A North American Community Approach to Security

Chairmen Lugar and Coleman, Members of the Committee. I appreciate the invitation to testify before your Committee. You asked me to place the issue of the Western Hemisphere Travel Initiative within the context of North American cooperation and border control and to relate it to the recent report by an Independent Task Force on the Future of North America sponsored by the Council on Foreign Relations in New York. The Chairs and Vice Chairs of the three nation, 31-person Task Force were John F. Manley and Tom d’Aquino of Canada, Pedro Aspe and Andres Rozental of Mexico, and William F. Weld and I from the United States. Entitled Building a North American Community, the report offered a blueprint of the goals that the three countries of North America should pursue and the steps needed to achieve those goals.

The focus today is on the new requirement for all citizens of the United States, Canada, Mexico, and Bermuda to have a passport to travel among our countries. It is intended to secure the homeland, but I question whether this approach will achieve the goal, and I fear that it will harm other U.S. interests and divert us from more effective paths toward securing our continent.

As we approach the fourth anniversary of 9/11, it is time for us to step back from our trauma and the border and examine the problem in a broader context. The best way to assure security is not at our borders with Canada and Mexico and not by defining “security” in conventional and narrow terms. We need to think about these issues in the context of a continent that is integrating economically and socially at a rapid rate. The problem is that the three governments have failed to understand this phenomenal transformation. Policy has not kept pace with the market, and our security is endangered as much by the limits of our vision as by the terrorists who threaten us.

Defensive about Europe’s example, we have failed to learn from their experience and succumbed to the opposite mistake. Whereas Europe built too many, intrusive, supra-national institutions, we have practically no credible institutions. Instead of trying to fashion a North American approach to continental problems, we continue to pursue problems on a dual-bilateral basis, taking one issue at a time. But incremental steps will no longer solve the security problem, or allow us to grasp economic opportunities. What we need to do now is forge a North American Community, based on the premise that each member benefits from its neighbor’s success and is diminished by its problems.

The subject of this hearing today— whether passports should be required to cross our two borders— is symptomatic of the problem. We are thinking too small. We need to find ways to making trade and travel easier while we define and defend a continental security perimeter. Instead of stopping North Americans on the borders, we ought to provide them with a secure, biometric Border Pass that would ease transit across the border like an E-Z pass permits our cars to speed through toll booths.

In my statement, I will comment first on the emergence of North America, the next decade’s agenda, and the response by the three governments. Next, I will describe some of the recommendations of the Council Task Force Report and focus on the travel initiative and the security and border issues.

As a word of introduction, I have been working on issues related to North America for nearly thirty years— in the government, in a non-governmental organization (the Carter Center) monitoring elections in Mexico, the United States, and Canada, and as a teacher and writer of five books and many articles on the subject of North America. Because I believe deeply that our security and prosperity depend on forging a new relationship with our neighbors, in September 2002, I established and now direct a Center for North American Studies at American University.

On January 1, 1994, the North American Free Trade Agreement (NAFTA) came into effect. If one judges a free-trade area by the size of its product and territory, North America became the largest in the world, larger than the European Union (EU). Yet that fact escaped all but a few analysts. It is widely known that the United States has the world’s largest economy, but North America also includes the eighth (Canada) and ninth (Mexico) largest economies as well. (The Economist, 2004)

In the eleven years since NAFTA came into effect, U.S. trade (exports and imports) more than doubled with its two neighbors— from $293 billion in 1993 to $713 billion in 2004. Annual flows of U.S. direct investment to Mexico went from $1.3 billion in 1992 to $15 billion in 2001, and the stock, from $14 billion to $57 billion. The annual flows of U.S. investment in Canada increased eight-fold, and the stock of FDI increased from $69 billion in 1993 to $153 billion in 2002. Canadian investment flows to the United States grew from a stock of $40 billion in 1993 to $102 billion in 2001.

Travel and immigration among the three countries also increased dramatically. In 2004, people crossed the two borders about 400 million times. The most profound impact came from those people who crossed and stayed. The 2000 census estimated that there were 21 million people of Mexican origin in the United States. Nearly two-thirds of all Mexican-born immigrants arrived in the last two decades.

