East Asian Domestic Politics

JAPAN

***Japan Politics Disadvantage

Japan Politics – Tax Reform Bad – 1NC	3

Japan Politics – Tax Reform Bad – 1NC	4

Japan Politics – Tax Reform Bad – 1NC	5

Uniqueness – Kan Pushing Tax Reform	6

Uniqueness – Tax Reform Won’t Pass	7

Uniqueness – Tax Reform Won’t Pass	8

Uniqueness – Tax Reform Won’t Pass	9

Uniqueness – Japan Economy Strong	10

Uniqueness – Japan Economy Strong – Brink	11

Uniqueness – Japan Economy Strong – AT: Economic Collapse Now	12

Uniqueness – No Troop Withdrawal	13

Uniqueness – No Troop Withdrawal	14

Link – Okinawa – Withdrawal Popular	15

Link – Okinawa – Withdrawal Popular	16

Link – Okinawa – Withdrawal Popular	17

Link – Okinawa – Withdrawal Popular – AT: Unilateral US Withdrawal Doesn’t Link	18

Link – Okinawa – New Komeito Party	19

Link – Okinawa – Your Party	20

Internal – Winners Win/Okinawa Key	21

Internal – Okinawa Key	22

Internal – New Komeito/Your Party Key	23

Internal – New Komeito Key	24

Impact – Tax Reform Bad – Japan Economy	25

Impact – Tax Reform Bad – Japan Economy	26

Impact – Tax Reform Bad – AT: Tax Reform Key to the Economy	27

Impact – Japan Economy Good – Global Economy	28

Impact – Japan Economy Good – Asian Instability	29

Aff – Not Unique – Tax Reform Will Pass	30

Aff – No Link – Okinawa Not Key	31

Aff – Link Turn – Japan Opposes Withdrawal	32

***Japan Politics Advantage

Japan Politics Aff Adv – Tax Reform Good – 1AC	33

Japan Politics Aff Adv – Tax Reform Good – 1AC	34

Japan Politics Aff Adv – Tax Reform Good – 1AC	35

Japan Politics Aff Adv – Tax Reform Good – Economy	36

Japan Politics Aff Adv – Tax Reform Good – Economy	37

Japan Politics Aff Adv – Tax Refrom Good – Economy	38

Japan Politics Aff Adv – Tax Reform Good – Economy	39

Japan Politics Aff Adv – Okinawa Withdrawal Key to Japanese Diplomacy	40

SOUTH KOREA

***South Korea Politics Disadvantage

South Korea Politics – Economic Reform – 1NC	41

South Korea Politics – Economic Reform – 1NC	42

South Korea Politics – Economic Reform – 1NC	43

South Korea Politics – KORUS FTA – 1NC	44

South Korea Politics – KORUS FTA – 1NC	45

South Korea Politics – KORUS FTA – 1NC	46

Uniqueness – Economic Reform – Lee’s Pushing	47

Uniqueness – Economic Reform – Will Pass	48

Uniqueness – KORUS FTA – Will Pass	49

Uniqueness – KORUS FTA – Will Pass – South Korea	50

Uniqueness – KORUS FTA – Will Pass – AT: Beef Dispute	51

Uniqueness – Lee Strong – AT: Cheonan Sinking Controversy	52

Uniqueness – No Troop Withdrawal	53

Link – Withdrawal Unpopular	54

Link – Withdrawal Unpopular	55

Link – Withdrawal Unpopular – AT: South Korea Opposes US Military Presence	56

Link – Withdrawal Unpopular – AT: South Korea Opposes US Military Presence	57

Link – Withdrawal Unpopular – AT: South Korea Opposes US Military Presence	58

Link – Plan Hurts Lee	59

Link – Plan = Loss for Lee	60

Link – Plan = Loss for Lee	61

Internal – Agenda – Public Support Key	62

Internal – Agenda – Alliance Key	63

Internal – Economic Reform – Capital Key	64

Impact – Economic Reform Good – Economy	65

Impact – Economic Reform Good – Causes Lee’s Agenda	66

Impact – KORUS FTA Good – South Korea Economy	67

Impact – KORUS FTA Good – US Trade Leadership	68

Impact – KORUS FTA Good – US Influence in East Asia	69

Aff – Not Unique – Economic Reform Won’t Pass	70

Aff – Not Unique – KORUS FTA Won’t Pass	71

Aff – Not Unique – Lee’s Weak	72

Aff – Link Turn – Withdrawal Popular	73

Aff – Impact Inevitable – Economic Reform Doesn’t Solve	74

***South Korea Economy Disadvantage

South Korea Economy 1NC	75

South Korea Economy 1NC	76

Uniqueness – South Korean Economy Strong	77

Uniqueness – South Korean Economy Strong	78

Link – Foreign Investment	79

Link – Defense Spending	80

Link – Defense Spending – Perception	81

Link – Defense Spending – Empirics	82

Link – AT: Defense Spending Helps the Economy	83

Impact – South Korea Economy Good – East Asian Arms Race	84

Impact – South Korea Economy Good – Key to the G20	85

Impact – South Korea Economy Good – Key to the G20	86

Impact – G20 Good – Doha – Protectionism	87

Impact – G20 Good – Doha – Japan Economy	88

Impact – G20 Good – Green Growth Strategy	89

Impact – G20 Good – Green Growth Strategy	90

Impact – AT: South Korean Economy Resilient	91

Aff – No Impact – South Korean Economy Resilient	92

Japan Politics – Tax Reform Bad – 1NC

Gridlock blocks Kan’s tax agenda now but political victories could clear the way for passage.

