U.S.-Japan Alliance In 2024

Introduction

Japan and the United States today confront an international environment more fragmented and divided than at any time since the end of World War II. Hamas’s brutal attack on Israel in October 2023 has rekindled major conflict in the Middle East, including attacks on shipping in the Red Sea, with a risk of expansion as Iran and its proxies seek to capitalize on the violence. Russia’s invasion of Ukraine has shaken the international system and raised the specter of a world dividing into blocs. China has provided Russia with an economic lifeline, and North Korea has provided millions of rounds of ammunition that have sustained the war effort and helped Moscow to avoid defeat — and perhaps even to prevail, absent additional international assistance to Ukraine.

For its part, China is pursuing revisionist aims across the Indo-Pacific and beyond, adopting tools of coercion — military, political, and economic — to press territorial claims and advance its interests. Russia and China have largely ceased cooperation with the West, including at the United Nations and even in areas where they previously found common cause, such as efforts to restrain North Korean behavior. Kim Jong-un has capitalized on these divisions to advance his nuclear and missile programs and has forged a close relationship with Vladimir Putin. With Moscow and Beijing effectively in his corner, Kim has abandoned any pretext of engagement with the United States. He is on the brink of a full-spectrum nuclear capability, from tactical weapons for use on the battlefield to strategic weapons that can credibly threaten the United States and its allies.

At the same time, both the United States and Japan are seeking to define the strategic competition with China in terms that avoid a new Cold War. On the one hand, both the United States and Japan have pursued policies to defend commercial and technological advantages in key sectors from China’s predatory and other unfair practices. In 2022, Japan passed new laws to promote “economic security” through enhanced screening for inbound investment, subsidies and protections for critical materials, and a new classified patent system for sensitive technologies. In the United States, Washington is pursuing a “small yard, high fence” approach to protecting critical technologies — limiting Beijing’s access to advanced technologies and promoting supply chain diversification — while otherwise allowing commerce with China to continue. But the size of the “yard” of critical technologies and the height of the “fence” around it remain subject to hot political debate. While managing this competition, Washington and Tokyo must preserve room to cooperate with China on issues of common interest and to sustain economic exchange key to the world’s prosperity. Building cooperation on climate change is of particular importance.

In this uncertain environment, the U.S.-Japan alliance has never been more important — but doubts about the future of American leadership have never been more profound. Under the Biden administration, the United States has focused on strengthening alliances and partnerships, including by elevating the Quad, launching AUKUS, and promoting deeper “minilateral” cooperation among allies, particularly Japan, South Korea, and Australia. This strategy has achieved noteworthy successes, but it has failed to advance an economic agenda that meets the demand for credible and durable U.S. engagement, especially in the trade arena. And the future of U.S. engagement is uncertain, given a presidential campaign that features radically different visions of the United States’ role in the world and its relationships with allies. Regardless of which candidate wins, the concerns about American isolationism and reliability will continue.

The burdens of global and regional leadership will therefore fall more heavily on Tokyo in the near term. Fortunately, Japan is well positioned to take on this role. Former prime minister Abe Shinzo was the architect of the ambitious diplomatic strategy known as the Free and Open Indo-Pacific (FOIP), and his successors have fully embraced his vision. Prime Minister Kishida Fumio announced a second phase of FOIP in March 2023, and it continues to enjoy broad political support in Japan. Japan has responded to a challenging security environment with unprecedented policy change, with plans to nearly double defense spending by 2027 and to acquire new capabilities that will contribute to deterrence in East Asia, including long-range precision strike missiles. Under Kishida’s leadership, Japan has played a major role in supporting Ukraine and was an effective leader of the G7 in 2023. Unlike many Western democracies, Japan has avoided the worst impulses of populism and isolationism. Its role in supporting a free and open international order grounded in the rule of law is therefore more important than ever. But looking ahead, the urgency of the international environment will demand more from Japan, and from the U.S.-Japan alliance.