North America is larger than Europe in population and territory, and its gross product not only eclipses that of the EU but also represents one-third of the world’s economic output. Intraregional exports as a percentage of total exports climbed from around 30 percent in 1982 to 58 percent in 2002 (compared to 61 percent for the EU). Our two neighbors export more energy to us than any other country, and U.S. exports to them were nearly twice those to all of Europe and nearly four times those to Japan and China in 2004. North America is no longer just a geographical expression. It has become a formidable and integrated region.

With a few notable exceptions— such as trucking, softwood lumber, and sugar— where U.S. economic interests have prevented compliance, NAFTA largely succeeded in what it was intended to do: barriers were eliminated, and trade and investment soared. A decade later, however, North America faces new challenges that require new policies.

--First, NAFTA was silent on the development gap between Mexico and its two northern neighbors, and that gap has widened.

--Second, NAFTA did not plan for its own success: it failed to invest in new roads and infrastructure to cope with more trade and traffic. The resulting delays raised the transaction costs of regional trade more than the elimination of tariffs lowered them.

--Third, NAFTA did not address immigration, and the number of undocumented workers in the United States jumped in the 1990s from 3 million to 11 million (55 percent or 6 million came from Mexico).

--Fourth, NAFTA did not address energy issues, a failure highlighted by the catastrophic blackout that Canada and the north-eastern United States suffered in August 2003, and the dramatic growth in imports of natural gas by Mexico from the United States.

--Fifth, NAFTA created few credible institutions to coordinate policy, leaving the region vulnerable to market catastrophes like the Mexican peso crisis.

--Finally, NAFTA did nothing to address security, and as a result, the long-term effects of September 11 threaten to cripple North American integration.

This is the agenda for North America in the next decade. On March 23, 2005, President George Bush, President Vicente Fox, and Prime Minister Paul Martin met in Texas. This was not their first meeting, but the others had been little more than photo-opportunities. The three leaders announced a “Security and Prosperity Partnership of North America,” based on the premise that both security and prosperity are “mutually dependent and complementary.” They declared that the partnership is “trilateral in concept,” but the framework was incremental and dual-bilateral in fact.

leaders tasked their Ministers to chair working groups with “stakeholders” and produce a report in 90 days— by June 23rd— with concrete steps to achieve measurable goals. The first question, of course, is why these security and competitiveness goals have not already been implemented since most of them have been declared often, and the security goals are, by and large, a part of the “smart borders” agreement. The answer is that our governments are not organized to address these questions on a trilateral basis, and so it should come as little surprise if the results are meager.

More importantly, compared to the agenda above, these steps are quite timid. The truth is that traffic has slowed at the border because of additional inspections, but it is not at all clear that the borders are more secure today than they were four years ago. The flow of unauthorized migrants is as high or higher. The Communique lacks a clear uplifting goal like a Customs Union. One cannot eliminate “rules-of-origin” provisions without a common external tariff, which the WTO equates with a “customs union.” Most important, there is no allusion to the paramount challenge of North America— the development gap that separates Mexico from its northern neighbors, and therefore, there is no proposal for dealing with that. There are no plans for dealing with education, energy, transportation, or establishing institutions that could prepare North American options or monitor progress. To move this agenda requires an organizing vision and political will.

There was a moment early in the Fox and Bush administrations when North American leaders appeared to grasp the essence of such a vision. In February 2001, Fox and Bush jointly endorsed the Guanajuato Proposal, which read, “After consultation with our Canadian partners, we will strive to consolidate a North American economic community whose benefits reach the lesser-developed areas of the region and extend to the most vulnerable social groups in our countries.” Unfortunately, they never translated that sentiment into policy (with the exception of the symbolic but substantively trivial $40 million Partnership for Prosperity).

All three governments share the blame for this failure. President Bush’s primary goal seemed at first to open the Mexican oil sector to U.S. investors, while then-Canadian Prime Minister Chrétien showed no interest in working with Mexico. President Fox, for his part, put forth too ambitious an agenda with too much emphasis on radical reform of U.S. immigration policy. Bush’s initial response was polite, but he soon realized he could not deliver and postponed consideration. The illegal immigration issue remains thorny and unsolved. Ultimately, however, it is more symptom than cause: the way to reduce illegal immigration is to make Mexico’s economy grow faster than that of the U.S.

The Council on Foreign Relations Task Force Report spells out such a vision. Let me summarize and amplify some of its recommendations.

NAFTA has failed to create a partnership because North American governments have not changed the way they deal with one another. Dual bilateralism, driven by U.S. power, continue to govern and irritate. Adding a third party to bilateral disputes vastly increases the chance that rules, not power, will resolve problems.

