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The relocation of Marine Corps Air Station Futenma on Okinawa remained the predominant issue in the US-Japan relationship and the two governments issued a joint statement in late May reaffirming a commitment to realize a plan adopted in 2006 with some modifications to be explored. Prime Minister Hatoyama then resigned as polls revealed frustration with his handling of the Futenma issue and weak leadership overall. Finance Minister Kan Naoto succeeded Hatoyama as premier and outlined his own policy priorities just weeks before an important parliamentary election. Kan stressed the centrality of the US-Japan alliance to Japanese diplomacy and reiterated the theme in his first meeting with President Obama at the G8 Summit in late June. The two leaders’ first meeting was business-like and lacking for drama – exactly as both governments had hoped. New public opinion polls suggested political turmoil at home has not had a significant impact on Japan’s standing globally or in the US, but some observers continued to suggest the US should lower expectations of Japan as an ally in the debate about the future of the alliance. Futenma and Hatoyama’s downfall Tension in the US-Japan relationship became increasingly evident when Prime Minister Hatoyama Yukio visited Washington for the US-sponsored Nuclear Security Summit in mid-April. In lieu of a formal bilateral meeting between leaders, the two governments arranged a brief sidebar during a working dinner at the summit. The terse nature of the discussion made headlines as President Barack Obama reportedly asked Prime Minister Hatoyama if he could follow through on his pledge to resolve the impasse over the relocation of the Futenma Air Station by his self-imposed deadline of May. A Washington Post columnist labeled Hatoyama the “biggest loser” at the summit for failing to secure a bilateral meeting and noted some Obama administration officials had characterized Hatoyama as “hapless” and “increasingly loopy.” This prompted widespread commentary in the Japanese media that Hatoyama had lost all credibility with Washington and was doing damage to the relationship. But two weeks later reports surfaced suggesting the Hatoyama government would largely accept the agreement reached in May 2006 to relocate Futenma from Ginowan in central Okinawa to the less populated Henoko area in the north, and would propose modifications including alternate construction methods for runways and the transfer of some base functions (namely training exercises) to the island of Tokunoshima. Bilateral consultations commenced in early May, but Hatoyama would struggle to make the case to the public after promising for months that he would respect the majority of Okinawa residents who preferred to relocate Futenma outside the prefecture. US-Japan Relations 21 July 2010 Polls released at the end of April indicated Hatoyama had completely lost the confidence of the general public. An April 26 Nikkei Shimbun poll found just a quarter of the public supporting Hatoyama, with 64 percent disapproving of his performance. With respect to the Futenma issue, 72 percent of respondents in a Fujisankei survey also published April 26 felt Hatoyama’s approach had a negative impact on the US-Japan relationship, and 87 percent considered his self-imposed May deadline impossible. Hatoyama visited Okinawa twice in May – first to admit publicly that his pledge to remove Futenma from the prefecture was not feasible and later to apologize formally for reneging on that promise – but further antagonized the local population, which organized mass protests against the relocation of Futenma within the prefecture. Hatoyama’s attempt at outreach proved too little too late and led to calls for his resignation; 49 percent of respondents to a May 14 Jiji news poll in mid-May considered that an appropriate step should he fail to resolve the matter. Defense Minister Kitazawa Toshimi visited Washington May 25 to confer with Defense Secretary Robert Gates regarding the Futenma relocation plan, and three days later the bilateral Security Consultative Committee (SCC) issued a joint statement reaffirming a shared commitment to implement US force realignment initiatives outlined in a previous statement dated May 1, 2006, including the relocation of Futenma and the return of the base to the local government. The statement also confirmed an intention to build a replacement facility in the Henoko area as agreed in 2006; authorized a study on the facility’s location, configuration, and construction to be completed no later than the end of August 2010; and listed other issues to be considered including the relocation of some training activities to Tokunoshima island, better environmental stewardship of bases, and shared use of facilities. The SCC concluded the statement by emphasizing the need for further outreach with local communities in Okinawa regarding concerns about the US force presence. Amplifying the domestic political consequences of this initiative, Prime Minister Hatoyama was forced to dismiss Consumer Affairs Minister Fukushima Mizuho for refusing to endorse the decision to proceed with the existing plan. This development was ironic in that Fukushima is the leader of the Social Democratic Party (SDP), which advocated the removal of Futenma from Okinawa and convinced Hatoyama to endorse that view last year in exchange for joining a ruling coalition with the Democratic Party of Japan (DPJ) and