Hearing of the Asia and the Pacific Subcommittee of the House International Relations Committee: The Emergence of a Changing Japan

HEADLINE: HEARING OF THE ASIA AND THE PACIFIC SUBCOMMITTEE OF THE HOUSE INTERNATIONAL RELATIONS COMMITTEE

SUBJECT: THE EMERGENCE OF A CHANGING JAPAN

CHAIRED BY: REPRESENTATIVE JAMES A. LEACH (R-IA)

WITNESSES:

THOMAS U. BERGER, PH.D., ASSOCIATE PROFESSOR, DEPARTMENT OF INTERNATIONAL RELATIONS, BOSTON UNIVERSITY;

LEONARD SCHOPPA, JR., PH.D., ASSOCIATE PROFESSOR, DEPARTMENT OF GOVERNMENT AND FOREIGN AFFAIRS, UNIVERSITY OF VIRGINIA; RICHARD B. KATZ, SENIOR EDITOR, THE ORIENTAL ECONOMIST REPORT, TOYO KEIZAI AMERICA

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Mr. PAUL. Thank you, Mr. Chairman.

I want to briefly make a comment about how I see some of the economic problems that Japan has faced over the years, and certainly since 1989. There has been significant problems there, and I am afraid they learned a lesson from us in the 1930s that they do not allow their markets to adjust. There was a tremendous amount of malinvestment in Japan and a tremendous amount of debt, bad debt that they kept on the books, and they had prolonged the agony. And in some ways I am afraid that for us to do a preaching is not going to do much good because we do not have a clean slate either when you think about our current account deficit, our financial situation here in Washington, the way we run Social Security, and the attempt at propping up our system as well since the year 2000.

Yes, we have sort of patched things together since 2000, but I am afraid we are slipping into the doldrums that Japan slipped to in the 1990s.

So I think we have a responsibility, but we have a responsibility to ourselves to do something rather than thinking that we can solve all their problems.

I am very sympathetic to the Chairman's concern, though, about the beef. I am from Texas and we have a couple head down there as well. But I see it in an economic term that the greatest penalty for Japan to put on sanctions or keep out our beef, the greatest penalty is on the Japanese. It is like a tax. They cut down on their imports and therefore the price has to go up, so there is a great penalty.

For us to retaliate in any way, I think would be, well, why penalize our people and tax our people as well even though, I think, the negotiations and the effort should be made so that we might be able to sell our beef there again, but I would hate to see us play the game of retaliation.

As a matter of fact, it was sanctions that we played games with in Japan in the 1930s that backfired on us as well when we dealt with oil embargoes.

But my question has to do more with the troops in Japan and in Korea, and the concern that has been expressed now about North Korea. But you know, our policy sometimes makes things worse over there because there seems to be a natural effort in this day and age for South Korea and North Korea to do things together and get along a little bit better. Then we raise cane because they want to deal with the so-called thugs in North Korea. And we express these great concerns about North Korea, but the odds of North Korea attacking the United States with nuclear weapons is just utterly remote.

I mean, we do not have to get tough with Pakistan. We do not have to get tough with India. So I would say, why do we not just get out of the way, let the South Koreans and North Koreans have a better balance? And getting out of the way, to me, would be, why do we not bring our troops home?

One of the most popular things I can say in my district is, why in the world do we have 53,000 troops in Japan and these thousands of troops in Korea for 60 years?

You know, I calculated in very rough terms in today's dollars that we have spent over a trillion dollars keeping troops in Korea. And if you add up what we spent in Japan, we are talking about trillions of dollars and we are talking about trillions, multi-trillions of dollars of obligations that this Government has. And had those trillions of dollars really been necessary for national security? I think it undermines our national security.

We have 53,000 troops, and if we are limiting this discussion to Japan, what would be wrong with this suggestion? Why do we not just make the announcement, make a decision and say, ''Folks, our troops are coming home, we are going to be home in 4 years''? It would help our current account deficit. Instead of all those 53,000 troops spending all their money in Japan, you know, they would be in a base here at home spending their money.

So financially it would help us, and Japan would act in their self-interest. Why do we have to sit around and worry, well, what is Japan going to do? Well, they will do what is necessary. They are not going to attack us, and maybe they will, you know, learn to assume responsibility and we can save some money.

Where is the defect in just saying in 4 years bring home our 53,000 troops?

Mr. SCHOPPA. I am sure Mr. Berger will want to say some things about this too, but let me react to that.

I think what we need to remember is that the troops in Asia serve a multitude of functions. They are not just there to deal with the North Korean threat. Perhaps their most important role is to serve as insurance against great power competition reemerging in the region, or an arms race reemerging in the region, and the necessity at some later date for the Americans to come in and have to sort things out.

We know how expensive war can be when we actually have to send troops in and deal with a hostile situation. It is much cheaper to keep some troops in the region and maintain the basic status quo that has served most of those countries very well.

And I would not deny that there is room for readjusting the troops, moving some back to the United States, moving some around in the region. The United States Government is considering some of these options. But a wholesale withdrawal, I think, would be very unwise.

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There are two other things that we do have to worry about. One is the possibility of transfer.

Mr. PAUL. Pardon me?

Mr. BERGER. Transfer. I mean, North Koreans have developed that capability. They have the kind of regime which might share those kinds of capabilities with other actors, not only state, but even more worringly, non-state actors, and that is something we have to be very, very worried about after September 11.

The other thing is also, of course, how North Korea may be undermining or contributing to the undermining of the nonproliferation regime. There are a lot of countries which could go nuclear in the world. And if North Korea can demonstrate that it pays to take this kind of stance on nuclear issues, we have to worry about other countries.

Mr. PAUL. But should we not worry about Pakistan transferring too?

Mr. BERGER. I think you are absolutely right. I am not here to talk about Pakistan.

Mr. PAUL. No.

Mr. BERGER. And I do not pretend to be an expert on that issue. We are working with Pakistan. Actually, the current Government in Pakistan is more responsible than the regime in Pyongyang, but we need to be sensitive to these issues. You are absolutely correct.

Mr. PAUL. May I follow up, Mr. Chairman?

Mr. LEACH. The first two speakers used excessive time, the last should be entitled to the same.

Mr. PAUL. Oh, thank you very much.

I do want to address one word that you used when you talked about the thirties and this isolation. I think there is a big distinction from the position I hold versus the isolation of the thirties, because I want to diminish military presence because I think it is an unwise investment and leads to too many unintended consequences, and we are witnessing currently what is going on in the Middle East today.

I want to increase economic relationships. I do not want terrors. I do not want barriers. I want to be involved. I want to encourage investments, and that is why I like to see Taiwan investing in China and visa-versa, and Japan going to China, and the more the merrier. So that to me is a lot different than the protectionist isolationist's viewpoint of the thirties, and this is more the traditional American position that we do not get our troops every place, and eventually I am going to win the argument.

So no matter how much you disagree with me, I win because we do not have the money. We are going broke, and our dollar is going to crash, and the economics will control my position because we just cannot maintain this military empire around the world. We are short troops now.

They are talking about going into Iran. Where are they going to get the troops?

But the one last question is, since nobody wants the troops to leave so far from the panel, this means then I should assume that your advice would be, or your inference would be, that we are going to be there indefinitely so that we can come back here in another 55-60 years and say, ''I wonder when we are going to bring the troops home from Japan?'' That will not last, as I say, because we will go broke. Thank you.

Mr. LEACH. As Chair, let me just comment. The gentleman from Texas always brings insight to this panel, and I would like to pick up on one theme that is partly the gentleman's, that if we look at history, tariff barriers that became competitive created economic difficulty and military difficulty.

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