This trilateral approach should be institutionalized in a new North American Advisory Council. Unlike the sprawling and intrusive European Commission, the Commission or Council should be lean, independent, and advisory, composed of 15 distinguished individuals, 5 from each nation. Its principal purpose should be to prepare a North American agenda for leaders to consider at biannual summits and to monitor the implementation of the resulting agreements. It should be an advisor to the three leaders but also a public voice and symbol of North America. It should evaluate ways to facilitate economic integration, producing specific proposals on continental issues such as harmonizing environmental and labor standards and forging a competition policy.

The U.S. Congress should also merge the U.S.-Mexican and U.S.-Canadian interparliamentary groups into a single “North American Parliamentary Group.” A third institution should be a “Permanent Tribunal on Trade and Investment.” NAFTA established ad hoc dispute panels, but it has become difficult to find experts who do not have a conflict of interest to arbitrate conflicts. A permanent court would permit the accumulation of precedent and lay the groundwork for North American business law.

Canada and Mexico have long organized their governments to give priority to their bilateral relationships with the United States. Washington alone is poorly organized to address North American issues. To balance U.S. domestic interests with those in the continent, President Bush should appoint a White House adviser for North American affairs. Such a figure would chair a cabinet-level interagency task force on North America. No president can forge a coherent U.S. policy toward North America without such a wholesale reorganization.

For North America’s second decade, there is no higher priority than reducing the economic divide between Mexico and the rest of NAFTA. A true community or even a partnership is simply not possible when the people of one nation earn, on average, one-sixth as much as do people across the border. Mexico’s underdevelopment is a threat to its stability, to its neighbors, and to the future of integration.

Europe demonstrated that the gap could be narrowed significantly in a relatively short period with good policies and significant aid. The Council Task Force proposed serious reforms by Mexico coupled with a North American Investment Fund, which was also proposed by Senator John Cornyn. This is a far-sighted initiative that deserves the support of this Committee and Congress. I have written a report explaining the need for such a Fund and the way it could work. (See www.american.edu/cnas/publications)

North American governments can learn from the EU’s efforts to establish EU Educational and Research Centers in the United States. Centers for North American Studies in the United States, Canada, and Mexico would help people in all three countries to understand the problems and the potential of an integrated North America— and to think of themselves as North Americans. Scholarships should encourage North American students to study in each other’s country. Until a new consciousness of North America’s promise takes root, many of these proposals will remain impractical.

September 11 and the subsequent U.S. response highlighted a basic dilemma of integration: how to facilitate legitimate flows of people and goods while stopping terrorists and smugglers. When Washington virtually sealed its borders after the attacks, trucks on the Canadian side backed up 22 miles. Companies that relied on “just- in-time” production began to close their plants. The new strategy— exemplified by the “smart” border agreements concentrates inspections on high-risk traffic while using better technology to expedite the transit of low-risk goods and people. The decision to require passports to re-enter the United States after brief visits to Canada and Mexico is another example of an approach that is too narrow to solve so fundamental a problem.

Overcoming the tension between security and trade requires a bolder and more innovative approach. The three governments should negotiate and complete within five years a North American customs union with a common external tariff (CET). This would have a dual purpose. It would enhance the security on the border because guards could concentrate on terrorism rather than inspection of all the goods, and by eliminating cumbersome rules-of-origin provisions (which deny non-NAFTA products the same easy access), it would enhance efficiency and reduce the costs of trade.

At the same time, our Task Force recommends that all three governments define and defend a continental perimeter. This means that all three governments have to have confidence that a terrorist has no more chance of entering their own country as their neighbors. A common exclusion list, better intelligence-sharing, and combined training are needed. The three governments should establish a “North American Customs and Immigration Force,” composed of officials trained together in a single professional school, and they should fashion procedures to streamline border-crossing documentation. The Department of Homeland Security should expand its mission to include continental security— a shift best achieved by incorporating Mexican and Canadian perspectives and personnel into its design and operation.

Instead of creating new obstacles at the border, we should find ways to ease traffic and harmonize safety and transportation regulations. As a May 2000 report by a member of Canada’s Parliament concluded, “Crossing the border has actually gotten more difficult ... While continental trade has skyrocketed, the physical infrastructure enabling the movement of these goods has not.” The bureaucratic barriers to cross-border business impede as much as the infrastructural problems. There are 64 different sets of safety regulations in North America, 51 in the United States.

