2011 seems to be the year that the world has said goodbye to ruthless dictators and terrorists.  We have witnessed the deaths of Osama Bin Laden, Muammar al-Qaddafi, and now Kim Jong Il. They were all oppressive leaders who had no regard for their people or the sanctity of life, and all promoted international terrorist movements.

Granted two of the deaths came from military action and in areas where there exists a struggle for freedom and democracy. The death of the "Dear Leader" had nothing to do with North Korea's quest for freedom and democracy.  He died of a heart attack - apparently of "fatigue." 

Fatigue from what?  From over indulgence, love of fine wine and cognac, extravagant dinners, a decadent lifestyle, and a corrupt ruling class that has enriched itself at the expense of its own people. This man's lifestyle was grotesquely at odds with the suffering of his people.

We don't see North Koreans flooding to the streets to express a desire for freedom, democracy and self determination.  We see instead the thousands of crying and wailing citizens expressing great sadness that Kim Jong Il was taken too soon. Having been to North Korea several times I am not surprised to see this public response. Keep in mind that from birth, North Koreans are taught to worship "The Great Leader," "The Dear Leader," and now "The Great Successor."  

Those who live in the capitol, Pyongyang, are among the most privileged and benefit from a life far better than those in the countryside. Ordinary North Koreans have no access to outside information, something which is almost unthinkable in today's world but remains a chilling reality inside this secretive, paranoid and ruthless system. 

World leaders yesterday expressed concern and hope that the passing of Kim Jong Il may provide an opportunity for change. 

Read on

The President has finished up a grueling trip to the Asia-Pacific region and can generally feel good about what he accomplished. Like everything this President does, however, the trip was very heavy on political spin. His team could not stop talking about their "pivot" to Asia. Whether this is a foreign policy strategy or just rhetoric in an election year, it deserves careful and considered deconstruction. Our colleague Dan Blumenthal began the critique last week by rightly pointing out that the pivot doesn't work when you hollow out defense spending. And Dan is not alone; Tom Donnelly also pointed out some of the flaws with the pivot concept. Now that the trip is over, more can be said.

PROS:

The Indo-Pacific region is the fastest-growing economic zone in the world; home to six of the eight known nuclear weapons states or proliferators (US, Russia, China, India, Pakistan, North Korea); and scene of both 21st century economic integration and 19th century balance-of-power rivalry. The United States is a Pacific power with interests, influence, allies and territory right at the center of the region. Polling by the German Marshall Fund of the United States shows that Americans, by a considerable margin, believe Asia is more important to their country's national interests than Europe. At the same time, Asians have real questions about American staying power in their region (as they have on-and-off since Vietnam).

The president's success in signaling high-level American attention to the region should be reassuring to nervous friends and allies. Enactment of the Korea-U.S. Free Trade Agreement (after years of deferring to the Democratic Party's labor base) and progress on negotiations for the Trans-Pacific Partnership put momentum behind the goal of a Free Trade Area of the Asia-Pacific that President Bush put forward. President Obama's conversion to these policies and the cause of trade liberalization has come late, but it is welcome nonetheless.

It also appears that despite embracing dangerously deep defense cuts overall, the Obama administration has decided that force structure reductions will mostly come in Europe and not Asia. Secretary of Defense Panetta sent that signal on his first trip to Asia, and it helped to blunt the growing concerns about American defense capabilities in the region.

Finally, Secretary of State Hillary Clinton deserves credit for spending more time on and in Asia than most of her immediate predecessors. For all those reasons, whether it is called a "pivot" or not, the administration's increasing focus on Asia has big pros.

CONS:

But is a "pivot" the right way to frame this? First of all, without resources the big talk will quickly seem hollow to friends and foes alike. The United States is facing the prospect of up to a trillion dollars in defense cuts over the coming decade. Defense cuts of this magnitude cannot but undermine U.S. capabilities, and with them our ability to reassure and deter, in Asia. Defense spending cuts may come out of Europe and Southwest Asia, but when Iran, Afghanistan, Iraq, or Pakistan get hot in the decade ahead, where will the forces come from? If we hollow out our force structure in Europe and Southwest Asia, we set up a situation where forces will eventually be drained out of East Asia. Our friends and adversaries know this.

In addition, the "pivot" spin makes the United States look like a spastic superpower that swings around focusing on only one region at a time. During the Cold War, the United States managed a grand strategy that was global in scope with skill; are we not capable of doing so today, when our freedom of maneuver and our relative power are in fact greater? It is unbecoming of a global power; unnerving for our European allies (whose support we also need to manage China's ascendance); and carries the unfortunate connotation that we may "pivot" again based on a new, reductionist, one-region-at-a-time concept of grand strategy.

