Trade and industry, International relations, National security | Asia, East Asia

7 May 2018

A rapidly-changing region facing big questions on North Korea, denuclearisation, trade, and a rising and assertive China, sets the stage for a tricky Trilateral Summit, Stephen Nagy writes.

Since the leaders of China, Japan and South Korea last met for a Trilateral Summit, the region has changed dramatically.

In China, President Xi Jinping has removed term limits, built and militarised islands with cruise missiles in the South China Sea and openly rejected the decision by the Permanent Court of Arbitration over China’s sovereignty in the region. His position as Chinese leader is the strongest since Mao Zedong but he still faces myriad challenges at home and abroad.

In Japan, Prime Minister Shinzo Abe has won four consecutive elections, the economy has grown in eight successive quarters and unemployment is at record lows. Japan has pursued a dual strategy of tightening relations with the US through the US-Japan alliance while at the same time defending and leading multilateralism through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and signing the Japan-EU EPA.

Yet despite these successes, Abe faces a political insurgency at home, with scandals emboldening political opponents and growing concerns about the Trump Administration following the implementation of steel tariffs and a lack of transparency in Washington’s approach to North Korea.

More on this: The Inter-Korean Summit: what’s next?

For South Korea, the three years since the last summit has seen three different presidents, two of which are now serving jail time. There was THAAD blowback from the Chinese in 2017, while North Korea’s Olympic diplomacy and the Inter-Korean Summit have brought both hope and scepticism about the trajectory of inter-Korean relations.

President Moon Jae-in is currently riding a wave of domestic and international support for a peaceful resolution to the North Korean challenge, even as his government struggles to manage economic expectations and balance regional relations with its alliance partner the US.

China, Japan and South Korea will have three major issues on the table at the summit.

First, Moon will brief his colleagues on the recent Inter-Korean Summit and plans for moving from optimistic optics to real progress. Xi and Abe will be considering how their countries’ interests will be represented in the unfolding North Korean denuclearisation drama. They will be also looking for any clues as to what the upcoming Trump-Kim Summit will include.

China will be seeking assurance that Seoul and Pyongyang’s engagement will include preserving Beijing’s influence with North Korea. Japan, on the other hand, will convey to Moon that denuclearisation should also include short, mid and long-range missile systems, biological and chemical weapons as well as submarine launch platforms.

Abe will also press Moon on the politically popular yet likely unresolvable abducted Japanese that still may be alive in the North.

The second issue that the trio will be interested in is trade. As the Trump Administration continues to press an “American First” agenda, all three countries will need to stress their joint support for free trade.

More on this: Rapid Round-up: Inter-Korean Summit

Here is where the challenge lies. Japan favours the CPTPP, and preferably a CPTPP which includes the US and additional members who agree to protect intellectual property rights, have strong environmental regulation, support a limited role for state-owned enterprises, and have high labour standards.

Japan continues to champion the trade agreement even as the US continues to waver in its support for it, unless Trump can negotiate a substantially better deal.

While the deal remains open to China, it would be a difficult task for Beijing to meet the standards of the agreement without substantial changes to how the country’s economy is run.

South Korea, with the North Korean issue in mind, renegotiated the US-Korea Free Trade Agreement (KORUS) to placate the Trump Administration and ensure bilateral relations would not complicate the engagement strategy with the North.

Notwithstanding the renegotiation, the South Korean government is surveying the potential impact on the national economy if it were to join the CPTPP. The high standards of the agreement would likely accrue benefits to the South Korean economy, as many of its strengths mirror the rationale for Japan’s participation in the agreement. Importantly, joining the agreement can help the Moon government buffer the economic leverage that Beijing has over the South Korean economy.

On the heels of the US-China Trade Talks that ended with key differences still unresolved, Xi will be looking for a strategy to bring to life his speech at Davos in 2017, in which he stressed: “We must promote trade and investment, liberalisation and facilitation through opening up – and say no to protectionism.”

More on this: Finding China's ‘Community of Common Destiny’

With his South Korean and Japanese counterparts looking for ways to insulate their economies from political disagreements with Beijing, China may not find willing partners to support the country’s signature economic policy, the Belt and Road Initiative.

Beijing has identified Washington and Pyongyang as major risks in the short to medium term, and has invested heavily in resetting both Sino-South Korean and Sino-Japanese relations. The Trilateral Summit may be an opportunity for China to commit to that reset through unanimity on broad trade visions, recommitting to the China-Japan-Korea FTA, or accelerating negotiations for the Regional Comprehensive Economic Partnership (RCEP).

The third area the three leaders will be focusing on at the Trilateral Summit is charting a more positive relationship. Premier Li Keqiang’s visit sets the stage for Abe visiting Beijing later in the year and a reciprocal visit by Xi in early 2019. These visits would be steps in the right direction if the leaders are sincere in their intentions to recalibrate relations.

Despite the resumption of the talks, we should be realistic about the degree of compromise and cooperation that can take place. On non-traditional security issues such as the environment, disaster risk reduction, and transnational diseases there will be solidarity and investment. In contrast, solidarity on resolving the North Korean issue is complicated by regional politics, a deepening Sino-US rivalry and historical issues in the region. Exactly what kind of permanent peace each country is seeking on the peninsula could be a difficult issue on which to find common ground.

More face-to-face meetings of leaders will no doubt contribute to better communication and can set the tone as to how each countries’ citizens should be thinking about regional relations. But bilateral and trilateral meetings must be followed up by changes in rhetoric and behaviour. Mutual respect means equality, not hierarchy.

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4 Responses

  1. Jun Oikawa says:

    It is ironic and funny that China is the one here trying to present itself as the supporter of free trade, while the US seems to be regressing towards bilateralism from the system that it created and still largely owns.

    I’m also interested in the effect of today’s announcement by Trump that the US will leave the Iranian deal on the Korean issue.

  2. Nanaka says:

    In this trilateral summit, three countries avoid territory and historical issues in order not to provoke negative influence on subsequent relation and also public. However, it was doubtful why Japanese government expressed the issue about unsolved abducted Japanese in North Korea. This can be sensitive issue, because it would be serious problem if those abducted people could not come back. Similar to Tiananmen Massacre, North Korea might face strong condemnation by other countries. If this happened, it would be hindrance for further amicable relationship with the world.

  3. Saya Ishihara says:

    Because of American first agenda, the cooperation and compromise between Japan, China, and Korea seem to be a positive direction for the stakeholders. Although the three countries have respective interests, the shared pursuit of free trade may be the significant key to developing the economy in the region. I am curious if China will no longer demand apologies for the historical incidents from Japan and put the historical issues aside as it gradually shifts its behavior to reset the Sino-Japan relations.

  4. Tsuyoshi Itosu says:

    I think it is easier to cooperate in nontraditional security than other parts because it is geographically specific and cannot have alternative countries. In economical relationships, two countries trading with each other can change each other to another country if the condition allows them to do so. However, the nontraditional security is basically geographical and nobody can replace a place of a country. Therefore, countries in the region have to cooperate to prevent diseases or natural disasters. There is no alternative so countries are easy to take part in a cooperation. When they cooperate suitably, they will get the maximum benefits.

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