Development of economic ties between Russia and Japan important for improving relations Analytic

22 May 2016. PenzaNews. Russia is ready to hold dialogue with Japan and continue talks on a peace treaty through discussions on the territorial issue, Russian President Vladimir Putin said at a briefing following the ASEAN – Russia Summit in the Black Sea resort of Sochi on Friday, May 20.

Photo: Kremlin.ru

He also stressed that Moscow does not link the economic partnership with Japan and the existing territorial disputes between the countries.

“We are not selling anything. We are willing to buy many things but we are not selling anything. However, we are ready and willing to have a dialogue with all our partners, Japan included, particularly on concluding the peace treaty, in the context of which we discuss the territorial issue,” Vladimir Putin said answering the question if he considers selling the islands to Japan at a high price.

Moreover, he reminded that Japan is an essential partner of Russia in the Asia-Pacific region and in the world.

Earlier, during his May visit to Sochi, Japanese Prime Minister Shinzo Abe suggested a “new approach” to solving the territorial dispute with Russia.

“We will proceed with the negotiations with a new approach, free of any past ideas,” he said in an interview to one of Japanese TV channels.

During the meeting, Shinzo Abe and Vladimir Putin also discussed the issues of economic cooperation between the two countries, paying special attention to trade, economic and investment matters.

“Clearly, for various reasons, our trade turnover has been on a downward trend but today, both leaders stressed their commitment to search for ways of rectifying the situation, and not only through the development of only trade ties but also through the implementation of major investment projects,” Russian Foreign Minister Sergey Lavrov stated.

Analyzing the situation in the region, Nigel Gould-Davies, Associate Fellow, Chatham House, noted that Japanese statements of “new approach” that had been agreed to the long-standing territorial dispute with Russia caught the attention of many international observers.

“At this stage we can only speculate what an agreement might look like and what its significance would be. The long-standing positions of the two countries appear to be irreconcilable. So a breakthrough implies that one or both sides has made a concession on the issue of territoriality,” the expert told PenzaNews.

According to him, Japanese leadership’s desire to conclude a peace treaty with Moscow rests on a number of reasons.

“Abe’s interest in easing this obstacle to a stronger bilateral relationship appears to be high, perhaps driven in part by the Japanese wish to deepen the energy relationship. There may also be a personal element, given that his father, as Foreign Minister, worked hard though ultimately unsuccessfully to resolve this issue,” he explained.

However, domestic opinion in Japan will watch closely for signs of a shift in the government’s position, and may well be a constraining factor, he said.

“As for Russia, the attraction of a diplomatic breakthrough with a highly-developed Asian country is obvious. It would put flesh on the bones of the Asian ‘pivot’ so evident in Russian policy and would also show that there is more to this policy than a closer relationship with rising China, which carries its own risks in the longer term,” the analyst stated.

From his point of view, Vladimir Putin is less domestically constrained on the issue of disputed territories than Shinzo Abe.

“But the dominant theme until now has been that Russia is strengthening its sovereignty,” Nigel Gould-Davies said.

In turn, David Warren, former British ambassador to Japan, Associate Fellow, Chatham House, suggested that Shinzo Abe will want to use the G7 Chairmanship to make “as positive progress as he can towards a resolution of the Northern Islands issue”.

“He has a direct interest in doing so in order to remove, or at least neutralize, an unresolved territorial issue with an important neighboring country at a time when Japan’s relations with its other neighbors are in various degrees of difficulty – continued rivalry and tension with China, tensions with North Korea’s nuclear ambitions, and still not completely resolved issues with South Korea relating to Japan’s conduct during the war,” the expert explained.

However, according to him, the constraints on Shinzo Abe will be a reluctance to step too far out of line of the US and Europe.

“While this has an impact on Japanese investment in and trading links with Russia, Japan’s wider strategic interests, at a time when East Asian countries generally are concerned about Chinese ambitions to exclude US influence in the region, lie with maintaining and strengthening the US-Japan Security Alliance, which has been the keystone of security in the region since 1960,” the analyst said and added that Shinzo Abe would not want to compromise the unity of the West’s position on Moscow.

