alliance we're talking about. Because that's really why we were there.

The domestic debate that we have to have probably in this country though is to recognize that we don't have to call this a system. We don't have to link it to the Cold War. But we do have to understand what's at stake for us going forward in these military cooperative relationships with Asia. And I think we ought to be very clear that we do have—we have made promises, implicit or explicit, in the way that we've organized our military forces in the region. And that communicates—not only to our allies, but it communicates to others who may want to challenge our allies.

So just to be very careful about the way we talk about these things, those commitments have very important to the region.

METZL: Yeah. That's really essential.

Euan?

GRAHAM: Just on the military substance of the pattern for U.S. deployment, to emphasize this top-heaviness, that still Japan is the most important. And Korea, the problem that you mentioned, is that from a U.S. perspective, U.S. would like to have more flexibility about how it uses its own troops, as well as to get its allies more involved in a regional, more open scenario that would include the South China Sea.

Because I think the U.S. is also thinking not so much in the sort of siloed bilateral defense contingencies that we've been primarily talking about. That was the reference point in which the treaties were framed. But times have changed. And I think now we're looking at much more at a sort of Indo-Pacific-wide scenario in which the U.S. is looking for contributory forces.

That's the limitation on the ROK-U.S. treaty. Japan, I think that's really where the focus of U.S.—the revision of the guidelines is gonna come. Let's see how it shakes out when it's released.

Elsewhere, the other allies, the other treaties, are a patchwork. I mean, they reflect the peculiarities under which they were signed. In the Philippines' case, part of the problem is that it was signed before the Philippines even had its claims in (inaudible). So that's a legal wrinkle which gives, I think, the U.S. some separation in the form of its security guarantee. Although it does still apply to public vessels.

Even Australia and the relation—the wording of the treaty, interestingly, it doesn't require either side to—to commit their armed forces. It's merely to consult together and to act together to meet the common thread. Hasn't stopped the U.S. and Australia from fighting in every war since 1951.

METZL: We just have a few more minutes. But I would be failing in my job if the former U.S. ambassador to the Philippines and to Indonesia, if—who have both raised their hands, if I didn't give them just a couple—a few moments to say what's on their minds. And then we'll just go for some final thoughts from each of our panelists.

So Cameron (ph) and then Nick, and then the three of you. And we have three minutes.

(UNKNOWN): Cameron (inaudible)?

METZL: Yes.

QUESTION: Cameron (ph) (inaudible). Just to point—to repeat a point that was made. When we talk about alliances, you can look at NATO and it's essentially the same long. It's an obligation to consult. So I wouldn't go overboard in reading the Taiwan Relations Act and predicting what actually the significance would be in the case of certain circumstances. Thank you.

METZL: Yes. And now—and Nick Platz (ph). Yes?

QUESTION: Euan's right. This is a patchwork of relationships developed under completely different circumstances. I redid the renegotiation of the treaty in the Philippines, which was then rejected by the Philippian Senate and we were then (inaudible) out.

But the point I think that we should make, Herb (ph) is right; this is not a system. This is a scheme of relationships that all developed at different times and are now responding to a new phenomenon, which is the rise of China. So let's not use—let's not try to be too literal about the terms of these—these documents. But let's think of them in psychological terms in the broad context of rebalancing.

Containment is not an option with China. You can't contain China. But you can balance China. And this, how would I say, nonsystem scheme of relationships is very important in doing that.

METZL: Great point. So why—why don't we just go just straight across, just 30 seconds, final thoughts.

Starting with you, Euan.

GRAHAM: Well, I think I'll start where my—I'll finish where I started. I think Southeast Asia is the kind of the crucible, the melting pot. It's where things are less certain, more flexible. I think that's where the rebalance ultimately will be judged, whether it was a success or a failure.

And I don't think it'll be done on the narrow metric of whether a battalion of marines was relocated here or there for training purposes. It's among the much broader front of answering the sustainability question in which these broader consideration of the U.S. as an investment power within the Pacific needs to receive greater emphasis in which the TPP I think has assumed a very symbolic meaning. And I think a lot hangs on that.

METZL: Sheila?

SMITH: You know, I think it's clear from the conversation on this panel and earlier, you know, part of the challenge is being creative about how we think of the future with those allies traditionally; right? It's not just about military relationships. It has to be deeply about an economic engagement. And we didn't come back to TPP on this panel. But it is fundamentally one of the pillars of our engagement in the Asia Pacific region.

There are also other domains. And there's this really interesting new book I've been reading. Part dystopian (ph) thriller, part love story. It's called the "Genesis Code." And it looks at the American-Chinese genetic arms race. So I recommend it to you, by our presider and moderator...

(CROSSTALK)

SMITH: But seriously speaking, in addition to buying Jamie's book, we have to think creatively. Because we live in a different world. We don't live in 1950 or 1990s with the Philippines or Japan, Korea, Australia. This is collective effort at building a new Asia-Pacific. And we have do it in the most creative way possible. But we can't allow it to undermine the relationships that we've built for more decades.

METZL: Absolutely.

Scott, final word.

SNYDER: I'm sure that in a decade we can all come back and debate whether or not we have a U.S. alliance system and what its future is.

METZL: Terrific. Well, thank you all very, very much. And thank you to our panelists.

END

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