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This paper is examines the evolution of Japan’s capital markets and the related regulatory reforms after the Global Financial Crisis. We start by looking at the importance of capital markets in the Japanese financial system. We study how the size of financial flows through capital markets relative to those through the banking sector changed since the 1980s in Section 2. Then, in Section 3, we look at how Japan’s financial system responded to the Global Financial Crisis. We find that the disruption of the financial system in Japan was small. Section 4 then surveys the financial regulatory changes in Japan since the Global Financial Crisis. While the Japanese regulators tightened the regulation to improve the financial stability as the regulators in the U.S. and Europe did, they also continued the efforts to develop capital markets in Japan. The efforts continue and receive strong endorsement from Abenomics, which put an emphasis on economic structural reform to restore growth in Japan. We examine the capital market policies in Abenomics in Section 5. Section 6 concludes.

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Booseung Chang joins the Walter H. Shorenstein Asia-Pacific Research Center as Shorenstein Postdoctoral Fellow for the 2015-16 year.  His research interests span comparative foreign policy and policymaking process.

Currently, he is working on two projects. One deals with application of game-theoretic approaches to the inter-Korean relations. Specifically, he is interested in how the tools of the game theory can contribute to the improvement of the cooperation as well as the security in the Korean peninsula. The topic of the other article will be the change of Japanese foreign policy. The goal of this article is to shed light on the implications of the recent change in Japanese security-related laws and to measure its domestic, regional, and global impact.

His dissertation, which he seeks to build upon, is titled “The Sources of Japanese Conduct: Asymmetric Security Dependence, Role Conceptions, and the Reactive Behavior in response to U.S. Demands.” It is a qualitative comparative case study of how key U.S. allies in Asia – namely Japan and South Korea – and major powers in Europe - the United Kingdom and France - responded to the U.S.-led Persian Gulf War and the Iraq War.

Chang completed his doctorate in political science from the Paul H. Nitze School of Advanced International Studies (SAIS) of Johns Hopkins University in 2014.

Before joining the Walter H. Shorenstein Asia-Pacific Research Center, he worked for the South Korean Foreign Service for 15 years between 2000 and 2015. During the service, he mostly worked on Northeast Asian affairs including the North Korean nuclear issue. He spent three years in the embassy in Beijing and two and a half years in the consulate general in Vladivostok.

 

Philippines Conference RoomEncina Hall, 3rd Floor616 Serra StreetStanford, CA 94305
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The fifteenth session of the Korea-U.S. West Coast Strategic Forum, held in Korea on November 17, 2015, convened senior South Korean and American policymakers, scholars and regional experts to discuss North Korea policy and recent developments on the Korean Peninsula. Hosted by the Korea Program at the Walter H. Shorenstein Asia-Pacific Research Center at Stanford University, the Forum is also supported by the Sejong Institute.

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Senior Military Fellow John Chu was promoted to the rank of colonel in the U.S. Army at Stanford last Friday, a position selectively afforded for distinguished service and leadership. Colleagues and Stanford affiliates attended the afternoon ceremony marking the occasion.

Lt. Gen. (Ret.) Karl Eikenberry led the proceedings and recognized Chu’s accomplishments in the Army and his tenure as a researcher at Stanford’s Freeman Spogli Institute for International Studies (FSI).

“We look over the course of John’s life and where he’s been, and it says so much good about him and the strengths of the United States of America,” Eikenberry said.

“As threats have changed, doctrine has changed and our national security has changed, John has continued to adapt. It says a great deal about him, our services and our country that he has been able to steadily make those shifts over the course of his career.”

Chu was born in Seoul, South Korea, and raised in the United States. He attended West Point and later achieved advanced degrees in environmental engineering and national security. Chu has had three tours of duty in Korea and served in Iraq as staff at the highest strategic level, among other posts.

At Stanford, Chu has been studying U.S. policy toward North Korea and strategic deterrence on the Korea Peninsula as a fellow at FSI’s Walter H. Shorenstein Asia-Pacific Research Center during the current academic year.