Finally, by suddenly framing this entire trip as a swing against China, the White House risks unsettling the careful ground work done by American diplomats and military officials over the past year. The Australian base agreement is a good first step toward constructing a dispersed but robust forward presence as we prepare to cope with more missile threats to our forces. But as Teddy Roosevelt said, it is better to speak softly and carry a big stick. Now friendly countries like Indonesia are recoiling against U.S. strategy because of the last minute verbal assault on China. The "pivot" is even more jarring because the administration spent the first year framing Asia strategy in terms of a new U.S.-China bipolar condominium, articulated in the November 2009 Obama-Hu joint statement that trumpeted respect for each others' core interests and followed U.S. decisions to postpone meetings with the Dalai Lama and arms sales to Taiwan. Supporters of a strong U.S.-India relationship in Delhi were actually told by senior Obama administration officials at the time that the United States no longer believes in the concept of the balance of power. You cannot blame them for being a bit confused now. The pivot can be dizzying.

At the end of the day, we suspect the "pivot" is a convenient political frame for the White House to try to explain that the Obama administration remains muscular and strategic, despite its accelerated retreat from Iraq and Afghanistan. When domestic politics intrude on the framing of foreign policy in this way -- especially when it happens so suddenly-- the result can undercut what would otherwise be solid building blocks for a regional strategy in Asia. Still, kudos to those like Secretary Clinton who have remained consistent in their focus on Asia and to those U.S. officials who worked hard to reverse misguided early policies against trade liberalization and an ill-conceived U.S.-China bipolar condominium. Their work paid off on this trip. Meanwhile, let's be clear: superpowers manage rising powers with leadership and steadiness -- not pivots.

There has been much ado in the media and from the Obama administration about a great strategic shift from the Middle East and South Asia to East Asia. Obama and senior administration officials are making the case for this shift by claiming that we have accomplished our Iraq and Afghanistan goals, and that the time has come to focus on the "real problem": China. This week, the president announced the basing of 2,500 marines in Australia and a pushed for the Trans-Pacific Partnership, a regional free trade agreement that excludes China. The U.S. military has also released some details on its new AirSea battle concept -- an answer to the dense network of submarines, mines, anti-aircraft capabilities, and missiles that China has created to keep the United States out of China's periphery. All of these moves are to be commended. However, they do not and should not add up to a new "pivot." Here are some reasons why:

1) There is no way for the U.S. to project the necessary influence into East Asia if Aghanistan and Pakistan are on fire. One major reason is that if India is tied down in a competition with Pakistan, China, and Iran in Afghanistan, it cannot become the kind of East Asian power we wish it to be. The Bush administration's India strategy was designed to help India break out of its squabbles in South Asia and exert influence in East Asia. A hasty pull-out of Aghanistan will reverse that sensible strategy.

2) China is exercising more influence in the Middle East in ways harmful to our larger goals (e.g., support of Iran). To compete with China in East Asia, we must retain our influence in the Middle East and South Asia and check destabilizing Chinese diplomacy.

3) The deployment of U.S. Marines to Australia and the highlighting of a military concept to respond to China's military build-up are necessary but insufficient first steps. These developments cannot make up for the fact that our military has faced deep cuts in its budget and will face more. No matter what administration officials say, these cuts will affect our posture in Asia profoundly. We need more ships, more aircraft, more missile defense. To be a bit flippant, we are putting Marines in Australia without sufficient equipment to get out of Australia. Our allies and China need to see and feel our presence. That can only be accomplished with more sea patrols, surges in exercises that promote freedom of navigation, and so on.

4) The AirSea battle concept is a serious effort to meet the China challenge. But based on information released about it, the concept suffers from two flaws. First, the resource question -- how would we shut down Chinese military operations without sufficient platforms and munitions? Second, AirSea battle fails to take into account China's nuclear ambitions. China is already a nuclear-armed country with every incentive to continue its build-up of nuclear forces. That is because we have agreed on a bilateral (with Russia) rather than multilateral basis to cap our nuclear forces. Since China is bound by no important arms control treaties, and because we are openly talking about major conventional strikes on the Mainland, China has every reason to seek nuclear parity with us over time.

5) The TPP is a great idea. In particular, securing Japanese agreement to an FTA would be a great success . The question is, are we serious? It took the better part of Obama's term to ratify the FTA with South Korea. Are we really to believe that he will take on his base and sign more major FTAs?

There is no dispute that we need to take serious steps to balance China's power. But we cannot do so by "pivoting" away from two critical areas of the world. We need India to have peaceful borders in order to compete with China, and we need to diminish China's influence in the Middle East. And finally, the Obama Administration needs to resource its stated Asia strategy, which it so far shows little sign of doing. 

Those who believe that the United States is no longer capable of strategic planning should pay a visit to the Pacific Command (PACOM), headed by the impressive Admiral Willard. Besides the almost unimaginable number of tasks associated with running a command of 325,000 personal that covers half of the globe, Admiral Willard has also charged himself and his staff with long-range strategic planning for this most vital of regions. Unfortunately, Washington is of little help. Not only can the bureaucracy (under any administration) no longer respond to anything but a day's events, but political leaders on both sides of the aisle have been asking PACOM to do more and more with less and less for over a decade.