The North American Council should develop an integrated continental plan for transportation and infrastructure that includes new North American highways and high-speed rail corridors. The United States and Canada should each develop national standards on weight, safety, and configuration of trucking and then negotiate with Mexico to establish a single set of standards.

In addition, the United States and Canada should begin to merge immigration and refugee policies. It will be impossible to include Mexico in this process until the development gap is narrowed. In the meantime, the three governments should work to develop a North American Border Pass with biometric identifiers. This would permit expedited passage through customs, immigration, and airport security throughout the region. The program should build upon and unify the existing NEXUS (US-Canadian) and SENTRI (US-Mexican) programs. Only those who voluntarily seek, receive, and pay the costs for a security clearance would obtain a Border Pass, which would be accepted at all border points within North America as a complement to passports.

These are alternatives to the Western Hemisphere Initiative. It is true that we have not done a good job of keeping track of people crossing the border, and the passage of the Real ID Act shows that there is a growing and grudging recognition that some form of National Identification Card may be needed. Congress really ought to address this issue head-on. We should not use the driver’s license, the social security card, the medicare card, or our credit cards for anything other than the purpose for which they are intended. These cards are not intended to judge immigration status or citizenship. We will not only fail if we use them for that purpose; we will also undermine their real purpose. We don’t want to discourage people from getting tested to drive because they fear that their status will be questioned.

Similarly, compelling Minnesotans to get passports to cross the border into Canada for a Sunday afternoon picnic is not the best way to approach the border security issue. What we need is a new approach to jointly police the perimeter, a North American border pass to facilitate travel, and a Customs Union to allow inspectors to concentrate on terrorists rather than tariffs on goods.

North Americans are ready for a new relationship. Studies over the past 20 years have shown a convergence of values, on personal and family issues as well as on public policy. An October 2003 poll taken in all three countries by Ekos, a Canadian firm, found that a clear majority believes that a North American economic union will be established in the next ten years. The same survey found an overwhelming majority in favor of more integrated North American policies on the environment, transportation, and defense and a more modest majority in favor of common energy and banking policies. And 75 percent of people in the United States and Canada, and two-thirds of Mexicans, support the development of a North American security perimeter. The U.S., Mexican, and Canadian governments remain zealous defenders of an outdated conception of sovereignty even though their citizens are ready for a new approach. Each nation’s leadership has stressed differences rather than common interests. North America needs leaders who can articulate and pursue a broader vision.

I hope this Committee will pursue the North American agenda beyond the travel initiative considered here. On June 23rd, the three leaders promised to publish a report with specific recommendations on how to deepen North American integration. These should be reviewed together with Senator Richard Lugar’s far-sighted bill for a “North American Cooperative Security Act” and Senator Cornyn’s “North American Investment Fund.” The time has come for us to define a true North American Community. Our security and prosperity depend on it.

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Global Governance

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GLOBAL

GOVERNANCE

Enhancing

Trilateral Cooperation

The Trilateral Commission Seoul Plenary Meeting 2003

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ISBN 0-930503-83-x

The Trilateral Commission was formed in 1973 by private citizens of Europe, Japan

and North America to foster closer cooperation among these three democratic in-

dustrialized regions on common problems. It seeks to improve public understanding

of such problems, to support proposals for handling them jointly, and to nurture

habits and practices of working together, The European group has widened with the

ongoing enlargement of the European union. The Japanese group has widened into a

Pacific Asia group. The North American group now includes members from Canada,

Mexico and the United States.

See our website for more information:

http://www.trilateral.org

North American Chairman

Thomas S. Foley

European Chairman

Peter D. Sutherland

Pacific Asia Chairman

Yotaro Kobayashi

North American Office

1156 15

St., N.W.