The fellowship program, supported by the U.S.-Asia Security Initiative and the Center for International Security and Cooperation, provides military officers an opportunity for self-directed study under the tutelage of Stanford scholars. The program started under former U.S. Secretary of Defense William Perry. Five fellows came to campus this year; their brief bios can be found here.

Chu thanked his wife of eighteen years, Tina, and expressed gratitude to everyone who guided him over the years.

“You are the real heroes – the people I’ve worked with throughout my career,” Chu said, addressing the audience. “It is you that really deserves all the recognition, for I would not be here today without the support of many.”

Chu expects to deploy to Afghanistan as his follow-on assignment.

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Senior Military Fellow John Chu (right) is promoted to colonel in the U.S. Army in a ceremony at Stanford on Dec. 11, 2015. Lt. Gen. (Ret.) Karl Eikenberry (left) led the proceedings.
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A conference that honored the life and scholarly contributions of Stanford economist Masahiko Aoki was held at Stanford. Dozens of friends, family and community members paid tribute to Aoki, the Henri and Tomoye Takahashi Professor of Japanese Studies and Professor of Economics, emeritus, who died in July at the age of 77.

Eleven renowned economists and social scientists gave talks on Aoki’s extensive fields of research in economic theory, institutional analysis, corporate governance, and the Japanese and Chinese economies at the Dec. 4 conference, which was followed by a memorial ceremony the next day.

“When we contacted people to speak at this conference, few people turned us down,” said Stanford professor Takeo Hoshi. “The reason for this is Masa. It shows how much Masa was respected and how much his work is valued.”

The events were hosted by the Japan Program at the Walter H. Shorenstein Asia-Pacific Research Center, the Freeman Spogli Institute for International Studies (FSI), Graduate School of Business, Department of Economics and the Stanford Institute for Economic Policy Research (SIEPR).

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Aoki came to Stanford in 1967 as an assistant professor, held faculty appointments at Kyoto University and Harvard, and returned to Stanford in 1984. He retired to emeritus status at Stanford in 2005.

Throughout the conference, Aoki was described as an astute professor and colleague, valuable mentor and loyal friend by the many speakers and participants who shared works, stories and multimedia featuring their interactions with Aoki.

Aoki pioneered the field of comparative institutional analysis (CIA) with a team of scholars at Stanford: Avner Greif, John Litwack, Paul Milgrom and Yingyi Qian, among others. CIA analyzes and compares different institutions that evolve to regulate different societies.

Masahiko Aoki (far left) is pictured with colleagues on the Stanford campus in the late 1960s.

“Masa had a good background in looking at the economy as a whole, financial institutions as a whole – not just how numbers or actors economically interact – but also the people who interact within a given institutional framework,” said Koichi Hamada, a professor emeritus at Yale University. 

“Masa had a good background in looking at the economy as a whole, financial institutions as a whole – not just how numbers or actors economically interact…”

-Koichi Hamada, Yale University

Aoki applied a systematic lens to everything he studied, a “take society as a total entity” approach, Hamada said.

Aoki grew up in Japan, and developed a deep interest in Japanese politics at an early age. He was actively involved in student movements in the early 1960s, at the heart of which was a campaign against a controversial U.S.-Japan security treaty. China became another great interest of his as the country began to undergo economic transformation and modernization.

Throughout his career, Aoki traveled to Japan and China often, and sought to better inform policy debates by engaging scholars, government leaders and journalists there.

He believed in sharing lessons learned from his own scholarly analyses on what constitute institutions, particularly the “people” aspects – the employees, their cognitive abilities and levels of participation.

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Top left to right: Yingyi Qian of Tsinghau University talks with Avner Greif of Stanford University and Hugh Patrick of Columbia University. / Koichi Hamada of Yale University delivers his remarks titled "Masahiko Aoki: A Social Scientist." Bottom: Reiko Aoki, the wife of Masahiko Aoki, listens in to Kenneth Arrow, a professor emeritus at Stanford University. Credit: Rod Searcey


Aoki was not only a scholar of institutions but also a builder of them.

In 2005, Aoki helped oversee the development of the Center for Industrial Development and Environmental Governance at Tsinghua University in Beijing, which held numerous roundtables in its first decade of existence, and continues to this day.