Toward an Integrated Alliance

In the year 2000, the lead authors of this report brought together a bipartisan group to develop a vision for the U.S.-Japan alliance before the presidential election to serve as a roadmap for the relationship regardless of which party won. That report helped to shape George W. Bush’s approach to the alliance, and since then this group has built on this tradition of bipartisanship in the U.S.-Japan relationship through reports in 2007, 2012, 2018, and 2020. The broad political support for the alliance today in Washington and Tokyo did not fully exist before 2000 — and it has been crucial to the successful development of the relationship ever since.

The authors behind earlier reports were not mere cheerleaders for the alliance — they were committed to honesty and candor about the challenges ahead and the need for action in Washington and Tokyo. The first report, issued in October 2000, called for “renewed attention to improving, reinvigorating, and refocusing the U.S.-Japan alliance.” In the most recent report, issued on the eve of President Biden’s inauguration, the authors called for an alliance that is more equal and expects more of Japan.

The strategic environment that the United States and Japan face today, and the urgency of action needed to address it, demands an even stronger call to action. With Japan now embarked on an ambitious strategic trajectory, this report urges Washington and Tokyo to take the next step: to move toward an alliance that is more integrated, from planning and executing military operations to linking economic and security concerns, including by coordinating industrial policy and promoting secure supply chains.

In security terms, Washington must recognize that Japan’s new course is fundamentally different from the past, and that a more integrated alliance, including at the command level, can make a vital contribution to deterrence by enabling rapid decisionmaking and reducing seams between the two countries’ systems. On the economic side, Washington and Tokyo should collaborate on critical technologies and advance a robust friend-shoring agenda, working closely with other partners in Asia and Europe. Furthermore, the United States and Japan should work together to build the new bilateral and multilateral mechanisms needed to support a strategy of selective de-risking with China. Japan and the United States should sustain close cooperation globally to uphold a free and open international order grounded in the rule of law.

Advancing the Security Alliance

Japan’s 2022 National Defense Strategy represents an opportunity to move toward a far more operational and credible alliance. Despite the significant strengthening of the security relationship over the last decade, much of the alliance architecture remains rooted in an era when the United States expected little of Japan as a strategic partner. In the past, the alliance could be effective without formal mechanisms of military coordination, but today it cannot. A more integrated alliance will require modernizing its command structure, deepening intelligence cooperation, and actively promoting defense industry and technology cooperation. To enable these transformative steps, Japan will need to adopt stronger cybersecurity practices and further enhance and expand its security clearance system.

• Restructure alliance command and control. Japan’s establishment of a new Joint Operational Command (J-JOC) by March 2025, to oversee joint operations of the Self Defense Forces (SDF), is an opportunity to modernize the alliance’s command structure. The United States should upgrade the leadership of U.S. forces in Japan by establishing a standing three- or four-star joint operational command, subordinate to U.S. Indo-Pacific Command, with a more robust staff and the authority to plan and execute bilateral exercises and operations. This command could be a revamped U.S. Forces Japan or a new joint operational element established in Japan. Critically, however, the new headquarters should be primarily focused on the bilateral alliance and serve as a one-stop shop on all alliance matters for the Japanese government. The commander should not be dual hatted with U.S. service command responsibilities. With this new structure in place, Tokyo and Washington should establish a standing, combined bilateral planning and coordination office to support closer coordination of military operations while preserving separate chains of command. To the degree possible, the J-JOC and U.S. operational command in Japan should be co-located to ensure seamless coordination during contingencies.

• Strengthen the intelligence relationship and cybersecurity. The intelligence relationship remains a weak link in the U.S.-Japan alliance, with Japan’s intelligence community — despite reforms in recent years — still plagued by stovepiping and the absence of a true all-source analytic capability. Japan should establish a centralized analytic organization under the Cabinet Secretariat, staffed with personnel from across the intelligence community with access to all national security information produced by the Japanese government. In addition, Japan should place a high priority on passing legislation to create an economic security clearance system and strengthen Japan’s cyber defenses, including by enhancing public-private information sharing on cyber threats. These steps are prerequisites to deeper intelligence and defense cooperation in the alliance and must not be delayed. To support this effort, the United States should set out a clear road map of steps needed to elevate the intelligence-sharing relationship to the equivalent of the Five Eyes partnership.

