We Are Tomodachi Spring / Summer 2018

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21relationship with the current U.S. administration while holding the line on core national and global economic interests. His strategy has included laying the groundwork for improved relations with China. Japan is leading the defence of the rules-based order and has so far managed the threat better than any other country. Japan has developed a strategic, pragmatic and principled approach to the problems that it and the world both now confront. Japanese economic diplomacy has been re-imagined from one that largely sought expansion of markets and investment in Southeast Asia to a more strategic approach that aligns more closely with domestic reform and international priorities. The Japan-Australia Economic Partnership agreement and the EU-Japan Economic Partnership Agreement are important agreements that help reform the Japanese economy and achieve diplomatic goals as well. The TPP was seen as an agreement that would use U.S. leverage to open up protected sectors in Japan consistent with domestic reform priorities. U.S. withdrawal from the TPP was a shock, but then Japan—now the Partnership’s largest economy—led the conclusion of the TPP-11 or rebranded Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Australia was important, but conclusion of the TPP-11 would not have happened without Japan’s leadership. TPP-11 does not deliver the big strategic goal of keeping the United States entrenched in Asia or providing a weighty defence of the global trading system. But TPP-11 does send the world a message on the region’s commitment to rules-based openness. That could add momentum for broader liberalisation in Asia by facilitating expansion of membership and by lifting the ambition in the Regional Comprehensive Economic Partnership (RCEP), an agreement being negotiated by the 10 ASEAN members as well as Australia, China, India, Japan, New Zealand and South Korea.Australia and Japan are leading the way in opening markets, expanding rules and strengthening regional economic architecture. TPP-11 and RCEP are only two of the vehicles for lifting living standards for their members. Japan is now stepping up to leadership in RCEP by hosting the first ministerial meeting outside of ASEAN in mid-2018. The grouping has real strategic significance given that it includes the large emerging market economies. Forging a core agreement in 2018 that locks in credible reforms in China, Indonesia, and India, and that helps Japan’s domestic reform agenda, will provide a major boost to the global economy. That will require strong leadership and political will. Japan’s biggest play is still to come. Prime Minister Abe’s pragmatism saw him break the ice in relations with China in 2006 and he has laid the groundwork for once again improving relations with Japan’s most important economic partner. Mr. Abe has suggested that there could be room for cooperation on the Asian Infrastructure Investment Bank (AIIB) and China’s Belt and Road Initiative for Japan so long as the right conditions are met. The China-Japan-Korea trilateral has continued its work, despite the difficult relations in Northeast Asia, and was the arena for Premier Li Keqiang visiting Tokyo. Bilateral state visits look set to follow. A breakthrough in the Japan-China relationship is overdue. It will boost Asian cooperation at a time when Asia must assume an important leadership role in global affairs.