Fourth, I wonder what the balance sheet of this negotiation would look like. I don’t quite understand why Abe is pursuing this deal so eagerly. I know that almost every Japanese Prime Minister has been driven by personal ambition to solve the Northern Territory dispute. But Abe seems to be clearly overdriven.

What Russia would receive is clear if the deal is done between Abe and Putin. Kremlin will gain large economic assistance to help its weak economy, and it will score diplomatic points in the face of difficult relationship with the West. It’s ideal for Putin if he can settle the deal without substantially compromising on the territorial issue.

On the other hand, the payoff of the deal is not very clear for Abe and Japan. If Abe can recover the four islands in the coming deal with Putin, that will be fine enough. But such a successful deal will be very unlikely as I will discuss later. Return of the two islands of the Shikotan and the Habomais, occupying only seven percent of the total acreage of the four islands, will not match big economic assistance, exceeding ten billion dollars as recently reported.

When Hatoyama and Shigemitsu negotiated with Moscow in 1950s, they had clear missions. The recovery of the islands was only a part of them. Japan must resume diplomatic relation with the Soviet Union who had vetoed Japan’s entry into the United Nations. It also needed to get the Japanese soldiers in Siberia back home, and resume fishing in the northern Pacific. Japan-Soviet Joint Declaration of 1956, although lukewarm (or a failure as a result) in terms of the solution of the Northern Territories dispute, achieved at least these three goals successfully. If Japan can achieve big national interest in the fields other than the territorial issue, I believe the coming deal would be worthy of trying hard. Let us check from this stand point of view.

Will Japan gain big economic merits from investment in Russia? Frankly speaking, Russia is not a very attractive market. The size of Russian Gross Domestic Product is smaller than that of South Korea. Its economy is heavily dependent on the crude oil price, meaning it will continue to lose momentum at least in the near future. The population declined for about two decades after the collapse of the Soviet Union, and Russia will continue to suffer the demographic problem unless it increases immigration drastically.

Isn’t it good for Japan to diversify the supply source of crude oil and natural gas by investing in the Russian energy industry? Theoretically, yes. But the past behavior of the Russian government suggests that Kremlin may maneuver our energy dependence on them as a political tool for another bargaining.

Is the deal regarded as a strategic bargain for Japan? Abe claims that his new approach has “a global viewpoint” in the negotiation with Russia, implying the Japanese government wants to take advantage of the improved relationship with Moscow to check the provocation by China and/or North Korea. Russia should be also benefited by the better relationship with Japan in managing its relationship with China. The benefit of strategic bargain for Japan, however, will be subtle. For Russians, the economic gain from the rapprochement with Japan will never exceed the economic and strategic merit from the Sino-Russian entente. Economically, the share of Russian trade with China was 11.3%, whereas the share of Japan was only 3.9%. Strategically, both China and Russia need each other as long as they have tense relationship with the United States. Tokyo will never be able to separate Moscow from Beijing.

What about a peace treaty with Russia? Prime Minister Abe says the situation where Japan and Russia have not concluded a peace treaty for 67 years since the end of World War II is abnormal. Sounds it surely is. To be cool-headed, however, lack of a peace treaty with Russia causes no substantial inconvenience. Japan already has a diplomatic relationship with the Soviet Union and Russia since 1956. It’s more than a quarter century since the cold war ended, and we don’t have to worry that Russia will invade Japan. Even without a peace treaty, the Japanese government, if it wishes, can offer economic assistance to Russia as much as it wants.

These considerations cannot help making me have a bad premonition about the coming deal between Abe and Putin.

Third, I have to argue that Japan’s basic strategy to substantially buy the territory in exchange for the massive economic assistance is doomed to fail.

Historically, there were cases where the nations traded territories. Napoleon sold French Louisiana to the United States in 1803. Russian Alexander II sold Alaska in 1867. But these examples fundamentally differ from the Northern Territories. French Louisiana and Alaska in the 19th century were not very important both economically and strategically. Napoleon understood that the Great Britain would sooner or later take over Louisiana. They were both remote colonies and the titles to them were not really the subjects to nationalism. Two dictators did not really have to care how their people received their own decision.

The Northern Territories are strongly embedded with nationalism not only in Japan but also in Russia. The percentage of Russian people who oppose the return of four islands to Japan as of May 2016 was 78%. It was down from 90% as of 2011, but still overwhelmingly high. (Mainichi Newspaper, August 5, 2016.) And it is very difficult to trade the nationalistic sentiment by money. Just after the collapse of the Soviet Union, Tokyo tried to recover four islands by offering sizable economic assistance. President Boris Yeltsin responded by showing some flexibleness on the territorial issue. However, he could not overcome the objection from Russian people. Although Russia today suffers from economic hardship as a result of sharp declines in the commodity prices and sanctions by Western countries, current economic condition is far better than that of Yeltsin’s era.

The former Soviet Union and Russia have effectively governed the Southern Kuril Islands for more than seventy years. The islands also have non-negligible values for Russians. The Etorofu and the Kunashiri host military facilities. Kremlin still sees the strategic importance of those islands.