Bunn Nagara, Malaysia Star, 7/14/2010, " Tokyo's pendulum swings against the incumbent again ", http://thestar.com.my/columnists/story.asp?file=/2010/7/15/columnists/midweek/6670424&sec=midweek, AT

Fresh from the finance ministry, Kan thought he could mould public opinion with an authoritative scare tactic: he warned that not raising the sales tax could turn Japan into another Greece. But the tactic flopped horribly. Financial analysts knew that Japan was no Greece because the two countries' economic systems were different enough. But Kan failed both to rationalise the proposed tax hike acceptably and to deliver the electorate from more fear and uncertainty. Bad as his unnecessary scare was, the way he backtracked in the face of public disquiet was appreciably worse. If his 'bark' had been inopportune, the 'bite' he got from the electorate saw it backfiring completely. Kan's sad irony is that while he wanted to appear frank and candid to the people, he produced distrust instead. That added to the momentum of the DPJ's downswing on account of Hatoyama's premiership. The LDP lost no time in trying to make political capital out of the DPJ's setbacks. Calls continue for fresh elections for the lower house, although Kan has said he would not step down. On paper, Kan's premiership may be down but it may not be counted out. The DPJ still has a majority in the more powerful lower house. And another general election need not be called for up to three more years. However, the DPJ is neither out of the woods nor is it likely ever to emerge from it anytime soon. A divided Diet means the DPJ in government will have an even tougher time pushing any coherent policy through.

Kan has pledged to resolve the Okinawa dispute – he needs to remove the US presence to quell opposition.

AFP, 6/23/2010, http://www.google.com/hostednews/afp/article/ALeqM5jURY1ux8w5NSwV5H7Yy-jZzIL6ww

Japan's Prime Minister Naoto Kan pledged Wednesday to reduce "the burden" of US bases on Okinawa as the island marked 65 years since the end of a major World War II battle there. Kan was on his first visit to the southern island since he took office on June 8 to attend a ceremony to remember the 83-day bloodbath which killed more than 200,000 people, half of them civilians, in 1945. His predecessor Yukio Hatoyama stepped down this month largely because he had mishandled a dispute over the relocation of an unpopular US airbase on the island, triggering local protests and souring ties with Washington. Kan noted that the US presence on Okinawa had contributed to peace in the Asia-Pacific region but added: "I promise to continue to seriously tackle the reduction of the burden in connection with US military bases." Kan said the island still hosts more than half of the 47,000 US troops in Japan. The bases have long drawn the ire of Okinawans because of aircraft noise, pollution, the risk of accidents and crime. "On behalf of all of our people, I apologise for the burden," Kan said. Futenma and other US bases were established as American forces took the island in one of the bloodiest battles of World War II. Towards the end, Japanese troops forced many residents to kill themselves "honourably" rather than face capture, according to local accounts. "I sincerely express my heartfelt sorrow for the dead," Kan told an audience of more than 5,000 Okinawans who held a minute-long prayer. After the war, Okinawa stayed under US occupation until 1972 and has since then remained the strategic US military keystone in the Pacific. The world's two largest economies have been key security partners, and Wednesday also marked the 50th anniversary of the Japanese ratification of a US-Japan security treaty which both sides had signed on January 19, 1960. Anti-base protests have flared in recent months after Hatoyama first pledged to move the contentious Futenma airbase off Okinawa, than reneged on the promise following protests from the United States.

Japan Politics – Tax Reform Bad – 1NC

Wins in other areas spillover and allow Kan to get his tax reform policies.

Justin McCurry, GlobalPost correspondent for Japan, 7/17/2010, GlobalPost, http://www.globalpost.com/dispatch/japan/100715/global-economy-japan?page=0,1

"It is possible to say that support for a sales tax increase may rise if persuasive arguments are presented to voters, including cutting government waste,” the Asahi Shimbun newspaper said. The public’s gripe with Kan is rooted in his confused approach to the scale and purpose of his proposed tax changes, a criticism he accepted in the immediate aftermath of defeat. “I am sorry that my remarks were misunderstood," he said. "The election result shows that the country needs to have a proper debate before any decision is taken on tax." Martin Schulz, senior economist at the Fujitsu Research Institute in Tokyo, believes Kan could win the tax debate as long as he proves his credentials in other policy areas, such as social security spending and wresting power from the elite bureaucrats who have run Japan’s postwar economic policy. “There is a general acceptance that the sales tax has to be raised eventually. But people are only willing to trust a government with a proven track record of acting responsibly, and the DPJ haven’t done that yet,” Schulz said, referring to the Democratic Party by its acronym.