What's more, PACOM has little strategic guidance. As a country, we vaguely know that we want to deter Chinese aggression while encouraging "responsible behavior"; integrate India as a full strategic partner; empower Southeast Asian countries as independent, prosperous, and hopefully democratic partners; encourage Japan to play a "normal" role; and denuclearize North Korea while working for eventual unification of the peninsula under Seoul's governance. But military staffs need to plan -- and no one knows for what exactly we are planning. Will we or won't we come to Taiwan's defense? Will we get into a conflict over disputes in the South China Sea? Will we intervene in a Sino-Japanese conflict? What if China is the main aggressor in a Korea conflagration? All unclear.

The situation is most akin to the years of "Orange" planning at the Naval War College that unfolded over the three decades before the Pacific War. We knew we might one day have to fight Imperial Japan, but we had no idea over what. We possessed the Philippines but we certainly would not go to war over those islands alone. Taiwan today is the closest analogue. It may be the trigger over a fight for, as Aaron Friedberg has put it, "mastery" or "supremacy over half the world."

While Taiwan may seem today to be an idiosyncratic American concern about democratic friends, if attacked the island may look like the place where China has chosen to change the global balance of power. Unfortunately, the years of "Orange" planning ended up in a horrific Pacific War. American ambiguity over red lines played its part in triggering that conflict. Japan attacked China with no response. Tokyo did not know if an invasion of Southeast Asia would be met with similar passivity. Finally, Japan decided that one decisive blow against the U.S. fleet in Hawaii would keep Washington out of the sphere of influence it was building in Asia. It was wrong.

Ambiguity has its place -- it allows for flexibility. In the case of Sino-American relations, ambiguity allows the United States to respond both to an aggressive China and one that does not repeat the mistakes of Imperial Japan. But clarity serves its purposes too. Secretaries Clinton and Gates, for example, proclaimed "core interests," as the Chinese would say, in freedom of navigation through the South China Sea; PACOM is now trying to interpret and operationalize Washington's guidance.

But an uneven commitment to the Taiwan Relations Act, a law that has helped to keep the cross-Strait peace for decades, only invites more Chinese probing and testing in the place where Beijing is most likely to challenge American staying power.

PACOM is doing its part to, as the military likes to say, "shape" the region in concert with U.S. interests -- through its planning, its robust program of engagement with allies and partners, and its very active and enduring presence. Besides the lack of clarity from Washington -- a function of the absence of effective strategic planning mechanisms -- political leaders are overtaxing the command charged with defense of the world's most vital region. We are slowly and without due deliberation heading toward the famous "Lippmann Gap" -- our declared interests in Asia keep growing, we ask PACOM to do what it can to advance them, but we starve them of resources to do the job. We are coming to a point where either we retrench from our commitments in Asia (a policy with untold consequences) or we decide as a nation to properly fund them.

I have been cautious about predicting the longer-term strategic implications of the massive earthquakes and tsunami that hit Japan on March 11. To begin with, years ago I lived for a summer in the part of Japan that has born the brunt of this disaster, interviewing farmers and politicians for a column I struggled to write each week in Japanese for the local Iwate Nippo Newspaper. The images of death and destruction, especially to the beautiful Sanriku Coast, have been heartbreaking for me to watch. A second reason for caution is the lesson many of us learned trying to anticipate the longer-term impact of the December 2004 Asian Tsunami. Most of us in government at the time expected that the civil war in Sri Lanka would end because the tsunami had destroyed the Tamil Tigers' fleet and coastal bases, but that the insurgency in Aceh, Indonesia would grow worse because the tsunami had destroyed the Indonesian Army's bases and lines of supply. The exact opposite occurred -- the Sri Lankan civil war dragged violently on for five more years, but Indonesian President Susilu Bambang Yudyuhono managed to sign a peace agreement with the Free Aceh Movement (GAM) within six months of the disaster. A final reason for caution is that the scope of the disaster is not yet clear -- particularly at the Fukushima nuclear power plant, where a few dozen engineers bravely remain to cool the reactor cores.

Yet as Japanese scholars and citizens themselves begin considering the future -- and as American rating agencies and pundits hit a drumbeat of negative and often ill-informed predictions -- it seems both appropriate and necessary to at least frame the possibilities of what comes next for Japan.

The first thing that can be said about the disaster is that it has highlighted both the traditional strengths and the adaptability of Japanese society. The world press has marveled at the stoic resolve and orderliness of the Japanese public as they queue for hours for scarce supplies without breaking the rules or complaining. This is precisely the national character that allowed Japan to rebound from even greater disasters such as the Edo fire of 1657, the Kanto earthquake of 1923, and the aftermath of the Pacific War's end in 1945, when the Emperor announced that the Japanese people would have to "endure the unendurable"... and they did. The response has also highlighted the adaptability of Japan. After studying shortcomings in the response to the 1995 Kobe Earthquake, the Japanese government strengthened coordination with the Self-Defense Forces and created crisis management centers across central and local government. This preparation has saved countless lives, even as the government struggles on multiple fronts because of the scale of the disaster. Even more impressive has been the activism of Japanese civil society and especially of Japanese youth; frequently dismissed in recent press analysis as self-obsessed "herbivores," they have mobilized spontaneously through Facebook and other social media and have been shown carrying elderly citizens to high ground on their backs.  