• Prioritize defense industry and technology cooperation. The war in Ukraine has underscored the importance of robust allied defense industrial capacity. Supporting an innovative Japanese defense industry is in the U.S. interest, and Japan’s loosening of restrictions on defense equipment exports — though still insufficient — is an opportunity to expand collaboration. Doing so will require adjustments to mindsets on both sides. For example, leadership in the U.S. Department of Defense should prioritize collaborative programs with Japan, from expanded licensed production of existing munitions lines to codevelopment of new technologies and systems. It should also streamline technology release policies to reflect the progress Japan has made on information security. In addition, the United States should support Japanese collaboration with other partners, including projects under Pillar Two of AUKUS. For its part, Japan should resist the instinct to pursue indigenous solutions to defense requirements, which place at risk timely delivery of the capabilities needed to sustain deterrence. To be competitive, and ultimately to provide the capabilities Japan and the United States need, Japanese industry needs to shed its nearly exclusive focus on building capabilities for the SDF and embrace the international marketplace, including partnerships with foreign defense companies.

Expanding Partnerships and Coalitions

Deeper integration of the U.S.-Japan relationship at the bilateral level should be combined with accelerated efforts to improve connectivity to other allies and like-minded partners — in particular, Australia, the Philippines, South Korea and Taiwan. When needed and interests align, the alliance should have global reach — and Japan should play a larger role in addressing the crisis in the Middle East, including by helping to protect commercial shipping in the Red Sea. The U.S.-Japan relationship is rooted in common values and a commitment to democracy; in a world in which democracy is under strain globally, Washington and Tokyo should work together to strengthen democratic resilience and the rule of law.

• Bridge the U.S.-ROK alliance. With Japan rapidly moving to expand defense capabilities, including long-range counterstrike, the need for connective tissue between the U.S.-Japan and the U.S.-ROK alliances is greater than ever before. Following the Camp David meetings in August 2023, structures of trilateral dialogue at the strategic level are in place. The allies should now move to establish formal connections at the operational level, including through exchanges of liaison officers at respective commands, the inclusion of observers at bilateral exercises, and the establishment of a trilateral contingency planning cell. To support these changes, Japan and South Korea should move purposefully and promptly to normalize bilateral defense relations through a first-ever joint security declaration. Such a declaration could be modeled on the 2007 Japan-Australia Joint Declaration on Security Cooperation, which set out broad areas of common interest and cooperation in a non-binding political statement. These government actions should be accompanied by efforts to deepen ties among individuals and civil society in Japan and South Korea.

• Operationalize U.S.-Japan-Australia security cooperation. Japan and Australia have advanced their defense cooperation with a Reciprocal Access Agreement and enhanced Japanese military exercises in northern Australia. Australia’s focus on guided weapons and stand-off strike parallels Japan’s objectives and offers opportunities for federated defense production and forward sustainment. Australia’s geography offers critical defense in depth and a connection to the Indian Ocean. As the United States modernizes its command and control in Japan and defense industrial policies, emphasis should be placed on operationalizing the trilateral security cooperation already underway.

• Advance cooperation with the Philippines. The Marcos government’s decisions to stand up to Chinese coercion in the South China Sea and rebuild the U.S. alliance represent a significant strategic opportunity for Washington and Tokyo, who should do everything possible to reinforce and support Manila’s actions. Including Manila in minilateral engagement should continue to be a high priority, and the United States and Japan should coordinate closely in providing security assistance, to avoid duplication and ensure interoperability. Tokyo should prioritize concluding a Reciprocal Access Agreement with Manila.

• Support Taiwan’s resilience and quietly deepen trilateral dialogue with Taipei. Taiwan’s free and fair elections in January 2024 were an inspiration for the world, and the incoming Lai government deserves support from Washington, Tokyo, and other democracies. Within the parameters of the United States’ and Japan’s long-standing “One China” policies, both countries should support Taiwan’s capacity to resist military and economic coercion. In particular, Tokyo should expand low-profile ties with Taiwan’s national security establishment, including through regularized participation in some of Washington’s regular security policy dialogues with Taipei. The absence of these links today is a critical weakness in preparing for the possibility of a Taiwan Strait contingency. In addition, Washington and Tokyo should explore ways to help Taiwan harden critical infrastructure, to include communications networks, energy supplies, and transportation links.