“Amid a time of diplomatic tensions between China and Japan…Masa was able to bring Japanese, Chinese and American economists together to study and do research,” said Yingyi Qian, dean and professor at the school of economics and management at Tsinghua.

At Stanford, Aoki played a leading role in the creation of the Stanford Japan Center and a multi-day conference that convened annually in Kyoto on issues of mutual concern between Asia-Pacific countries and the United States.

Masa Aoki’s legacy will serve as an integral guidepost for many years to come. May his soul rest in peace.

-Kotaro Suzumura, Hitotsubashi University

Earlier this year, Aoki was hospitalized for lung disease. Even at that stage, he worked tirelessly to revise a paper that examines the institutional development of China and Japan in the late 19th to early 20th centuries.

That paper titled, “Three-person game of institutional resilience versus transition: A model and China-Japan comparative history,” was presented at the conference by Jiahua Che, one of two scholars that Aoki asked to finish and publish the work.

Aoki was also fondly remembered for his mentorship of students at Stanford and other universities he taught at.

“He was an original and unique professor – quite different from others that I’ve met in many respects. He was generous with his time, not hierarchical,” said Miguel Angel Garcia Cestona, who studied for a doctorate at Stanford and now teaches at the Universitat Autonoma de Barcelona.

Garcia Cestona, among other former students, spoke of Aoki as a friend and shared memories of their former professor hosting them at his home.


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Masahiko Aoki in Northern California, 2014.


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Stanford professor Takeo Hoshi opens a day-long conference at Stanford celebrating the life and scholarly work of Masahiko Aoki, Dec. 4, 2015.
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Negotiators from 12 Pacific Rim countries recently reached an agreement on the Trans-Pacific Partnership (TPP), a sweeping trade pact that has been promoted by the Obama administration as a high-quality, next-generation deal that will set standards for international trade for years to come. While noting the agreement still requires ratification by each member state, Stanford scholars believe that the TPP will be approved and reshape not only trade but also security relations in the Asia-Pacific region and beyond.

 

The TPP negotiations originally began as an expansion of the Trans-Pacific Economic Partnership Agreement signed by Brunei, Chile, New Zealand and Singapore in 2005, and then took on broader significance in 2008 when the United States expressed interest. The number of members eventually grew to include the other North American Free Trade Agreement (NAFTA) economies of Canada and Mexico, as well as Australia, Peru, Vietnam, Malaysia and Japan. Even before the agreement was finalized, leaders of many other Asia-Pacific countries expressed interest in joining the next round of negotiations, including South Korea, Taiwan, the Philippines, Colombia, Thailand and most recently, Indonesia.

 

leaders of tpp member states A summit with leaders of the member states of the Trans-Pacific Strategic Economic Partnership Agreement (TPP). Pictured, from left, are Naoto Kan (Japan), Nguyễn Minh Triết (Vietnam), Julia Gillard (Australia), Sebastián Piñera (Chile), Lee Hsien Loong (Singapore), Barack Obama (United States), John Key (New Zealand), Hassanal Bolkiah (Brunei), Alan García (Peru), and Muhyiddin Yassin (Malaysia). Six of these leaders represent countries that are currently negotiating to join the group.

The appeal of the TPP in the region is twofold. First, the repeated failure of new trade talks at the World Trade Organization (WTO) has forced countries seeking greater trade liberalization to pursue it through other bilateral or regional multilateral negotiations. Second, in the Asia-Pacific region, the number of these agreements has rapidly multiplied, creating myriad different standards, procedures and tariff rates that raise the costs of doing business across state borders and inhibit international trade and investment.

 

The TPP offers the prospect of a common set of rules governing investment, production and exchange across all member states, with significant improvements in economic efficiency. In addition, the danger of being excluded from a new trade regime that includes a huge share of the region’s economic activity has created a sense of urgency to seek membership from those countries not in the initial round of negotiations. By far the most conspicuous absence among the TPP members is China, which is now the world’s second-largest economy and a significant trading partner of all current member states.

 

The Trans-Pacific Partnership has been a research focus at the Freeman Spogli Institute for International Studies.