The disaster will likely have at least some impact on Japanese security and foreign policy. The government's poor response to the 1995 Kobe earthquake was seized upon by national security realists to argue for changes in emergency legislation and greater acceptance of the Self Defense Forces as an instrument of national power. Fiscal realities may keep defense spending below 1 percent of GDP, but the disaster will reinforce calls to remove impediments to the SDF's rules of engagement and for greater interoperability with the United States (Operation "Tomodachi" -- the relief effort by the 50,000 U.S. personnel in Japan -- is the largest joint and combined operation between the United States and Japan ever). Japan's relations with China and Russia, which were abysmal before the crisis, may thaw somewhat now. Beijing's 15-man rescue team could take some of the edge off of the Sino-Japanese tensions -- 86 percent of Japanese said in recent polls that they do not trust China -- though the root cause of the tensions, PLA operations around Japan, are unlikely to change.  Putin's decision to set aside differences over the Northern Territories for now in order to help a "good neighbor" may have a more lasting effect, since the root causes of friction between Tokyo and Moscow were always more political than structural or strategic. Finally, many Japanese friends are telling me that the world's outpouring of support and assistance is reminding average citizens in Japan how important it is for Japan to also make its own "international contributions" in terms of ODA and security. Of course, this impulse will be in competition with the understandable desire to focus on reconstruction at home over the coming years.

Japanese economic production will definitely recover from the disaster. The damage estimates are generally well above US $150 billion, and Japanese business surveys are expecting a big hit on manufacturing output over the coming months. However, the economy is still expected to grow overall in JFY 2011 (April 2011-March 2012) once corporations adjust their supply chains and reconstruction spending begins.  Moody's Investors Service is warning that the huge financing needs may erode investor confidence in the country's ability to repay its debts, but this underestimates the likelihood that Japanese citizens will buy reconstruction bonds (over 90 percent of Japanese debt is already domestically held) and ignores the huge amounts of cash Japanese banks and corporations have been sitting on the past year. (Moody's also downgraded South Korea's sovereign debt rating when Roh Moo Hyun came to power in 2003on the dubious logic that relations with the United States would deteriorate.) However, even if production recovers, that still leaves the question of whether Japan will revitalize its basic economic growth strategy. Phil Levy rightly pointed out in his post that the Japanese political classes could become addicted again to Keynesian approaches to growing the economy. On the other hand, Prime Minister Kan had already begun to embrace measures that would unleash greater competition in the Japanese economy, including participation in the Trans Pacific Partnership free trade negotiations. That specific debate will probably be on hold for a few months, but the economic reformers behind it will seize on the reconstruction strategy to argue for even bolder measures to revitalize economic growth. Decisions about how to raise money for reconstruction -- for example, whether to include incentives for private equity and not just rely on debt -- will reveal the prevailing direction of the economic strategy debate in the coming months.

Numerous Japanese commentators had recently argued that the nation needed a shock to accelerate the kind of opening, reform and revitalization that Japan embraced after Commodore Perry's ships landed in Edo Bay on July 8, 1853 and the war ended in August, 1945. While no one could have anticipated or called for the enormity of the heart-wrenching human tragedy of March 11, the nation again finds itself at an important turning point. And history would strongly suggest that Japan will emerge stronger.

International Relations theorist Charles Glaser has joined a growing chorus calling for the abandonment of Taiwan. His take on why we should abandon the island is tucked into his "nuanced version of realism" argued on the pages of Foreign Affairs. As do most "abandon Taiwan" arguments, he begins with a "realist" argument for why war between the United States and China is unlikely. Why? Because besides Taiwan, Sino-U.S. interests are compatible.

Parting company with other "pessimistic" realists who believe that "power transitions" -- the historic condition of a rising power challenging the existing hegemon -- more often than not lead to war, Glaser believes that this time it is different. The security dilemma (in pursuing our security we take steps which decrease their security which leads them to take steps which decrease our security, a process that can end in conflict) in the Sino-U.S. case. The task for Beijing and Washington (but mostly Washington) is to trust that each country just wants security, not domination. 

For example, the United States should not fear China's nuclear build-up because of Beijing's limited ability to strike the U.S. homeland. According to this logic, the United States should forego temptations to increase its own nuclear arsenal in response to China's own increases. All China is doing is increasing its security with a second strike capability. In turn, China should not fear U.S. conventional capabilities because most are resident across the Pacific.

But ultimately, the argument goes, it is up to the United States and not China, to make adjustments to its security posture and not exaggerate threats that China poses. The United States is safe because China will never have the means to destroy its deterrent.