• Strengthen cooperation in the Middle East. Despite Japan’s heavy dependence on sea lanes from the Middle East, Tokyo has been notably absent from the international response to terrorist attacks on commercial shipping in the Red Sea. Leveraging the SDF facility in Djibouti, Japan should play a larger and more visible role in defending the commercial sea lanes. Japan depends more heavily on sea lanes from the Middle East than does the United States, and its stance in the region should reflect that reality.

• Promote democratic norms and the rule of law. Japan’s National Security Strategy emphasizes the importance of democratic norms and the rule of law to Japan’s national interests. Weak governance and poor transparency and accountability have allowed China to engage in elite capture, build dual-use infrastructure for the military, and turn cash-poor media against the United States and its allies in strategically important parts of the Indo-Pacific. These same conditions limit opportunities for investment by U.S. and Japanese firms that would reinforce anti-corruption measures and the rule of law. The most important work is countering corruption, foreign interference, and disinformation in countries that are strategically important. The United States and Japan should work closely through the Quad and G7 and with South Korea to develop a strategy and coordination mechanism to reinforce democratic resilience, combat disinformation, and strengthen the rule of law in the Indo-Pacific to counter Beijing’s strategies of co-option.

Strengthening Economic and Technology Cooperation

While economic cooperation is enshrined in Article II of the U.S.-Japan bilateral security treaty, it has historically been difficult to implement, largely due to trade friction. However, both countries have come a long way in transforming their economic relationship from one of adversity to one of genuine cooperation. Indeed, issues at the nexus of economic and national security — such as protecting critical technologies, strengthening supply chain resilience, and promoting friend-shoring in key strategic sectors — have become among the most important on the policy agenda today and should be a central focus for the United States and Japan in the years ahead, particularly as both countries continue to work to advance their preferred economic rules, values, and norms in the Indo-Pacific region and beyond.

• Drive the G7 process on economic security. Japan deserves strong credit for its leadership at the 2023 G7 meeting in Hiroshima, and in particular its success in shepherding the “G7 Leaders’ Statement on Economic Resilience and Economic Security.” Implementation of this vision is essential and will require continued leadership by the United States and Japan to press the other G7 members to take concrete measures to enhance supply chain resilience, counter economic coercion, and build resilient critical infrastructure.

• Cooperate in combating China’s excess capacity and dumping. Excess capacity prompted by massive subsidies and other types of financial assistance, as well as insufficient domestic demand in China, is precipitating a flood of Chinese exports to the rest of the world and putting industries in the United States, Japan, and Europe at risk. Working with like-minded partners, including in the G7, the United States and Japan should coordinate approaches and, where possible, develop collective policy responses. These could include relying on traditional trade tools, such as anti-dumping and anti-subsidy measures, but should also involve employing new and creative approaches to address this growing concern. As a first step, the United States, Japan, Europe, and South Korea should initiate a dialogue on coordinated responses to excess capacity in the critical sector of electric vehicles, where the Chinese industry has rapidly become a global leader.

• Explore new models for free trade arrangements. The consensus in the United States in support of an affirmative and market-opening trade policy has frayed in both parties, with few signs of it being rebuilt any time soon. Although the authors of this report strongly support the return of the United States to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), such a step is unlikely for the foreseeable future. As an interim measure, the United States and Japan should explore the possibility of developing a new and forward-looking template for free trade agreements that includes some traditional elements but goes further to address emerging issues, such as supply chain resilience, economic coercion, climate and trade, and advanced technology standards. The two governments could also consider pursuing and building on existing agreements in specific sectors, such as electric vehicles, batteries, semiconductors, and critical minerals. Such agreements, aimed to promote secure supply chains, could be deepened to include market access, harmonized or mutually recognized standards, and trade facilitation provisions to make them genuine supply chain agreements.

• Develop common and updated rules governing two-way investment. A new free trade agreement template could provide more certainty on related investment matters, given the anticipated continued increase in investment flows between both countries. The positions of both presidential candidates on the proposed acquisition of U.S. Steel by Nippon Steel do not reflect a careful assessment of the U.S. national interest. The proposed deal would likely support U.S. economic growth, jobs, and innovation without in any way jeopardizing national security. Although it would not have exempted this transaction from review, Japan should be granted “excepted foreign state” (“whitelist”) status from the Committee on Foreign Investment in the United States.