Suite 505, Washington, D. C. 20005

European Office

5, Rue de Téhéran

F-75008 Paris, France

Pacific Asia Office

C/O Japan Center for International Exchange

4-9-17 Minami Azabu

Minato-ku, Tokyo 106-0047

Japan

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Contents

Introductory Note

vii

Executive Summary

I. Towards a New Pacific Asia Regional Order

1. The Sociopolitical and Economic Agenda of South Korea

Roh Moo-hyun

Hong Seok Hyun

SaKong Il

Summary of Discussion

2. The Rise of China and Its Global Implications

Wang Jisi

Heinrich Weiss

Wendy K. Dobson

Summary of Discussion

3. Japan’s Domestic and International Agenda

Keizo Takemi

Yasuhisa Shiozaki

Summary of Discussion

4. Prospects for Pacific Asian Integration

Jesus P. Estanislao

Wang Gungwu

Summary of Discussion

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II. Rebuilding Trilateral Cooperation

5. Building Consensus for the Doha Round

Carla A. Hills

6.Relations between the European Union and the

United States

Peter Sutherland

7.New Security Challenges in East Asia

Han Sung-Joo

Stephen W. Bosworth

Summary of Discussion

8.Restructuring the International Order after the

War in Iraq

Jacques Andréani

Thomas S. Foley

Akihiko Tanaka

Summary of Discussion

9.Addressing the New International Terrorism:

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Prevention, Intervention and Multilateral Cooperation

Excerpts from the Task Force Report

Program

113

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Introductory Note

The 34th annual plenary conference of the Trilateral Commission was

convened on April 11–14, 2003, at the Shilla Hotel, Seoul, Korea. It was

the first plenary conference that was held in a non-Japanese Asian city

since the inception of the Commission in 1973. Fears of SARS deprived

this historic plenary of, in the end, some 45 of 175 committed members

and guests, including some of the designated panelists. Nevertheless, we

were able to have a very successful meeting characterized by intimate and

lively discussions throughout the sessions. It was fortunate that we were

able to visit the Blue House on April 12 and hear directly from President

Roh Moo-hyun of the Republic of Korea about his view on Korea’s agenda

and the objectives of his government.

The Seoul Plenary Conference showed three distinctive features that

are quite different from any of the previous plenaries.First,it was a heavily

Asia Pacific oriented conference with five of the eight sessions devoted to

discussions related to this region. From the forenoon of April 12 through

lunch on April 13, we had sessions on “the Socio-Political and Economic

Agenda of South Korea,”“Prospect for Pacific Asian Integration,”“Japan’s

Domestic and International Agenda,”“The Rise of China and Its Global

Implications,” and “New Security Challenges in East Asia.” While it has

been a tradition of the Commission to devote an earlier session to discus-

sion of the domestic and international agendas of the host country, the

fact that the Seoul Plenary had such a heavy concentration on the region

should be interpreted as a reflection of the increased importance of Asia

Pacific for the trilateral world.

Second, the Seoul Plenary will be remembered as a forum of intensive

discussions of reflections on the fundamental changes in the international

system and international relations since September 11, 2001, through the

Iraq war in 2003. In the session on “Addressing the New International

Terrorism: Prevention, Intervention and Multilateral Cooperation,” the

task force of Joseph Nye, Yukio Satoh, and Paul Wilkinson presented its

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discussion draft, on which Ali Alatas, former foreign minister of Indone-

sia, the world’s largest Islam country, commented. Full report of this task

force has already been published as Addressing the New International Ter-

rorism, whose introduction and conclusion are included in this volume.

On the realization that the process which ended up in the war against

Iraq included such fundamental issues as the new unilateralism on the

part of the United States and the powerlessness of the multilateral frame-

work, notably the United Nations, a session was organized around the

theme of “Restructuring of the International Order After the War in Iraq.”

Lively discussion took place in search of the way to reconstruct interna-

tional order after the war in Iraq.

Finally, the plenary witnessed a chain of outstanding presentations,

comments, and interventions from all the participants as usual, but, this

time, it was particularly rich because of contributions from our Pacific

Asian friends. One may say that they strongly impressed members from

the other two regions both in quality as well as in numbers. This goes to

show that the newly enlarged Pacific Asia group has proved itself to be a

viable third leg of the Trilateral Commission along with the North Ameri-

can and European groups.

What follows is the record of vivid discussions which took place during

the Seoul Plenary Conference. Presentations by panelists were condensed

by the Commission’s secretariat, which is also responsible for the sum-

mary of discussions following the presentations.

In retrospect, the Seoul Plenary Conference was convened against one

of the most uncongenial international backdrops in the history of the

Commission, e.g., imminent threats from SARS in Asia and the war in

Iraq, whose conclusion was uncertain at the time of the conference. These

were only two examples of the global problems. The Trilateral Commis-

sion is all the more grateful for the utmost efforts made by the Korean

members and supporting staff, particularly Profs. Han Sung-Joo, Pacific

Asia deputy chairman, who was appointed to be the Korean ambassador

to Washington, D.C., and Lee Hong-Koo, chairman of the Commission’s

Korean group.