 

The Walter H. Shorenstein Asia-Pacific Research Center has organized several events exploring aspects of the TPP, and the Taiwan Democracy Project in the Center on Democracy, Development, and the Rule of Law held a conference in 2013 that examined the TPP from a Taiwanese perspective. The conference produced a comprehensive report on the topic, and an audio recording of an earlier Shorenstein APARC panel event was made available online. Now that negotiations have concluded, the Taiwan Democracy Project will revisit the topic in an upcoming conference on Feb. 9.

 

With the public release of the agreement in early October, three noted experts from Stanford University, Thomas Fingar, Michael Armacost, and Donald Emmerson, offered their analysis of the TPP’s prospects for ratification and its impact on the Asia-Pacific region.

 

Now that the agreement has been published, what is significant about the TPP? What does it mean for China?

 

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The TPP is a big deal for many reasons, perhaps the most important of which is that it will provide the impetus and the template for concluding the Trans-Atlantic Trade and Investment Partnership (TTIP) and myriad other regional and mini-lateral trade negotiations initiated in response to the failure of the Doha Round of WTO reform. As with all trade agreements, there will be winners and losers, pain will be local and benefits diffuse, and critics will find much to criticize. But the agreement is likely to be ratified and its provisions will affect corporate strategies, investment decisions and globalized production chains. The fact that North America (the United States, Canada and Mexico) are parties to the TPP virtually assures that the globally important NAFTA group will not accept terms in TTIP or other negotiations that are incompatible with the TPP because NAFTA governments and companies do not want to cope with multiple standards, requirements, and procedures. The same is true of other major trading states and international firms, so the TPP will quickly become the new standard for “everyone” wishing to take advantage of opportunities in a globalized world.

This means that the TPP will serve as a—the—decisive building block for beyond-WTO trade arrangements. Without success in the TPP (or TTIP, which also has the size and importance to have become the new global standard if it had been concluded before the TPP) negotiations, there was a danger that the advantages of an integrated global trading system would be degraded by adoption of multiple and partially incompatible sub-regional agreements. Now those negotiating bilateral and mini-lateral agreements are likely to strive for consistency with the requirements adopted by key trading nations and the firms based in them.

The TPP is often but erroneously described as part of a U.S. effort to contain or constrain China. It isn’t. The United States should and will seek to bring China into the TPP, not to exclude it. I anticipate that Beijing will join together with South Korea, Indonesia, and possibly other states that are not yet members.

 

Thomas Fingar is a Shorenstein APARC Distinguished in the Freeman Spogli Institute for International Studies. He served previously as assistant secretary of the State Department’s Bureau of Intelligence and Research, principal deputy assistant secretary, deputy assistant secretary for analysis, director of the Office of Analysis for East Asia and the Pacific, and chief of the China Division.

 

Does the TPP carry security benefits? What are possible consequences for the U.S.-Japan relationship?

 

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The TPP is a trade agreement, not a security pact. Security is generally a predicate for growth and trade. It does not thrive amidst turmoil, let alone conflict. But with greater economic interdependence, the incentives for avoiding conflict increase. And fortuitously Asia remains an unusually peaceful region despite some growing tensions between China and its neighbors.

The TPP agreement is certainly an integral feature of the Obama administration’s effort to “rebalance” toward the Asia-Pacific region. It embeds the United States in a new institution whose membership, I believe, is destined to grow. America’s engagement in the region is a source of reassurance to our friends and allies there. The United States has been bolstering its alliance with Japan, and this agreement will add a broader framework to the U.S. alliance, which was established through the Treaty of Mutual Cooperation and Security, and which contains a specific clause encouraging expanded economic collaboration.

I regret that selling the agreement publicly has included some explicitly anti-Chinese features such as the claim that if the United States and others don’t write the rules of trade, China will. The TPP is and should be open to new members who are prepared to live up to its requirements and that includes China.

 

Michael H. Armacost is a Shorenstein APARC Distinguished Fellow in the Freeman Spogli Institute for International Studies. He held a 24-year career in the public service, including having served as U.S. ambassador to Japan and the Philippines.