the People’s New Party (PNP). The SDP bolted the coalition on May 30, and Hatoyama found himself with a newfound understanding of the US force presence in Okinawa but no political capital to show for his epiphany. Enter Kan Hatoyama was also criticized for repeatedly failing to control policy debates within his Cabinet and he and DPJ Secretary General Ozawa Ichiro were both tainted by funding scandals, which weakened DPJ claims to clean up Japanese politics. Several polls at the end of May listed Hatoyama’s approval rating between 17 and 20 percent, marking a near 50-point decline in eight months. On June 2 he announced he was resigning and had convinced Ozawa to exit the stage with him. Finance Minister Kan Naoto and Lower House lawmaker Tarutoko Shinji ran to succeed Hatoyama as DPJ president. Kan won the party vote by a margin of 291 to 129 and became prime minister on June 4 after being elected separately in both houses of the Diet. US-Japan Relations 22 July 2010 Kan moved quickly to differentiate himself from his predecessor in his approaches to governance, economic policy, and the US-Japan relationship. He retained 11 of Hatoyama’s 17 Cabinet members but appointed Sengoku Yoshito, a powerful party veteran adept at policy coordination, as chief Cabinet secretary to centralize control of the policymaking process. Kan also placed critics of Ozawa Ichiro in prominent party posts to improve the image of the DPJ with the Upper House election looming in July. Examples include Edano Yukio, who took over as DPJ secretary general, and Gemba Koichiro, who was tasked with chairing the DPJ’s Policy Research Council, abolished by Ozawa last fall but reinstituted by Kan to inject more transparency into the policymaking process and strengthen coordination between the Cabinet and the party. (Gemba serves concurrently as minister for Civil Service Reform.) Kan also changed course somewhat with respect to economic policy, focusing more on deficit reduction than social welfare spending. The Kan government unveiled a new growth strategy in June based on what Kan described as the “third approach” to revive the Japanese economy. Lamenting decades of public works spending under Liberal Democratic Party (LDP) rule (the “first approach”) and increased unemployment and income disparity that resulted from Koizumi Junichiro’s attempts at deregulation and economic reform (the “second approach”), Kan’s “third approach” prioritizes the environment and health sectors, tourism, and regional trade as target areas for growth and attempts to shore up the social security system and reduce the deficit through caps on government spending and comprehensive tax reform. Kan conspicuously raised the possibility of a consumption tax increase, a contrast to Hatoyama who promised not to touch it for four years. The new emphasis on deficit reduction drew the ire of Ozawa, who accused the Kan government of backtracking on priorities from 2009 including the elimination of highway tolls, child allowances, and subsidies for farmers. Kan did promise to pass a bill endorsed by Hatoyama that would reverse previous efforts to privatize the postal service, or Japan Post, and was championed by Financial Services Minister and PNP leader Kamei Shizuka. Kamei resigned from the Cabinet on June 11 after the government did not extend the Diet session and decided instead to resubmit the postal reform bill in the fall. Nevertheless, the PNP remained in the coalition. Kan also set a positive tone for the US-Japan relationship by repeatedly referring to the US-Japan alliance as the axis or cornerstone of Japanese diplomacy. Kan visited Okinawa on June 23 and promised to reduce the burden of the US force presence but also reiterated a commitment to the May 28 agreement on Futenma relocation, much to the relief of Obama administration officials. Further, during his first address to the Diet Kan took a subtle jab at Hatoyama by stating that his approach to diplomacy would be guided by realism and not ideology. This rhetorical shift signaled a fresh start for Tokyo and Washington, but Kan would first have to survive the July Upper House election before embarking on agenda-setting for the alliance. The Upper House election The DPJ unveiled its manifesto for the Upper House election on June 17 with a primary focus on economic issues under the slogan “Restoring Vitality to Japan.” The section on security and diplomacy spoke of deepening the US-Japan alliance and reducing the burden on the Okinawan people based on the Futenma relocation agreement but also repeated key themes from the 2009 election platform such as revising the bilateral Status of Forces Agreement in the spirit of a US-Japan Relations 23 July 2010 “close and equal US-Japan alliance.” Other foreign policy priorities included the realization of an East Asian Community, support for peacekeeping operations, official development assistance, and nuclear nonproliferation. Kan’s approval rating exceeded 60 percent when he first took office but had declined 10 points in a matter of weeks presumably because he floated the notion of a consumption tax increase. The media soon began speculating about the prospects for a DPJ majority in the Upper House and possible coalition scenarios. The departure of the SDP from the coalition and PNP frustration with the failure to pass the postal reform bill seemed to create space for other small parties seeking to capture the attention of unaffiliated voters. Foremost among them is Your Party (Minnanotō) founded in August 2009 by former LDP member Watanabe Yoshimi. Other disgruntled LDP members followed suit by forming parties in April including former Health and Welfare Minister Masuzoe Yoichi, who founded the New Renaissance Party (Shintōkaikaku); and Yosano Kaoru and Hiranuma Takeo, who established the Sunrise Party of Japan (Tachiagare Nippon). Former local government officials also joined the fray by establishing the Spirit of Japan Party (Sōshintō). Hatoyama’s resignation left just six weeks for Kan to establish momentum and the commanding victory for the DPJ envisioned less than a year ago was not at all certain. Should the DPJ fare poorly, Kan could face a challenge in the next DPJ presidential race in September – mostly like orchestrated by the ousted and bitter Ozawa Ichiro – introducing yet another layer of uncertainty to Japanese politics. Bilateral engagement The degree of bilateral dialogue at senior levels this quarter was remarkable given the deflating nature of the impasse over Futenma. Then-Finance Minister Kan visited Washington in April and met with Treasury Secretary Timothy Geithner during the G7 and World Bank/International Monetary Fund meetings. US Agriculture Secretary Tom Vilsack visited Tokyo in April to discuss beef exports. Transportation Secretary Ray LaHood made a trip in May to meet Toyota officials regarding vehicle safety measures in the wake of several recalls and examine high-speed rail and other issues with various officials. Secretary of State Hillary Clinton also stopped in Tokyo in May to discuss Futenma, North Korea, and other challenges with Foreign Minister Okada Katsuya. Defense Minister Kitazawa and Defense Secretary Gates, after meeting in Washington regarding Futenma, conferred again on the sidelines of the Shangri-La Security Dialogue in Singapore in early June. And on June 27, Prime Minister Kan and President Obama met in Toronto at the G20 Summit and covered a comprehensive agenda including the Futenma issue, bilateral economic cooperation, North Korea, Iran, Afghanistan, Pakistan, climate change, and nuclear disarmament/non-proliferation. Other developments pointed to potential advances in economic and security cooperation. Japan hosted two preparatory meetings for the Asia-Pacific Economic Cooperation (APEC) forum scheduled for November in Yokohama. (The US will host APEC next year in Hawaii.) US Ambassador to Japan John Roos hosted the first US-Japan Dialogue to Promote Innovation, Entrepreneurship, and Job Creation in Tokyo. Security cooperation also featured prominently as Defense Minister Kitazawa and Defense Secretary Gates joined South Korean Defense Minister Kim Tae-young for a trilateral security dialogue in Singapore. The Maritime Self-Defense Force participated in Pacific Partnership 2010, a humanitarian and civic assistance effort led by the US US-Japan Relations 24 July 2010 Navy. In an attempt to move “beyond Futenma,” Parliamentary Vice Minister for Defense Nagashima Akihisa addressed a conference in Washington on June 17 and identified the air-sea battle concept from the US Quadrennial Defense Review as a central pillar of bilateral strategic dialogue and previewed themes likely to emerge in Japan’s National Defense Program Guidelines due in December. Finally, the US House of Representatives passed Resolution 1464 recognizing the 50th anniversary of the US-Japan security treaty and expressing appreciation to the people of Japan for hosting US forces. Japan’s leadership credentials Two public opinion polls released during the quarter reflected positive views of Japan notwithstanding the political turmoil in Tokyo. A BBC World Service poll published April 19 found Japan the second most favorably viewed nation after Germany among 28 countries surveyed. On June 1, the Ministry of Foreign Affairs released a survey on Japan’s image in the US in which 56 percent of opinion leaders considered China to be the most important partner in Asia for the US, followed by Japan at 36 percent. Ninety percent of opinion leaders and 79 percent of the general public considered Japan a dependable ally but questions persist about Japan’s capacity for leadership. In one example, Robert Madsen and Richard Samuels of the Massachusetts Institute of Technology published an extensive essay in the National Interest on April 20 entitled, “Japan LLP” arguing that persistent instability in Japanese politics will prevent Japan from assuming a more assertive role in security affairs, thereby necessitating a reduced military role for Japan in the US-Japan alliance. This is not necessarily a consensus view but nonetheless continues a pattern of analysis identified last quarter introducing skepticism about the prospects for robust alliance cooperation in the near term. Things to watch Prime Minister Kan will face his first test in the July 11 Upper House election and could face a leadership challenge from within the DPJ in September depending on the outcome. Japanese security strategy will come to the fore when a defense advisory panel established by the Ministry of Defense submits recommendations for the National Defense Program Guidelines in August. The US and Japanese governments will try to settle on the details of the Futenma relocation package by the end of August. Japan will continue to host preparatory meetings for the APEC leaders meeting. Rounding out the quarter, the United Nations General Assembly in New York presents another opportunity for a bilateral summit meeting.