Glaser concedes that this theory overlooks the fact that U.S. security alliances could seem threatening to China. Here we get to the nub of his argument. The United States must ask itself how important its security alliances are. Unlike "Neo-isolationists," Glaser, an advocate of "selective engagement," believes that the alliances with South Korea and Japan are important. And the United States could defend those alliances without creating a debilitating arms race if it provides just enough conventional deterrence, plus the threat of nuclear retaliation should those countries come under attack.  

To Glaser, Taiwan is different. China's belief that Taiwan is part of it is non-negotiable, and Beijing and Washington have very different views of what constitutes the status quo across the Strait. The Taiwan dispute has no diplomatic solution and the risks of nuclear war are getting too high, particularly with China's advancing second strike capability. His answer is for the United States to make the necessary "adjustments" and abandon Taiwan.

He acknowledges potential critics who may say appeasement usually whets the appetite of the appeased. But, says Glaser, not all adversaries are Hitler, and China has limited territorial goals. Even if China has more expansive territorial claims, the United States can remediate any military imbalance through a greater conventional presence.

In the end, the real danger is a self-fulfilling prophesy, a failure by the United States to realize that its basic goals are compatible with China's. Glaser fears that this is already happening -- the United States is taking a much more competitive military stance because its ability to operate along China's periphery is in danger. According to Glaser, this dilemma has two solutions. The first is for Washington to realize that U.S. interests are changing -- Taiwan is not really vital. And second, the United States should forego the kind of nuclear superiority that could counter China's second strike capability. Problem solved.

This is a fairly conventional international theory argument about the relative stability of Sino-American relations. Glaser is essentially taking a side in an old debate. His innovation is the abandonment of Taiwan, a necessary step to decrease the security dilemma and reveal China's truly limited aims.

Read on

After campaigning on the untenable promise that he would meet with leaders like Kim Jong Il without preconditions, President Obama has actually approached North Korea with a firmness that sometimes eluded the Bush administration in its last year. The Obama administration has strengthened trilateral security coordination with Japan and South Korea; implemented tough U.N. Security Council sanctions against the North after its nuclear tests; and rebuffed Chinese pressure for emergency six-party talks in the wake of Pyongyang's unprovoked attacks on South Korea. Given the North's escalating provocations and nuclear cheating and Beijing's dangerous complacency, this is the only strategy that has a prospect of deterring further belligerency and reversing the incentives the North sees in proliferation on the peninsula and beyond.

This past week, however, senior Japanese and South Korean officials are reporting that the administration has begun signaling to them that the United States is ready to "shift back to dialogue" with the North. The Blue House in Seoul now feels under pressure to accelerate its own resumption of North-South dialogue so that U.S.-DPRK talks can get under way (since the administration has rightly stated that it would not get ahead of its ally South Korea's own diplomacy toward Pyongyang). In Tokyo there is an eerie sense of déjà vu at yet another potential swing in the pendulum of U.S. North Korea policy. Both Tokyo and Seoul want some dialogue with the North, and the administration deserves credit for how closely it has coordinated strategy with both capitals. But since the Hu Jintao visit to Washington, the dynamic seems to have shifted from U.S.-Japan-ROK trilateral pressure on China to rein in the North to a new pattern of U.S.-China pressure on Seoul to pick up the pace of engagement (that, at least, is how one senior ROK official put it to me). Given our inconsistent history on North Korea to date, one can understand why our allies would be a bit nervous about where all this might go.   

Read on

President Obama had a good year in Asia in 2010. It featured a more realistic China policy, a breakthrough visit to India, the shelving of an irritating base dispute with Japan, a surge of U.S. forces in Afghanistan that is creating results, intensification of a successful drone campaign against terrorists in Pakistan, and closer cooperation with key Southeast Asian nations. But challenges loom: China's growing assertiveness, mercantilistic trade policy, and development of anti-access capabilities that erode U.S. deterrence commitments in Asia; North Korean belligerence; Burmese repression and proliferation; and the continuing weakness of the Afghan and Pakistani states. How can President Obama counteract these trends in the new year while building on previous successes?

1.Implement a long-range strategy to sustain U.S. primacy in Asia in the face of China's challenge.

This means diversifying U.S. military-access and basing rights beyond Japan and Korea, deepening missile defense collaboration with these and other countries (including Taiwan), building up naval power in the Pacific and Indian oceans, and investing in next-generation technologies to counteract asymmetric Chinese weapons systems. With sustained commitment and smart investments, the United States is well-positioned to sustain its military edge in Asia, in part because nearly all regional powers find it reassuring and want to enable rather than constrain it. The harder work may be at home: decisively investing in the domestic reforms that liberate the United States to shape a new century, rather than wallowing in growing indebtedness and domestic discord.