What’s more, the Northern Territories are not desert islands. Approximately seven thousand and three hundred people live in Kunasiri. About six thousand are in Etrofu, two thousand nine hundred in Shikotan. It is unrealistic to expect Putin to order or persuade the islanders to leave. Abe and Ministry of Foreign Affairs seem to hope too much for the personal leadership of President Putin. But Putin is not a Tsar. Russia is now a kind of democracy in a sense that its president is chosen by election, so are the 450 members of Duma. Remember that Putin was moved to tears when he won the (not very fair) presidential election in March 2012. It will be very difficult for Putin and other politicians to neglect the will of the islanders and the rest of the Russian people.

We should understand that the application of the Security Treaty over the Senkaku Islands does not automatically and unconditionally guarantees the dispatch of the U.S. forces or the war between the United States and China. In order to improve the predictability, I would like to represent some examples of the action possibly taken by the U.S. government when the Article 5 of the Security Treaty is applied to a contingency over the Senkaku Islands.

# Issue statements that the United States support Japan and accuse China.

# Veto Beijing’s proposal to adopt the U.N. Security Council resolutions in favor of China. (Instead, the U.S. efforts to adopt resolutions criticizing China will meet its veto.)

# Propose to mediate between Japan and China.

# Increase military presence of the U.S. Forces Japan, including additional dispatch of aircraft carriers and/or strategic bombers.

# Pose minor sanction against China such as the limitation of human exchange.

# Share the intelligence on the Chinese military with the SDF.

# Permit the SDF to use the U.S. bases in Japan.

# Pose moderate sanction against China such as the partial limitation of trade and investment.

# Pose considerable sanction against China such as the ban of dollar settlement for the Chinese banks.

# Provide logistical support to the SDF by the USFJ.

# Combat with the PLA in the East China Sea.

# Combat with the PLA in wider theater.

The United States had a similar experience at a time of the Falkland War in 1982. It was a territorial war between the two important allies of the United States, the United Kingdom and Argentina. President Ronald Reagan finally sided with Prime Minister Margaret Thatcher. But it would be wrong to make a naïve analogy. Actually, the Senkakus contingency will be far more difficult for the U.S. government to deal with.

You can just compare the geography and the technology between the Falkland War and the Senkakus contingency. In 1982, it took three weeks for the British fleet to arrive in the battle field. Reagan instructed Secretary of State Alexander Haig to use that lead time for mediating a ceasefire. In case of the Senkakus contingency, the coast guards and militaries of both Japan and China are already there, and Tokyo and Beijing can reinforce them in a matter of days or weeks. In case of the Falkland War, the U.S. administration did not have to worry about Argentina’s attacking the United States when it decided to support the U.K. Buenos Aires lacked such capabilities and the U.S. homeland was too far apart to attack. In case of the Senkakus contingency, we all know China already has missiles and nuclear weapons covering the Japanese Archipelago, as well as the U.S. Forces Japan.

Because the choices the U.S. government will have to make at the Senkakus contingency will be very complicated, it is hard to tell what kind of choice Washington will actually make. But following five points can be pointed out.

First, how the conflict over the Senkaku Islands begins will influence the response of the United States. If Japan attacks first, or if the clash starts by accident, the U.S. may not take a strong position to support Japan. To the contrary, if China unilaterally sends its military to the islands and tries to invade them, Washington will be pressured to counteract more resolutely.

Second, the U.S. would vary options with the change of the war situation. For example, Washington may want to refrain from overt U.S. military intervention and leave the fighting to Japan, if the conflict is limited in space and time, and the situation is favorable to Japan. On the contrary, if cornered China tries to launch missiles to Japan’s homeland, Washington may need to act more forcibly to deter further Chinese aggression. If it does not act, the United States will be seen as intimidated by China to abandon one of its most important allies.

Third, the United States will have to analyze the repercussion of its behavior not only on China but also on Japan. If Tokyo is too confident of the U.S. military intervention, or if Beijing does not worry about the U.S. intervention at all, either one of them may run the risk of escalating the situation especially when put in inferior position in the battle. Washington is likely to maintain ambiguity even if it decides to assist Japan or keep neutrality.

Fourth, the United States will, as it did in the Falkland War, very strongly urge both Japan and China to stop fighting. It will almost certainly do so, whichever side Washington decides to support. In 1982, the U.S. government tried to balance between the two capitals during the whole process of the war. Initially, the U.S. government tried to mediate a ceasefire and a solution of territorial problem. Washington tried to save loser’s face even after the United States decided to officially support the United Kingdom and Argentine defeat was made clear to everyone’s eyes.

And finally, it is highly unlikely that the United States takes the hard options described near the bottom of the list. Although there is a certain risk of China and/or Japan making that stupid action, being driven by the force of nationalism, making war and risking soldiers’ lives over the tiny and resource-poor islands is simply ridiculous for every sober party.

There is no doubt that the Japan-U.S. alliance is valuable in checking Chinese provocation over the Senkaku Islands. But the effect of its deterring China is no more satisfactory. Japan and the United States should send more resolute signal to China now, otherwise we will have to pay the heavier cost in the future. For example, the United States should consider admitting the territorial right of Japan over the Senkaku Islands. This may sound like a deviation from the U.S. general policy on the territorial issues of other countries. But the United States has long admitted Japan’s territorial right on the four islands of Northern Territory against Russia. By admitting Japan’s territorial right, the United States may able to discourage China from challenging the status quo. (For its part, Japan should send more aggressive signal to China as I proposed in the previous post.)

While deterring Beijing’s use of force, buying time until China weakens as a result of declining and aging population will be one of the strategic options for Japan and the United States. Whether weak China means modest China, however, is a heavy bet.