 

How does the TPP fit into the context of Southeast Asia and its possible alternative arrangements for economic cooperation in the Asia-Pacific region?

 

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In strictly economic terms, there is no exact alternative to the distinctively comprehensive and intrusive TPP. In loosely economic but mainly geopolitical terms, however, a competitor does exist: the Regional Comprehensive Economic Partnership (RCEP). The United States is in the TPP. China is not. In the RCEP, the reverse is true. The United States has propelled the TPP. China and the Association of Southeast Asian Nations (ASEAN) are driving the formation of RCEP by all ten ASEAN states plus Australia, China, India, Japan, New Zealand and South Korea.

Compared with the TPP, RCEP is far less robust. RCEP is mainly about straightening the overlapping and sometimes inconsistent free trade agreements that already complicate Asian regionalism—the tangled contents of Asia’s “noodle bowl” of overlapping FTAs. (Trade agreements in the Asia-Pacific have burgeoned from around 60 ten years ago to some 300 today.) Under pressure from the more detailed and thoroughgoing TPP, RCEP’s would-be progenitors have been trying to expand their agenda to include more intrusive proposals. Partly for that reason, observers are pessimistic that RCEP’s negotiators will be able to proclaim its successful completion before the end of 2015.

ASEAN is divided. Myanmar, Cambodia, Indonesia, Laos, the Philippines, and Thailand are inside RCEP but outside the TPP. The other four ASEAN members—Brunei, Malaysia, Singapore, and Vietnam—enjoy the advantage of sitting at both negotiating tables. If only one of the two projected partnerships fails, these four states would still have the other arrangement to fall back on, and so much the better for them if both schemes succeed. It is partly for this reason that varying degrees of interest in joining the TPP have been expressed by five of the six non-TPP states in Southeast Asia. The exception is Myanmar, but once the structure and character of its new government have been clarified, its leaders too may wish to consider the TPP. Even China’s initially hostile view of the TPP has softened.

Given the market-favoring and regulation stipulations of the TPP, new entrants may be unwilling to accept its detailed, full-spectrum rules. But the Doha Round is dead, and the proposal to replace it with a scaled-down “Global Recovery Round” has gone nowhere. For the time being, the best one can hope for in the Asia-Pacific region is a successful TPP that China could eventually join, or a successful RCEP that could someday welcome the United States, or the birth of both arrangements followed by effective steps to render them complementary rather than competitive.


Donald K. Emmerson is director of the Southeast Asia Program at the Walter H. Shorenstein Asia-Pacific Research Center in the Freeman Spogli Institute for International Studies, where he is also affiliated with the Center for Democracy, Development, and the Rule of Law and the Abbasi Program in Islamic Studies.

 

Interested in joining the conversation? The Taiwan Democracy Project will revisit this topic on Feb. 9. The one-day symposium will bring together scholars and practitioners to reconsider Taiwan's prospects for entry into the Trans-Pacific Partnership. RSVP here today.

 

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Listen to the audio from the event "The Trans-Pacific Partnership (TPP) -- A New Order for the Asia-Pacific?" with Stanford scholars Donald Emmerson, Thomas Fingar, Daniel Sneider and Kathleen Stephens.

 

 

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A podcast from the book event on Jan. 15 is available at the link above. An earlier interview with author Michael Armacost was first published in Oct. 2015 and is reposted below.

When it comes to elections, politics can supersede strategy. But what is often overlooked is the process through which the United States selects their commander in chief and its impact on policy – particularly, foreign policy.

What then shapes foreign policy during that time? “Events, my dear boy, events,” Harold Macmillan, a former British prime minister, famously replied when asked what could change a government's directions. To which Michael Armacost agrees and explores the interplay between campaign politics and foreign policy in his new book.

“Since World War II, the United States has consistently pursued a global role, but the tempo of its engagement with the world has been repeatedly adjusted to reflect circumstances and domestic moods,” Armacost wrote.

A veteran scholar, former ambassador and undersecretary of state for political affairs, Armacost is an expert on the U.S. government system and policy process. In the book, he examines ideology and the struggle for power in the six elections that have taken place since 1948, ending with Barack Obama’s re-election in 2012.

