By Suvendrini Kakuchi
TOKYO, Mar 18 2001 (IPS)

Japanese Prime Minister Yoshiro Mori’s visit to United States this week comes at a bad time: he is a lame-duck leader trying to mend ties with Washington at a particularly difficult time.

While the trip is supposed to highlight the key relationship between the two powers, it is taking place against the backdrop of trouble in the economies of both countries — the United States’ is cooling down while Japan’s is stuck in the doldrums.

This means that Mori’s trip has generated few expectations — whether in terms of repairing ties with the United States shaken by the accidental sinking by a U.S. submarine of a Japanese fishing vessel, or of instilling confidence in the Japanese economy in the hope of heading off repercussions from a slowdown both in Japan and the United States.

Mori will meet U.S. President George W. Bush Monday in what will be the first meeting between the two leaders.

But the Japanese premier does not have the ability to do much at a time when the Japan-U.S. relationship is not flourishing and when he appears on the point of losing his job amid public disillusionment with his performance.

“His visit is being carefully monitored on both sides,” says an analysis by ‘Yomuri’, Japan’s largest newspaper, on Friday.

Other local media called the summit with Bush a “pointless” exercise, since the unpopular Mori is widely believed to be leaving office soon.

A less than rosy economic picture — worries about the effects on the global economy as the U.S. economy cools down and the Japanese economy continues to wallow in problems after a decade — is also adding to the tension between Tokyo and Washington.

The U.S. media have blamed Japan’s inertia on structural economic reform for the U.S. stock market fall last week. A ‘New York Times’ report Thursday, for instance, blamed Japan’s “misguided” economic policy for the stock price declines, and urged the Bush administration to tell Mori to use a wholly different approach by getting rid of the bad eggs in the basket.

The comment has brought bristling retorts from some Japanese economists.

“Japan cannot follow U.S. style economic conditions. Culturally we are very different nations. It would only create more problems for Japan if we go on a restructuring binge,” explains Yukiko Konishi, an economist.

Mori will be travelling with Taro Aso, minister for economic and fiscal policy, who is expected to explain to Bush the emergency economic package released by Tokyo this month to shore up its slipping financial market.

Mori and Bush will issue an economic statement after their summit, one that is expected to confirm co-operation in macroeconomic policies and to try to address the sharp declines in stock market prices seen in both markets.

Japanese economists point out that writing off the bad loans in domestic banks, as suggested by the United States, will create more unemployment and encourage bankruptcies.

The U.S. investment company Goldman Sachs projected in a report last week that more that 300,000 people would be unemployed and hundreds of small and medium companies, mostly in the construction and real estate businesses, would be forced to wind-up operations, if the government allows bad companies to close.

Many of these companies have been propped up by banks for years, but regulators are now putting pressure on the banks to take tougher action.

Mori will also fly to Honolulu, Hawaii, to visit the site of the sinking of the Japanese fishing vessel, before returning to Japan on Wednesday. More than 750,000 signatures have been collected from the public, calling for the raising of the ‘Ehime Maru’, the sunken Japanese ship. Mori will pass on the petition to Bush.

Observers in the United States, see Mori’s visit and Bush’s wish for “very full and open and fruitful” relationship as a sign that Japan will be a pillar of the new U.S. government’s foreign policy.

“Japan’s friendship is important to maintain U.S. leadership in the world. Despite some issues, the base is firm, both countries need each other,” explains Kazuhiko Ogawa, a defence analyst.

The advent of a new U.S. government has raised hopes in Japan of a stronger bilateral relationship between the world’s largest economies. Tokyo has not forgotten a decision by Democrat President Bill Clinton to spend eight days in China in 1998, without stopping over in Japan.

But real headway in U.S.-Japan ties will probably have to wait, because domestic political turmoil does not allow Tokyo to pursue new reforms under Mori or put its goals into action yet. Mori will not be able to engage in substantive policy discussions when he meets with Bush, not when many Japanese are counting the days before he leaves.

A major topic on the summit agenda is a discussion on North Korea. Bush is taking a hard-line view on North Korea, even though he has signalled support for South Korean President Kim Dae Jung’s “sunshine” policy calling for engagement.

Japan is keen to see co-ordination with the United States and South Korea on dealing with North Korea, a stance that Mori will put forward in Washington.

Ayako Doi, a Japanese columnist based in Washington, wrote recently that the Japan-U.S. alliance, while firm, needs to be worked on carefully into the new century. She points out that even if the two governments succeed in getting over the ‘Ehime Maru’ crisis, there remains the simmering issue of resentment against the 47,000 strong U.S. military presence in Japan.

For the Japanese, the alliance with the United States is increasingly a question of striking a balance between the security benefit it brings and the problems created by a large U.S. military presence. In the last couple of weeks, the Japanese have begun to feel that the negatives outweigh the positives in the relationship, she warns.

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