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Global Governance

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Global Governance

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Executive Summary

The 2003 annual meeting of the Trilateral Commission opened in Seoul,

Korea, at one of the most uncertain times in the Commission’s 30-year

history. The sense of international unity that followed September 11 had

given way to disagreements over the tone and conduct of the war on ter-

rorism, and the lead-up to the invasion of Iraq had fueled an open split

among the traditional allies of Western Europe and the United States. As

these developments called into question the utility of many of the institu-

tions at the core of the post–World War II international order, it seemed

to many that we were in the midst of a transition to some sort of new

international system, yet the eventual outcome remained unclear.

Against this backdrop, discussions at the April 11–14 meeting revolved

around three core themes. The Trilateral Commission recently expanded

beyond Japan to include members from throughout the Pacific Asian re-

gion, and the Seoul meeting marked the first time that the annual meet-

ing had been held in a Pacific Asia country other than Japan. Therefore, it

was fitting that a major focus of the discussion was on topics related to

Asia and the prospects for regional integration. Likewise, the looming

showdown with Pyongyang over its nuclear weapons program was clearly

in the forefront of the discussants’minds, and the prospects for a peaceful

resolution were a recurring theme throughout most of the sessions. And

finally, the shape of the international system after the war in Iraq emerged

as the central topic of the meeting, as participants urged a renewed com-

mitment to international cooperation in combating global terrorism,seek-

ing deeper and more just economic liberalization, and overcoming the

animosity that had emerged in transatlantic relations.

Towards a New Pacific Asia Regional Order

The international and domestic agendas of three regional powers—South

Korea, China, and Japan—and the prospects for further Pacific Asia inte-

gration were taken up in the first series of sessions. The meeting began

with an address by President Roh Moo-hyun in which he outlined his

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Global Governance

vision of making the Republic of Korea the “hub of logistics and business

in Northeast Asia.” The key, he asserted, is for the nation to enhance its

capacity to meet global economic standards, specifically by improving

transparency and corporate governance. In keeping with this, one goal of

his administration will be to advance Korea’s ranking on Transparency

International’s Global Transparency Index from 40th place to around

number 20. Meanwhile, in regards to North Korea’s nuclear ambitions, he

stressed the willingness of his government to provide support for North

Korea when it becomes a responsible member of the international com-

munity.

In a later session, Joongang Ilbo publisher Hong Seok Hyun and former

Finance Minister SaKong Il discussed the challenges facing President Roh

after his dramatic election victory. Hong focused on the president’s per-

sonality and beliefs, arguing that despite his liberal ideological tenden-

cies,President Roh is ultimately a pragmatist and his slim margin of victory

will ensure that he hews to a moderate course. SaKong Il, for his part,

concentrated on South Korea’s economic agenda, noting that the reforms

implemented after the Asian financial crisis have led to a sea change in the

country’s economic structure. Still, he added, further reform is needed,

and the overarching goal should be to make the entire country into the

“most business-friendly zone in the region.”

In the session convened to discuss the rise of China to regional and

global prominence, Chinese foreign policy analyst Wang Jisi outlined

China’s international strategy, explaining that at its core is a conviction to

avoid becoming entangled in potential conflicts that do not directly affect

the country’s vital interests. This necessitates efforts to avoid confronta-

tion with the United States as well as a commitment to maintain manage-

able relations with Taiwan. The one exception to this conservative stance

is the issue of Pyongyang’s nuclear weapons program—Beijing regards a

nuclear-armed North Korea as a critical threat and finds itself sharing

more common ground on this issue with Washington than with

Pyongyang.

Heinrich Weiss and Wendy Dobson added their thoughts on China’s

economic and political rise to Wang’s formulation, with Weiss noting that

it is widely understood by everyone involved that domestic political re-

form will unavoidably follow the current economic reforms. Meanwhile,

Dobson counseled prudence to policymakers pushing for a revaluation

of the renminbi, warning that the still immature structure of China’s do-

mestic financial institutions makes it perilous for the country to pursue

this course and maybe even impossible to control such a process if

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Executive Summary

launched. Still, she argued, the Chinese leadership’s justifiable reluctance

to undertake such policies should not deeply hurt the country’s trading

partners since China is actually not a major source of global deflation

and, on other counts, it has demonstrated its commitment to act as a

responsible member of global economic institutions.