The book, which reads somewhat like a guide, largely began as a project for students, he said. 

Armacost initially came to Stanford in 1994, and in 2002, returned as a distinguished fellow at the Walter H. Shorenstein Asia-Pacific Research Center. He co-teaches a graduate course on U.S. policy in Northeast Asia.

“When I left government, I found a lot of literature on how foreign policy affects elections but little in the reverse,” Armacost said. “So my aim behind the research was to not only satisfy my own curiosity but to offer a comprehensive and accessible analysis for students.”

Armacost’s career in government began in 1983 when an advisor encouraged him to apply for a White House fellowship. His fellowship in the deputy secretary of state’s office – which was only set to be a single year in Washington – led to 24 years of public service.

He went on to serve as the U.S. ambassador to Japan from 1989 to 1993 and the Philippines from 1982 to 1984, and was a member of the National Security Council.

Armacost said he remains positive about the electoral system, while also suggesting a few reforms. The system ensures a cyclical chance to step back and assess where America stands in the world, he said.

“Our system provides regular opportunities to put the spotlight on troubling foreign policy problems,” he wrote. “And supplies an incentive to consider course corrections for costly, inconclusive foreign as well as domestic policies, or offers a chance to select new management to fix them.”

Shorenstein APARC asked him a few questions about his research in the context of the 2016 election cycle. His answers are posted below.

Will Obama attempt a “sprint to the finish line” on foreign policy?

He is well embarked on that sprint. In the fourth quarter of his presidency, he is eager to burnish his foreign policy legacy. President Obama’s agenda is clear. It includes the normalization of relations with Cuba, implementation of the Iran nuclear agreement, ratification of the Trans-Pacific Partnership free trade agreement, and promotion of further international cooperation on climate change. He will also seek to avoid losing ground in geopolitical competition with ISIS in Iraq and Syria, the Russians in the Ukraine and elsewhere, and China in the South China Sea.

A president’s power to effectively undertake controversial initiatives at home and abroad tends to ebb as his tenure runs out. Those requiring Congressional support are particularly problematic. And events will play a large role in determining the problems and opportunities that come his way before Jan. 20, 2017.

Does the Trans-Pacific Partnership (TPP) stand a chance of getting ratified?

It stands a chance, but it will not be easy. Fortunately, Trade Promotion Authority has been secured from the Congress. Hence, it will be limited to an up or down vote without amendments.

Opposition from labor unions and environmental groups assures that there will be very limited Democratic support for the TPP, and Hillary Clinton, Bernie Sanders and Martin O’Malley have publicly expressed their opposition. There has also been some erosion of support for free trade among the Republicans, whose leaders have mostly expressed misgivings about some of the TPP’s provisions.

I believe the TPP will advance U.S. economic and strategic interests, but whether its ratification will be achieved before or after the 2016 election is at this point uncertain.

How do the politics of the TPP differ from that of George H.W. Bush’s pursuit of the NAFTA agreement in 1992?

In 1992 President Bush didn’t hesitate to push hard for NAFTA throughout his campaign. And the Mexican and Canadian governments also regarded the U.S. election day as a convenient deadline for getting the agreement finished. The president’s GOP Party believed in free trade, and considered the push for an embryonic hemispheric market a worthy and historic objective. A NAFTA accord could be portrayed as extending a helping hand to a friendly neighbor. The Party’s business constituency was supportive; the bulwark of opposition to the deal were labor and environmental groups, which were unlikely to vote for Bush anyway.

Promoting NAFTA also offered the president a chance to put the Democratic candidate, Bill Clinton, who had made public remarks supporting such an agreement, on the spot. If he reversed his position and opposed the accord, he could be accused of “waffling;” if he didn’t, he would risk alienating his labor and environmental constituencies. Bush nearly got the deal finished, but side letters on labor and environmental issues remained to be completed after Clinton won the election.

This year, a Democratic president is confronting major opposition from his own party, and widespread support from Congressional Republicans is therefore indispensable to his chances of ratifying the agreement. A number of Republican leaders who are generally supportive of free trade, however, contend that President Obama was so eager to wrap up the deal on his own watch, that he missed a chance to drive a harder bargain. Others are reluctant to hand the president a foreign policy victory during a presidential campaign.