2. Invest in the rise of key countervailing Asian powers that can contribute public goods of stability and security.

This includes prodding Japan, with its enormous but latent military and technological capabilities, to act on its new defense guidelines to become a "normal country" that is a net security provider in Asia; investing further in India's ascent to the top tier of global powers and partners; and working with Indonesia and Vietnam to develop the means to contribute to regional stability while maintaining their independence vis-à-vis their giant neighbor. It also means incorporating Russia into the Asian strategic equation in ways that reinforce common interests in sustaining the balance of power.

3. Unite the democracies.

Concern about China is accelerating the development of an array of minilateral groupings among regional democracies. These include U.S.-Japan-Australia, U.S.-Japan-Korea, and U.S.-Japan-India trilaterals as well as new security pacts between Japan and India, Japan and Australia, Australia and India, and India and South Korea. In the meantime, all these countries are working to forge closer strategic ties with Indonesia, a next-generation BRIC. An infrastructure of democratic security cooperation could help deter proliferation from problem states like North Korea and Burma, incentivize China's peaceful rise, and secure increasingly contested maritime commons.

Read on

Congratulations to President Obama and his team for successfully concluding negotiations on the U.S.-South Korea free trade agreement (KORUS) on Friday. Republicans should applaud and support the president when he pursues such a market-friendly policy. So should Democrats, of course, but the early indications are that the agreement will face critics on the left. More on that anon. Herewith eight questions and answers about what just happened.

1) What changed in the agreement?
The original KORUS was signed in the summer of 2007, more than three years ago. Up until late last week, Obama and other critics had derided that accord as unsatisfactory. So what changed?

The headline revisions were in the auto sector. Ford, in particular, was upset about the obstacles it faced trying to sell into the Korean market while Korean producers like Hyundai enjoyed lucrative access to the U.S. market. In the revised agreement, Korea promises changes to emissions and safety restrictions that Ford argued were discriminatory. Tariff schedules were also reworked to slow market access for car producers on each side (i.e., less rapid liberalization).

Korea, in turn, will phase out its tariffs on U.S. pork exports more slowly than previously planned, will get more favorable visa treatment for workers coming to the United States, and will slow down changes to its patent system that U.S. pharmaceutical makers wanted.

2) Is it better than the first version of KORUS in 2007?
One agreement is indisputably better than another if it makes some groups better off and leaves no one worse off (that's "Pareto efficiency" for those who enjoy slinging econ jargon). This revision is not that. Ford is happier while pickup buyers and pork exporters are not. Weighing one group's interests against another's is a political calculation. The answer depends on who your friends are.

3) Was it worth the wait?
No. The bulk of the benefits of this agreement could have been had years ago and U.S. trade policy has been held hostage ever since.

Read on

The pattern is sickeningly familiar. North Korea reveals (or is caught with) a previously unknown nuclear weapons program (except that the intelligence community had warned it was there all along). The United States and its allies vow that this will only lead to further "isolation" of the North (next the comfy pillow). North Korea pledges to bring all out war to the peninsula and engages in dangerous military escalation. The North then invites some well-meaning Americans to Pyongyang to profess their sincere interest in de-nuclearlizing the Korean peninsula, if only the United States would abandon its "hostile policy." Beijing calls for restraint on all sides and an immediate return to talks. The administration is skeptical, but seeing no other path agrees to return to the talks. An agreement is finally hammered out where the North freezes the least interesting part of its fissile material production (temporarily, of course) in exchange for sanctions relief, heavy fuel oil, aid or other concessions. The North waits, cheats on the agreement, creates another crisis, and continues marching towards its goal of marrying nuclear warheads to ballistic missiles and winning acceptance as a full nuclear weapons state.

....repeat as necessary.

And repeat North Korea has. With the North-South denuclearization accord in 1991 (violated); the Agreed Framework in 1994 (violated); the DPRK-Japan Pyongyang Declaration in 2002 (violated); the 2005 Six Party Joint Statement (violated) and the 2007 and 2008 Six Party agreements (violated).

But this time, according to former President Jimmy Carter in the November 24 Washington Post, North Korea really is interested in an agreement for denuclearizing the Korean peninsula.

Anyway, back to what is really happening. And that is this. Kim Jong Un, the 27-year-old third son of Kim Jong Il (recently promoted to Four Star General) needs to demonstrate that he is willing to go all the way to war (in the worlds of the DPRK's Japanese language website). When Kim Jong Il had his coming out party in the 1980s, he demonstrated his bona fides by directing operations to blow-up the South Korean cabinet in Rangoon and plant a bomb in a Korean Airlines Flight, killing everyone aboard.

That is the first goal. The second goal is to knock the United States and its allies off guard after revealing to former Los Alamos National Laboratory Director Sigfried Hecker that the North had built an advanced uranium enrichment facility in violation of all its prior agreements. Sanctions and pressure? Only if you are prepared to be met with massive firepower. That is the message to the outside world.

This round of the North Korean game is more dangerous though, for two reasons. First, Kim Jong Un is on much shakier ground than Kim Jong Il was three decades ago. The fabric of North Korean society and the legitimacy of the regime are much more fragile. It is not clear whether the younger "Great General" or the aging "Dear Leader" will be able to pull back from escalation as easily as they have in the past.