“Japanese Prime Minister will want to advance the Northern Islands dossier, perhaps by being a bridge between the G7 and Russia, in terms that strengthen the Japan-Russia relationship to China’s disadvantage, but which do not damage the US-Japan Alliance that would potentially have an impact on East Asian confidence in the US ‘pivot to Asia’,” David Warren said.

Masashi Nishihara, President of Research Institute for Peace and Security (RIPS) in Tokyo, former President of National Defense Academy, also pointed to the desire of the Japanese Prime Minister to counterbalance the rise of China in the West Pacific.

“This is one area where the two countries share their interest, although Japan considers that Russia has been too close to China. China is threatening to dominate the Russian Far East,” the expert said.

According to him, the only question that the two countries disagree on is “the Northern Territories.”

“I do not predict that there may be some progress on the issue of the islands. Vladimir Putin may give some hopeful signs for progress, but I think that he will be extremely cautious on giving Shinzo Abe any sign of compromise,” the analyst said.

In his opinion, proximity of Vladivostok to Japan could have a positive impact on bilateral ties, but this advantage is seriously underestimated.

However, the meeting was fruitful as the countries may also issue agreements on economic cooperation projects, he said.

In turn, James Brown, Associate Professor of Political Science, Temple University, Japan Campus, said that relations with Russia became a key foreign policy priority for Japan.

“The most important reason for Abe’s enthusiasm for developing closer ties with Russia is his hope that he could be the Japanese leader to finally settle the territorial dispute. The second reason is his recognition of the important role of Russia in the future security of North East Asia. At present, Japan is able to rely on the security guarantee of the United States. There are worries in Tokyo, however, that this security guarantee may not permanently endure. As such, Prime Minister Abe wishes to reduce Japan’s overdependence on the United States by increasing the country’s capacity to act independently and by also building closer ties with other countries in the region, including Russia,” the expert explained.

He also stressed that Japanese foreign policy is usually defined by caution and a reluctance to distance the country from the position of the United States.

“On this occasion, however, Prime Minister boldly decided to disregard the advice of US President Barack Obama, who had warned the Japanese leader about visiting Russia at this time. This fact is clear confirmation of the importance with which Abe regards relations with Moscow,” the analyst noted.

He also added that there was not any meaningful progress on the issue of the disputed islands.

“From the Russian perspective, the most significant outcome was the agreement on increased economic exchange. The Japanese side hopes that economic incentives will encourage the Russian leadership to compromise on the territorial issue. In particular, many in Japan believe that Russia’s current economic difficulties provide Japan with an opportunity to use economic leverage to obtain territorial concessions,” James Brown said.

He stressed that Japan and Russia remain far apart in their views of this dispute.

“The Russian government has indicated that the maximum concession that they would be willing to agree to would be the 1956 Joint Declaration which suggests that the two smaller islands of Shikotan and Habomai would be transferred to Japan. The Japanese side, however, considers this offer insufficient and is determined to hold out for a deal that would also provide them with something more. In particular, Abe seems to hope to secure the following deal: Russia would recognize the legitimacy of Japanese claims to sovereignty over Kunashir [Kunashiri] and Iturup [Etorofu]; in return, Japan would agree to allow Russia to continue to administer the islands for an extended period and would provide Russia with extensive economic assistance,” the expert said.

“The Japanese side considers that this is a potentially appealing deal. They do not appear to recognize that it is essentially unthinkable that a Russian leader would voluntarily give up sovereignty over the two larger islands, which are regarded in Russia as an important legacy of Soviet victory in World War II,” he added.

Meanwhile, Hironori Fushita, Research Fellow at Japan Institute of International Relations, called the Sochi visit of Shinzo Abe a symbol of the “reset” of bilateral cooperation.