The session devoted to Japan featured two Diet members who took up

the topic of their country’s international agenda. Upper House member

Keizo Takemi outlined two trends that are helping drive a more assertive

international involvement: the growing conviction among younger po-

litical leaders that Japan should be better prepared to exercise political

and military power in the Asia Pacific region and the increasing desire of

many younger Japanese to take individual action to help improve the lives

of the less fortunate around the world. The willingness to play a more

active role in security issues is reflected in the determined stance of the

country’s leaders not to accept the acquisition and possession of nuclear

weapons by North Korea and a commitment to use all means necessary to

prevent it.At the same time, the growing ambition of many of the younger

generation to participate directly in international cooperation activities

is manifesting itself in the increased overseas presence of Japanese non-

governmental organizations, particularly those whose efforts are in keep-

ing with the concept of human security.

Meanwhile,Lower House member Yasuhisa Shiozaki focused on Japan’s

economic reform efforts, explaining that the country’s major task lies in

overcoming the anti-market, inward-looking trends that have appeared,

both domestically and in its international activities. Warning that recent

years have seen a reemergence of government intervention in financial

markets, Shiozaki called for a renewed political commitment to pursue

domestic structural reform and a deeper national commitment to open

markets and globalization.

The prospects for Pacific Asian integration were taken up by former

Philippines Finance Minister Jesus Estanislao and Singaporean scholar

Wang Gungwu in a later session. Estanislao spoke about the future of

economic integration, arguing that regional trade liberalization efforts

may have reached the point of diminishing returns although there is fer-

tile ground for future cooperation in the areas of finance and develop-

ment. In particular, he advised that the regional agenda be expanded to

include areas such as macroeconomic risk management, financial super-

vision, and corporate governance practices. Where Estanislao focused on

the economic aspects of regional integration, Wang turned his attention

to the sociocultural dimension. Noting how political legitimacy in many

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Asian countries is steeped in traditional value systems, Wang concluded

that modernity and the political integration it can usher into the region

cannot be stable or meaningful if built on the denigration of the roles of

religion and spirituality.

Rebuilding Trilateral Cooperation

Fiveadditional sessions focused on global issues central tothe eventual shape

of the emerging post–September 11, post–Iraq War international system.

In one of these sessions, former U.S.Trade Representative Carla Hills urged

the leaders of rich countries to resist pressure to restrict trade and to re-

double their efforts to successfully complete the Doha Round at the World

Trade Organization (WTO). Noting that the extended period of global

growth that began in the mid-19th century and continued through to the

start of World War I was followed by an era of trade restrictions and then

World War II, she warned that the Doha Round is in peril and that the

outcome of these talks will help determine the fate of the global economy

for the next quarter century.Meaningful steps by rich countries to integrate

poor countries into the global economy are far overdue, she declared, and

this round represents our best chance for success in this venture.

Meanwhile,Peter Sutherland,former director-general of the WTO,tack-

led the transatlantic split over the war in Iraq, arguing that an abject fail-

ure of basic diplomacy was a major contributor to the current divisions

between the two sides, which share far more than divides them. Noting

that both Europe and the United States must examine their failures or

else risk repeating them, he traced the rapid rise of mutual antipathy that

threatens to become embedded in public opinion. It is critical, he warned,

that both sides commit themselves to strengthening the transatlantic part-

nership and come to a full realization that unilateralism is not a sustain-

able option in our interdependent world.

Former Korean Foreign Minister Han Sung-Joo and former U.S. am-

bassador to Korea Stephen W. Bosworth outlined the security challenges

in East Asia, focusing particularly on the tensions on the Korean penin-

sula. Comparing the 1993–1994 North Korean nuclear crisis to the cur-

rent one, Han argued that, this time, the options for responding to

Pyongyang’s actions are more limited and the situation is more urgent.

Characterizing regime change in North Korea as unrealistic and a mili-

tary response as deeply problematic, he recommended a multi-layered

dialogue with North Korea that is built on close coordination among the

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Executive Summary

United States, South Korea, and Japan and that allows them to communi-

cate their intention to use a mixture of carrots and sticks to reward and

punish North Korean behavior. In the end, he noted, any comprehensive

resolution is likely to involve a package deal, one that participants in the

subsequent discussion period seemed to feel would be a “larger medium-

sized package” of aid and incentives, in contrast to the “small package”

that emerged from the 1993–1994 negotiations.