The second reason this is more dangerous is because uranium enrichment opens a new production line of potentially a bomb a year to the North. This is particularly threatening when one considers North Korea's support for Syria's El Kibar reactor construction, which Israel bombed in 2007, and Pyongyang's dialogue with Burma about a similar capability. It is also worrisome since the centrifuge facility shown to Hecker may only be one part of the North Korean uranium enrichment (and probably highly enriched uranium) capability.

The Obama administration's opening response has been smart. They have not fueled the sense of crisis in a way that would give Pyongyang more leverage, but they have shown resolve by deploying the USS George Washington to the coast of the peninsula. Now comes the hard part: changing Beijing's calculus so that China deters the North from further escalation (at a minimum) and perhaps brings enough pressure to bear to change North Korea's calculus about its nuclear weapons program (much harder). Beijing's opening response- an expression of sympathy and a call for restraint on all sides and immediate resumption of the Six Party Talks--is not promising. If we are going to dissuade North Korea from repeating business as usual, we will first have to find ways to convince Beijing that the United States is no longer going to respond as usual. That means visibly enhanced defense cooperation with Japan and Korea, a refusal to return to the Six Party Talks without North Korean moves to return to the status quo ante, and enhanced interdiction operations against North Korea based on existing UNSC resolutions. That will be uncomfortable for an already heavily laden U.S.-China bilateral agenda, but so be it. 

President Obama’s failure to conclude the Korea-United States Free Trade Agreement (KORUS) is a disaster. It reveals a stunning level of ineptitude and seriously undermines America’s leadership in the global economy. The implications extend far beyond selling Buicks in Busan.

Unlike some of the trade agreements the United States has pursued in the last decade, this one is with an economically significant partner. KORUS could bring billions of dollars of new trade opportunities and the Obama administration had cited it as one part of its National Export Initiative, a plan to double U.S. exports in five years.

But there are really two distinct issues in contemplating the significance of the failed talks: the economic merits and questions of diplomatic competence. The latter is really the story of the day.

The economic merits and demerits have been in full public view since the agreement was originally concluded in the spring of 2007. The agreement offered substantial market opening, but left some questions regarding access to the South Korean market, especially for U.S. autos and beef. Those products face barriers other than simple border tariffs. Such non-tariff barriers are harder to negotiate away, though the KORUS agreement certainly tried. There was substantial political opposition to the agreement within both countries, though the Koreans managed to overcome theirs. Influential voices such as Ford Motor Co. and organized labor in the United States criticized the agreement as inadequate.

The well-established opposition just brings us to the stunning, perhaps unprecedented diplomatic incompetence just displayed by the White House. The concerns and obstacles that impede a new KORUS agreement were fully apparent in June when Obama announced he would have an agreement in time for the Seoul G-20 meetings (now underway). The announcement was remarkable at the time because so much of the U.S. president’s statements on trade have been vague, aspirational, and timeless. This was a promise to have a specific agreement concluded by a specific date.

Reflecting on the health care battle, Obama recently told 60 Minutes, "When you're campaigning, I think you're liberated to say things without thinking about, ‘OK, how am I going to actually practically implement this.'" That may be true, but the rules change once a president takes office. Most White Houses are exceedingly careful about making such public commitments. If the president’s credibility is to be put on the line, there is an absolute imperative to deliver. This is at least as true in international diplomacy as in domestic affairs. The debacle in Seoul is a slap in the face of a critical U.S. ally in a critical region, and it will cast doubt on U.S. trade promises in other negotiations elsewhere. But if an American president loses his credibility, the damage spreads beyond the narrow confines of economic deals and Northeast Asia.

Of course, Obama did not admit defeat. He spoke of the setback as a mere postponement. "We don’t want months to pass before we get this done. We want this to be done in a matter of weeks." If the agreement really is just a few weeks' work away, the administration ought to be deeply embarrassed. After the president made his June commitment, no formal talks were held with the Koreans until the end of September. Even then, the Koreans complained that the U.S. negotiators were not being sufficiently specific in their proposals. If the problems really are just technical ones, the Obama team has played the role of the student who procrastinates on a term paper, counting on the ability to have a really productive all-nighter. Such a work program evokes little sympathy when it doesn’t succeed.

More likely, though, the obstacles are not technical but political. The lineup of advocates and opponents for KORUS poses difficult choices for the White House. Traditionally, governments around the world make such tough trade choices when they are right up against a deadline. But if the deal could not be concluded under the pressure of a high-profile bilateral meeting between presidents in Seoul, is it really plausible that it will be wrapped up because negotiators want to be home for Thanksgiving?

The breakdown could not have come at a worse time. The United States has been working to assert its relevance in Asia. Concerns about protectionist pressures amidst economic troubles raise the stakes in bolstering the global trading system. Beyond economic questions, countries around the world are wondering about the strength of a president who just suffered a major political setback.