And as November 2016 nears, the Democratic candidate is likely to be reluctant to buck unions and environmental groups who not only provide much needed financial support, but supply the volunteers who perform crucial “get out the vote” duties on election day.

Where does foreign policy fit into the 2016 campaign? 

Foreign policy is likely to feature very prominently in the coming election, particularly if the economy continues its steady, if modest, rate of growth. The reason is simple. The United States faces serious challenges in the Middle East, the Ukraine, South Asia and the South China Sea. And many voters who favored retrenchment in 2008, now fear it is now perceived increasingly by friends and adversaries as weakness and/or retreat.

One should not, however, expect the presidential campaign to illumine the strategic choices we face abroad. Presidential contenders typically articulate a wide range of aspirational foreign policy goals. But they rarely outline priorities among these declared aims, let alone their potential costs and risks, or the trade-offs among them. To address these core elements of strategy might offend one or another potential voting bloc. Candidates, therefore, tend to focus upon the appeal of their foreign policy objectives at home, rather than their efficacy abroad.

A wide field of candidates has emerged early on. What foreign policy issues are not being addressed that should figure in the debates?

It’s a bit early to say. The first primaries are still three months away. Few debates have yet been held. The election is likely in any event to be in part a referendum on President Obama’s record. But Hillary Clinton, who served for four years as the Secretary of State, is differentiating her position from that of Obama’s on a number of foreign policy matters. And as I noted above, the focus in most campaigns is on laudable goals rather than the key elements of strategy, i.e. the operational tests of foreign policy for anyone who occupies the Oval Office.

What will happen to the U.S. “pivot back to Asia” strategy?

President Obama performed a useful service in underlining America’s growing stake in Asia. I would expect the candidates of both major parties to affirm their intent to devote more time, attention and resources to the Asia-Pacific region. The problems the current administration has experienced in Asia are a by-product of the policy’s implementation. Many Asian leaders wonder whether the policy has been forgotten or overtaken by events. Adjustments in our regional security policy have been essentially symbolic.

With China, we are still looking for a sustainable balance between constructive engagement and prudent hedging. The diplomatic opening to Myanmar was timely, but progress has been complicated by ethnic struggles in that country. American leaders visit Asia periodically, but the United States is still perceived as primarily preoccupied with problems in the Middle East. Conclusion of the TPP will lend credibility to the policy, but only if the agreement is ratified. So it will be up to the next president to put some meat on the bones of this strategic initiative.

How do election cycles in the United States and South Korea mesh, and what might the coming cycle mean for U.S.-Korean relations?

America has a four-year election cycle for the presidency. The Republic of Korea elects its presidents for a five-year term. We have experienced several occasions when our cycles appeared out of sync, i.e. when the United States elected more conservative candidates to the White House as the Koreans chose more liberal contenders for the Blue House. George W. Bush, a conservative, served during a period when the South Korean presidents – Kim Dae Jung and Roh Moo-Hyun – were both liberals or progressives. American and South Korean perspectives on policy toward North Korea diverged sharply. Nonetheless, they joined hands in launching the U.S.-Korea Free Trade Agreement, and formulated plans for a major redeployment of U.S. military forces away from the Seoul metropolis to bases further south. And President Obama, a liberal, fashioned a close relationship with Presidents Lee Myung-bak and Park Geun-hye, both conservatives.

Thus, shared national interests have a way of tempering the ideological predilections of our respective leaders, enabling them to collaborate when dangers loom or when opportunities beckon.

South Korea now trades twice as much with China as it does with the United States and Japan combined. So its economy is tied more closely to China now, though it still looks to Washington for protection. Seoul will not want to choose between its economic interests and its strategic concerns. The United States has no reason to force such a choice on its ally, but it is clear that Beijing hopes to use its economic leverage to influence the Republic of Korea’s strategic decisions, for example, its readiness to deploy a THAAD, high altitude ballistic missile defense system. This is the kind of issue that could feed back into our election-year politics.