“The sanctions had a negative impact on the bilateral relations between Tokyo and Moscow. Many Japanese companies are willing to expand their presence in the Russian market, but they have to be careful as they also cooperate with the US and the EU. Japanese businessmen want to get official approval for the strengthening of cooperation with Russia, and Prime Minister’s 8-point economic cooperation plan can become a kind of momentum for the Japanese industry,” the analyst said.

In his opinion, the most important thing of the meeting is that the two leaders agreed to accelerate dialogues aimed at signing a peace treaty.

“The lack of a formal treaty has become a most significant barrier to development of our relationships. In order to enhance multifaceted cooperation between Japan and Russia, it is necessary to conclude a peace treaty. It is hard to say that there was a significant progress on the territorial issue at this visit, but the important thing is that we can find steady progress to resolve the problem,” the expert stressed.

According to him, Japan and Russia have already done a number of measures to enhance cooperation and the mutual trust.

“At government level, you can see the increase in visit of Russian high officials to Japan. It is very important and helps continue high-level political dialogues. There is a significant progress in business field, too: our mutual understanding and trust is deepening. In order to enhance the trust, we have to derive benefit from concrete collaborative projects and see each other as reliable partners,” Hironori Fushita comcluded.

The Kuril Islands (also known as the Northern Territories) are volcanic islands that stretch about 1,200 km northeast from Hokkaido, Japan, to Kamchatka, Russia, separating the Sea of Okhotsk from the North Pacific Ocean. The total land area is about 15,600 sq km.

In 1745, a large part of the Kuril Islands was mapped to the General Map of the Russian Empire in the Academic atlas.

In the second half of the XVIII century permanent Russian settlement existed in the Kurils.

The Japanese moved to the Northern Kurils in parallel with the development of the Kurils by Russia. In 1795, Russia built a defensive fortified military camp on the island of Urup.

By 1804 the islands had the dual power: Russia’s influence was felt more strongly in the Northern Kurils, Japan’s — in the South. Formally, the Kuril Islands still belonged to Russia. In accordance with the map of 1809, the Kurils and Kamchatka were attributed to the Irkutsk region.

On 7 February 1855, the countries signed the first Russian-Japanese treaty, under which all the Kuril Islands to the north of the Iturup island were declared Russian.

In accordance with the Russian-Japanese Treaty of 1875, Russia ceded to Japan 18 Kuril Islands. Japan, in turn, recognized the island of Sakhalin wholly owned by Russia.

In the period from 1875 to 1945, the Kuril Islands were under the Japanese rule.

Under the decision of the Yalta Conference of heads of the USSR, the USA and the UK held in 1945, the Kuril Islands were to be transferred to the Soviet Union after the war against Japan.

As a result of the Kuril landing operation August 18 – September 1, 1945, the Kuril Islands were liberated from Japanese troops by the Soviet Army.

On 2 September 1945, Japan signed the unconditional surrender, accepting the Potsdam Declaration of 1945, according to which its sovereignty was limited to the islands of Honshu, Kyushu, Shikoku and Hokkaido and the smaller islands of Japanese archipelago. Iturup, Kunashir, Shikotan and Habomai passed to the Soviet Union.

On 2 February 1946, Iturup, Kunashir, Shikotan and Habomai were incorporated into the Soviet Union by the Presidium of the Supreme Soviet of the USSR.

According to the San Francisco Peace Treaty of 1951, Japan renounced all rights to the Kuril Islands. Soviet delegation did not sign the treaty, saying that it considered it as a separate agreement between the governments of the United States and Japan.

Joint Declaration of the Soviet Union and Japan of 1956 officially put an end to hostilities between the two countries. Moscow agreed to transfer Shikotan and Habomai to Japan after the peace treaty, however, the Japanese government insisted on the transfer of all four islands – so a peace treaty was not signed.

After the conclusion of the Japan-US Security Treaty in 1960, the Soviet Union withdrew commitments made by the Declaration of 1956.

In 1993, the Russian President and Prime Minister of Japan signed the Tokyo Declaration on Japan-Russia relations, according to which the parties agree to continue negotiations for an early conclusion of a peace treaty.