• Allow new exports of U.S. liquefied natural gas (LNG) to Japan. In light of the importance of LNG imports to Japan as a transitional source of energy, even as it continues to invest heavily in renewables and rebuild its nuclear energy capacity, the U.S. government should consider exempting Japan from the temporary pause on new LNG export approvals announced by President Biden in January 2024.

• Deepen cooperation on development globally. Opportunities to deepen U.S.-Japan development cooperation in the coming years should build on the strong foundation already established between the partners and assess strategic opportunities to leverage Japan’s private sector to advance key development cooperation priorities. Japan and the United States could further align efforts to advance global health security and outcomes; advance their partnership on energy cooperation and youth leadership in sub-Saharan Africa; invest in sustainable economic development and livelihood opportunities in Latin America; and expand access to mobile telecommunication technology in the Indo-Pacific that is open, safe, secure, and accessible to all. The two countries should also enhance their work through the Indo-Pacific Economic Framework for Prosperity (IPEF) and the Partnership for Global Infrastructure and Investment (PGII) to mobilize public and private capital to invest in sustainable infrastructure. These efforts are vital to providing countries in the developing world with high-quality alternatives to China’s Belt and Road Initiative.

• Support the expansion of the G7 to include Australia and South Korea. Since the Russian invasion of Ukraine, the G7 has emerged as the primary international forum for upholding the international rules-based order, from support to Ukraine to combating Chinese economic coercion. But as an increasingly important global governance institution, and perhaps the only effective one, its membership needs expansion to include other like-minded partners with the values and resources to buttress the rules-based international order. The United States and Japan should consider G7 expansion to include Australia and South Korea, the world’s next two largest advanced democracies and partners that are increasingly critical to global political and economic responses. This is not charity. Given the challenges facing today’s international environment, it is time to bring additional voices with meaningful capacity and aligned views to the table.

• Strengthen coordination of economic security policy through a new Economic Security Dialogue led by the U.S. National Security Council and Japan’s National Security Secretariat. The Economic 2+2, launched in 2022, has proven to be a useful forum for coordinating geoeconomic strategy, but alone it is insufficient to drive aligned decisionmaking in both countries. Given the political sensitivity and coordination challenges on economic security issues and industrial policy, Washington and Tokyo should establish a new dialogue mechanism, led by the White House and the Cabinet Secretariat, to facilitate coordination of industrial policy, technology promotion, export controls, and other economic security policies.

Conclusion

This report closes with an admonition. As strong as the U.S.-Japan alliance is today, the authors share a concern about its future. The dramatic decline in recent years in Japanese students studying in the United States, and U.S. students studying in Japan, risks eroding the foundation of U.S.-Japan relations over the long term. Both governments should focus on rebuilding these ties, which represent the lifeblood of the relationship across government, industry, and civil society. Programs in both countries should focus on student exchanges and promoting the role of women in the relationship. The U.S.-Japan Conference on Cultural and Educational Interchange (CULCON) continues to be a vital forum in this regard.

The U.S.-Japan relationship is at a moment of historic strength, even as both countries confront daunting challenges in the international system. The partnership today was almost unimaginable at the time of the authors’ first report in the year 2000. This evolution was not inevitable. It has been built by people from all walks of life in both countries who are deeply committed to the relationship. The authors of this report have had the good fortune to be part of this effort over many years — and in some cases decades. It is the enduring task of both countries to cultivate new generations of leaders who recognize the value of the two countries’ partnership and who share a commitment to sustaining it.

Richard L. Armitage became president of Armitage International in March 2005. Previously, he served as deputy secretary of state, having been confirmed by the U.S. Senate on March 23, 2001.

Joseph S. Nye is University Distinguished Service Professor, Emeritus, and former dean of the Harvard Kennedy School of Government. He has served as assistant secretary of defense for international security affairs, chair of the National Intelligence Council, and deputy under secretary of state for security assistance, science and technology.