Related links

WNYC Brian Lehrer Show (Audio): How Elections Derail Foreign Policy (Aug. 4, 2015)

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South Korea and the United States are “completely aligned” on North Korea strategy, the chief American diplomat in South Korea said to a Stanford audience on Monday.

Mark Lippert, who assumed the role of U.S. ambassador to the Republic of Korea in 2014, delivered remarks at a public seminar, “Perspectives on the U.S.-Korea Alliance,” organized by the Korea Program at the Walter H. Shorenstein Asia-Pacific Research Center.

Arriving from the Washington summit of President Obama and Korean President Park Geun-hye, Lippert spoke of the success of the state visit. The U.S.-Korea relationship is in “as good a shape as it’s ever been,” and that secure foundation is allowing the two countries to forge ahead on shared challenges, including North Korea, trade and global health.

img 6102 Mark Lippert expressed optimism about the U.S.-ROK alliance at a Stanford talk on Oct. 19, 2015.
“We want to get back to credible and authentic negotiations towards a denuclearized Korea,” Lippert said, explaining that U.S.-Korea strategy toward North Korea aligns in three main areas: diplomacy, economics and deterrence.

He said the United States and South Korea are invested in getting to a place where the North Koreans will “come back to the table” for discussions on ending their nuclear program, noting the continuing viability of the Six Party Talks mechanism which has been stalled for more than five years.

Lippert also cited U.S.-Korea strategic cooperation on sanctions against North Korea, and defense capabilities aimed to deter the threat of a North Korea with nuclear and long-range missile capacity.

Looking ahead, “The United States strongly supports calls for reunification of the Korean Peninsula,” he said. Human rights, a free economy and a democratically elected government in the North would be a priority in that pursuit.

Lippert said the United States is supportive of inter-Korean talks and reunions for families separated by the Korean War, both announced earlier this year. On Tuesday, hundreds of South Koreans crossed the border to meet with North Korean relatives, who have been separated for more than six decades.

Partnering on the economic level was another key aspect of the summit, Lippert said, and the Trans-Pacific Partnership (TPP) was among items discussed. The United States, as one of 12 TPP member nations, would welcome an application from South Korea should they choose to pursue it, he said.

Lippert acknowledged that South Korea already has bilateral trade agreements with 10 out of the 12 TPP member nations, including one with the United States. The U.S.-Korea Free Trade Agreement (KORUS) came into force in 2012 and is moving toward full implementation, he said. The United States’ sixth largest trading partner is South Korea.

Following his formal remarks, Lippert took questions from the audience.

Michael Armacost, a Shorenstein Distinguished Fellow, asked Lippert how Japan and China figured into the summit discussions following recent developments. In September, President Park attended a military parade in Beijing that marked the 70th anniversary of the end of World War II. She was the only leader from a democratic country at the event.

Responding on China, Lippert said the United States is supportive of South Korea engaging with China. “We don’t view this as a zero-sum game,” he said, likening South Korea’s regional relationships to a situation where “all boats rise” together.

Dafna Zur, a professor of Korean culture and literature, asked Lippert to talk about how his education informed his career in public service.

Lippert attended Stanford and studied political science and international policy studies.

His education, he said, was invaluable in preparing him for the diverse situations and people that a diplomatic career brings.

Lippert encouraged students to savor conversation and debate in the classroom. Participating in that kind of forum not only “makes you a more informed person” but also “sharpens your analytic skills,” he said.

Prior to becoming ambassador, Lippert held senior positions in the Department of Defense and the White House and served in the U.S. Navy.

Following the event, Lippert met with faculty members of Shorenstein APARC and the Freeman Spogli Institute for International Studies for a roundtable discussion, chaired by Kathleen Stephens, a distinguished fellow at Shorenstein APARC and former U.S. ambassador to the Republic of Korea (2008-11).

Embedded photo: Mark Lippert speaks at Stanford on Oct. 19, 2015. Photo credit: Heather Ahn.

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Korean President Park Geun-hye (left) and U.S. President Barack Obama have an in-depth discussion at a White House summit. This picture is from their first summit in Washington in May 2013. Their second summit took place in October 2015.
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