Though he may not have foreseen all of the difficulties he would be facing at this juncture, last summer Obama named the time and place of his global credibility test. And he just failed it.

While U.S. voters were not particularly interested in foreign policy (certainly not Asia policy) during this election, Asia is always interested in U.S. voters. The economic growth of countries such as China and India, and the technological and innovative dynamism of much of the rest of Asia, are significantly impacting the structure of the U.S. economy. Newly elected Republicans have a chance to help the United States continue to benefit from Asia's growing prosperity.

Though the election was not about foreign policy, it is worth noting that former Vice President Dick Cheney's early 2009 critique of Obama's counter-terrorism policies first exposed the chinks in the administration's armor, demonstrating signs of life for a Republican Party declared dead and providing moral support to others in his party who soon voiced their own powerful critiques. Still, this election was about economics and the size and structure of government, not foreign policy. So, I am about to practice economics and politics without a license.

While voters still do not seem to trust the GOP, the party can regain their trust by reclaiming the mantle of economic leadership. Newly-elected Republicans can insist upon free market, pro-free trade policies that can push the president to create a friendlier climate for foreign investment in the United States as well as to ratify a free trade deal with South Korea and pry open other Asian markets for U.S. investment and exports.

By committing to fiscal responsibility, Republicans can provide a more credible case for the global rebalancing that economists agree needs to happen. A collective economic rebalancing, rather than a trade war or legislating punitive tariffs, is the answer to our current economic troubles with China. And a broader commitment to U.S. leadership in trade liberalization throughout Asia will contribute to setting the United States back on the road to economic growth and low unemployment.

But the United States is on the horns of a dilemma in Asia, one that new Republican leaders must resolve. Our huge debt and uncertain fiscal position calls into question our ability to sustain a robust diplomatic and military presence in the region; if fiscal austerity includes cuts to the defense budget, Asians will continue to conclude that we are not going to be present in Asia for the long haul. In the context of Asia policy, then, the key challenge for Republican leaders both in Congress and aspiring to the presidency is to strike the right balance between pursuing long-term measures to restore fiscal health without making short-term cuts on defense spending that create deep regional unease.

The first chance for Republicans to reconcile long and short term goals with respect to Asia is during Obama's trip to the region. They should pledge to work with him if he agrees to ratify the FTA with Korea, hold his feet to the fire if he panders to special interests on the issue of outsourcing to India (or what I like to call trading based on comparative advantage), and pledge to support him if he commits to keeping our alliances strong by making the military investments we need to keep the region stable.

The anointment of a new leader of the Chinese Communist Party has usefully re-focused the world's attention on how China might use its growing economic, military and diplomatic power and influence in the coming years, and how its neighbors, and especially the United States, will respond. A lot is riding on China's decision. The regional and even the international order for the coming decades, and perhaps longer, will depend on which pathway it selects.

The Chinese have a talent for developing aphorisms that can apply to any situation, and so I've decided to borrow from that tradition and call my remarks "The Four Hopes, the Five Preferences, and the One Test."

Now, a rising China is nothing new. It has been predicted, and feared, for well over two centuries. In the United States, it has long been a repository of hope for those people who had both the vision to understand China's potential and the arrogance to think that the United States could actually shape China to meet our desires.

During the 20th century, these hopes found expression in three separate areas. In the early part of the century, China was viewed as a vast and lucrative market for American goods. The Harvard historian Ernest May tells us that one of the books on China that was popular at the time was called Four Hundred Million Customers. The thinking was that U.S. factories could be prosperous beyond belief if only each Chinese would buy one ... well, one of anything we produced.

Coexisting with this first hope of unimagined riches from trade with China was a second hope, one more concerned with the next world than this more temporal one. Many Americans saw China as a great opportunity to convert pagans to Christianity. More important than four hundred million consumers, there were four hundred million souls waiting to be saved.

The middle of the 20th century saw a third U.S. hope for China: that it would become a thriving democracy. Henry Luce and his media empire of TIME, Life, and Fortune magazines relentlessly trumpeted to the American people the potential waiting to be unlocked by a China comprised of unfettered markets, religious converts, and especially Jeffersonian democrats.

Read on

Well, that was awkward. The world's leading economic authorities just gathered in Washington for a weekend session of policy glowering. Heading into the regular fall meeting of the World Bank and International Monetary Fund, there was some hope that some constructive, multilateral dialogue could defuse tensions and calm talk of currency wars. It was not to be.

What happened? The United States went into the meetings pushing for multilateral solutions, in particular an enhanced role for the IMF. In a speech at the Brookings Institution last week, Treasury Secretary Tim Geithner addressed the issue of global misalignments:

This problem exposes once again the need for an effective multilateral mechanism to encourage economies running current account surpluses to abandon export-oriented policies, let their currencies appreciate, and strengthen domestic demand.

He noted that this was part of the long-standing mission of the IMF, then went on to argue that the world's powers had already agreed to address these issues:

Read on