Published as part of the "America's Alliances with Japan and Korea in a Changing Northeast Asia" Research Project.

Reprint from Living with China: U.S.-China Relations in the Twenty-First Century (New York: W.W.Norton, 1997).

By almost any criterion of success—be it cost-effectiveness, risk-reward ratio, multiplier
effects, or sheer longevity, the Japan America Security Alliance (JASA) stands out as one of
the most successful alliances in twentieth century history. For the United States, chief
architect of a global network of military relationships, JASA is arguably the most important
of its many bilateral alliances. In terms of historic impact, JASA is comparable to the North
Atlantic Treaty Organization (NATO), a multilateral alliance that restructured the European
security landscape in 1949. For nearly a half-century, JASA and NATO have functioned
as the bedrock on which the Cold War security systems of Asia and Europe have been
constructed.

Published as part of the "America's Alliances with Japan and Korea in a Changing Northeast Asia" Research Project.

This study examines the likely security consequences of the continued growth in energy consumption in East Asia, and in particular:

security.

dependencies and insecurities.

The study concludes that:

1. Energy supplies for East Asian economic growth, as well as for other anticipated energy needs in the world, can be available at prices that will not set growth back provided that international markets for fuels, exports, technologies, and capital continue to operate.

2. The main source of insecurity connected with energy use will be the anticipation, on the part of countries partially or wholly dependent on imports of fuels and energy technologies, of political developments that would interfere with either energy-related imports or the exports needed to pay for them.

3. Economic and technical solutions to the problems posed by economic and energy consumption growth in East Asia and elsewhere, and by their regional and global environmental impacts, exist if the political framework is available to carry them out. Seeking out and implementing those solutions would serve U.S. leadership and prosperity. As a result, a principal goal of U.S. policies will be to make politically possible the combination of economic and security policies needed to provide that framework. These policies are highly interactive: failure of economic policies, or even misperception of the nature and impact of economic policies, can greatly heighten security problems.

This APARC discussion series clearly recognizes that the international and regional condi- tions of the post–Cold War era raise new and vexing questions about the future of the United States and its alliance relations in Northeast Asia. Today I would like to raise and begin to analyze a specific subset of questions related to proliferation, which I believe have a direct bearing on the future security situation in the region—and, more importantly for us, the U.S. alliances there. I do not think that this subject receives sustained analysis, so I would like to try to initiate that process. I am at the outset of putting this research together and welcome the opportunity to hear your thoughts and criticisms as the study evolves.

In this presentation, I take a preliminary look at how issues of proliferation affect the present and future disposition of U.S. alliances in Northeast Asia. In particular, I hope to answer three questions. First, how do issues of proliferation either weaken or strengthen U.S. relations with its allies in Northeast Asia? Second, how do issues of proliferation affect the overall security situation there? And third, how does the security situation, in turn, shape the rationale or justification for continued U.S. alliance presence in the region? For this presenta- tion, when I speak of proliferation I generally refer to the spread of nuclear, missile, and advanced conventional weapon capabilities. I will not address issues related to chemical and biological weapons, although I do believe that these are a concern. Such a definition obviously casts a rather wide net, and in a presentation such as this at a relatively early stage of the research, I want to keep my focus relatively narrow. Thus, I will not address what I consider global issues of nonproliferation, such as the Non-Proliferation Treaty, the Chemical Weapons Convention, or the Comprehensive Test Ban Treaty. Rather, I want to focus more narrowly on issues of specific relevance to Northeast Asia.

In trying to keep this focus narrow, then, I will proceed in four steps. First, I wish to briefly consider the contemporary trends of proliferation, around the globe and regionally, which have a bearing on the security situation in Northeast Asia. Second, I want to discuss three types of proliferation concerns and show how they intersect and interact with U.S. alliance relations. The first is nuclear proliferation, and here I would like to look at alliance relations in the context of the Korean Peninsula Energy Development Organization, or KEDO. On the issue of the proliferation of theater missile defenses (TMD), I want to look specifically at the development of these capabilities by South Korea and Japan. And third, on the issue of ballistic missile proliferation, I would like to consider the efforts by South Korea to develop a more powerful ballistic missile force. In the third part of the talk, I would like to address how these and other proliferation issues affect relations with China, because future U.S. alliance relations will be shaped in no small measure by Chinese reactions to them. In the fourth and concluding section of the talk, I will try to look ahead and assess how these several developments affect relations between the United States and its allies in Northeast Asia; how they influence security in the region; and how U.S. alliance relations in Northeast Asia might be readjusted in the future so that cooperation and nonproliferation can help justify a continued U.S. presence in the region, simultaneously contributing to long-term regional confidence and stability.

Published as part of the "America's Alliances with Japan and Korea in a Changing Northeast Asia" Research Project.

This discussion focuses on U.S.-Japan and U.S.-Korea relations and how the two interact. The U.S.-Japan review of the 1978 Defense Guidelines also will be considered, in terms of what it does and does not entail and in terms of its application to the security of the Korean peninsula and, more broadly, Asia.

An underlying theme of this presentation is that the U.S.-Japan and U.S.-Korea relationships can survive and prosper only if the United States, Japan, and Korea share some degree of confluence of views on relations with China. There are common objectives in Northeast Asia shared not only by the United States, Japan, and Korea, but by China, Russia, and perhaps even North Korea. Many of these objectives concern the Korean peninsula, where all of the powers want stability and no one wants to see war. From a theoretical viewpoint, everyone is looking toward a "soft landing" and eventual peaceful reunification. Sometimes the visceral South Korean view seems to differ, and some of the Republic of Korea's policies may be in contradiction with the stated desirable outcome; this may cause tension in the U.S.-Korea alliance in the future.

The desire for a soft landing does not mean that the major powers are pushing to hasten reunification. Ironically, the country least anxious to see it, namely China, is the one least often accused of trying to prolong separation of the two Koreas. South Koreans accuse Japan of trying to keep Korea divided, and whenever the United States talks with North Korea, it is similarly charged. That is not the policy direction of either Japan or the United States; in fact, the Koreans seem not to need help from the outside to be hostile to each other.

Published as part of the "America's Alliances with Japan and Korea in a Changing Northeast Asia" Research Project.

There are huge discrepancies between the official Chinese and U.S. estimates of the bilateral trade balance. The discrepancies are caused by different treatments accorded to re-exports through Hong Kong, re-export markups, and trade in services. Deficit-shifting between China, on the one hand, and Hong Kong and Taiwan, on the other, due to direct investment in China from Taiwan and Hong Kong, is partly responsible for the growth in the China–United States bilateral trade deficit. The 1995 China–United States bilateral balance of trade in goods and services, adjusted by both re-exports and re-export markups, may be estimated as US$23.3 billion, a large deficit but considerably smaller than the often-cited official U.S. figure of US$33.8 billion.

One of the most persistent and important questions in international comparisons of health systems pertains to the wide divergence in costs between countries. Japan has significantly lower per capita health care costs than does the United States, despite having a fee-for-service reimbursement system and universal coverage, and aggressively purchasing and utilizing equipment-embodied medical technologies. 1 One important factor in the increase in American health care costs over time has been the substitution of surgical intervention for medical treatment. 2 This leads us to consider differential rates of surgery as a potential explanation for divergent cost performances. Indeed, although Japan has one-half the inpatient admission rate of the United States, it has only one-quarter the surgery rate per capita