Bosworth explained the importance of analyzing the crisis within the

context of a profoundly changed regional security framework, particu-

larly in light of recent significant shifts in the U.S. security role in Asia.

Changes over the past few years, many of them emerging from within the

region, have driven U.S. thinking about regional security policy in un-

foreseen directions. As a result, he argued, we should continue to see U.S.

bilateral alliances in Northeast Asia diminish in importance and U.S. stra-

tegic focus in the region shift toward Southeast Asia. Regardless of the

eventual outcome of the North Korean crisis, one probable result is that,

by the end of the decade, there are likely to be few if any ground troops

forward-deployed in South Korea and Japan.

A variety of measures to combat the new form of terrorism character-

ized by al Qaeda were proposed by Joseph Nye of Harvard University;

Yukio Satoh, president of the Japan Institute of International Affairs and

former Japanese ambassador to the United Nations; and Paul Wilkinson

of St. Andrews University. (The papers that were discussed in this session

have been compiled separately as Addressing the New International Ter-

rorism; therefore, the texts are not included in this publication.) While

noting that terrorism has a long history, Nye, Satoh, and Wilkinson ar-

gued that September 11 was a dramatic manifestation of a “new terror-

ism,” one that is truly transnational in nature, reflects the desire and

potential to wreak destruction of a greater magnitude than before, and is

motivated by absolutist and grandiose goals rather than limited, political

intentions. The struggle against this strain of terrorism will be a long and

arduous one with no definitive victory, they predicted; therefore it would

be a mistake to suspend civil liberties indefinitely. What is needed, in-

stead, they asserted, includes more coordinated multilateral civilian co-

operation, stronger actions to stem the proliferation of weapons of mass

destruction, global steps to delegitimize the deliberate use of force against

noncombatants, and major international efforts to resolve issues and

conflicts that create sympathy and support for terror groups.

In the meeting’s final session,Ambassadeur de France Jacques Andréani,

former French ambassador to the United States; former Speaker of the

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Global Governance

U.S. House of Representatives Thomas Foley; and Tokyo University pro-

fessor Akihiko Tanaka presented views from each of the Trilateral regions

on restructuring the international order after the war in Iraq. Andréani

set out by assessing the damage done to international institutions by the

disagreements over the war in Iraq, concluding that too much has been

made of the weakness of certain organizations such as the European Union,

and that other institutions, particularly the United Nations, are now all

the more important for the United States if it is to succeed in Iraq. He

concluded by calling for the United States and Europe to work together to

strengthen the Atlantic alliance but cautioned that U.S.-Europe relations

need to be built on a respect for the autonomy of Europe.

Foley, meanwhile, maintained that the key to understanding the United

States and its new approach to security issues is to comprehend the dra-

matic impact of September 11 on the American consciousness, an impact

that is not fully understood by even most of the closest partners of the

United States. Now, he argued, the fundamental changes in American

thinking of the past two years dictate that, in order to garner U.S. consent,

any new international system will have to avoid critically limiting the ability

of the United States to deal with direct and immediate threats to its secu-

rity. On the other hand, the United States must realize that it cannot ef-

fectively fight a war against terrorism without multilateral cooperation.

This need, he noted, gives rise to hope that the international community

will be able to find some sort of middle ground between the differing

approaches of small ad hoc coalitions and broad-based multilateralism.

In closing the session, Tanaka, a political scientist, theorized about what

exactly had changed in the international system as a result of the war in

Iraq. Disputing the conventional wisdom of the day, he contended that it

is “too hasty to conclude that a totally new order is emerging after the war

in Iraq” and that, in actuality, very little has changed in terms of power

relations or norms of international behavior. In his view, power relations

in the near future will continue to consist of complex interactions cen-

tered on the United States and involving the United Nations and several

major powers. At the same time, international norms, which have gradu-

ally been evolving to justify intervention to halt genocide or deal with

failed states, have not shifted far enough to completely legitimize inter-

vention against totalitarian or authoritarian regimes. In the post-Iraq

world, he concluded, the United States still needs international collabora-

tion, international politics remain as complex and messy as before, and

diplomacy still matters.

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