Tax reform causes a Japanese economic depression.

Chikafumi Hodo, Chief Correspondent for Reuters, 6/28/2010, Reuters, http://www.reuters.com/article/idUSTRE65R1XF20100628

Japan's benchmark 10-year bond yield could sink below 1 percent if the country doubled its sales tax to around 10 percent, the head of Western Asset Management's Japan unit said on Monday. New Prime Minister Naoto Kan has pitched such a hike as a necessary step to rein in Japan's massive public debt but this could significantly depress the economy, Naoya Orime told the Reuters Japan Investment Summit. "The level of the 10-year JGB yield could quickly fall to around 0.75-0.8 percent if the sales tax was raised to 10 percent," Orime said. While a sales tax hike could push up the consumer price index in the short run, the move could intensify deflation concerns and trigger heavy JGB purchases, he added. The 10-year yield declined to a seven-year low of 1.125 percent last week on the view that Kan is more serious about fiscal reform than many of his predecessors. It was 1.150 percent on Monday.

Japan’s economy is key to the global economy.

Kimberley Amadeo, President of World Money Watch, 12/29/2009, “Japan's Recession - What Caused Recession in Japan, and How It Affects the U.S.” http://useconomy.about.com/od/grossdomesticproduct/a/Japan_Recession.htm)

Japan is the world's fourth largest economy (after the EU, U.S. and China), so its decline would drag down the global economy, as well. Japan also hires temporary workers from nearby South Asian countries, who are now being laid off in droves. To combat recession in the 1990's, the Bank of Japan had lowered interest rates to 0% and bought U.S. Treasuries, keeping the yen low which made exports competitively priced. The low yen caused investors to borrow money in yen at a low interest rate and invest it in higher-paying currencies, such as the dollar. This was known as the yen carry trade, and created much liquidity in the global marketplace. Last year, the yen carry trade collapsed, and the yen skyrocketed. The stronger yen made Japanese exports less competitive at a time when demand had fallen in the U.S. The Bank of Japan has traditionally been the largest holder of U.S. Treasuries. It did this to keep the yen low relative to the dollar, which kept Japan's exports competitive. This strategy caused Japan's debt to be 182% of total GDP output, weakening its economy. (Source: CIA World Factbook) A low yen made Japan's auto industry very competitive. This was one reason that Toyota became the number #1 auto maker in the world in 2007. A recession in Japan could cause it to purchase less Treasury bonds at a time when the U.S. is issuing more bonds to finance the economic stimulus bill and bailouts. Lower demand and greater supply of Treasury bonds will cause yields to rise, thus raising interest rates, further depressing the housing market.

Japan Politics – Tax Reform Bad – 1NC

Economic collapse causes World War III.

Walter Russell Mead, Henry A. Kissinger Senior Fellow in U.S. Foreign Policy at the Council on Foreign Relations, 1/22/2009, The New Republic, http://www.freerepublic.com/focus/news/2169866/posts

None of which means that we can just sit back and enjoy the recession. History may suggest that financial crises actually help capitalist great powers maintain their leads--but it has other, less reassuring messages as well. If financial crises have been a normal part of life during the 300-year rise of the liberal capitalist system under the Anglophone powers, so has war. The wars of the League of Augsburg and the Spanish Succession; the Seven Years War; the American Revolution; the Napoleonic Wars; the two World Wars; the cold war: The list of wars is almost as long as the list of financial crises. Bad economic times can breed wars. Europe was a pretty peaceful place in 1928, but the Depression poisoned German public opinion and helped bring Adolf Hitler to power. If the current crisis turns into a depression, what rough beasts might start slouching toward Moscow, Karachi, Beijing, or New Delhi to be born? The United States may not, yet, decline, but, if we can't get the world economy back on track, we may still have to fight.

Uniqueness – Kan Pushing Tax Reform

Kan’s still pushing tax reform despite election losses.

Rick Wallace, Staff Writer, 7-13-2010, The Australian, “Kan to retain tax plans despite poll dive” WORLD; Pg. 12, Lexis

PRIME Minister Naoto Kan has vowed to forge ahead with his plans, despite being punished by voters for suggesting he might double Japan's consumption tax. Mr Kan -- who put rebuilding Japan's public sector finances at the centre of his campaign for Sunday's upper house poll -- suffered a setback when his party secured just 44 seats, losing 10 seats when it had hoped to gain six. The Democratic Party of Japan under Mr Kan, who assumed the leadership last month, had been on track to win the 60 seats needed for an outright majority before the voter backlash. Mr Kan said at an early press conference yesterday that he had failed to explain his position on the tax, but vowed to push on with his plans. ``My comments on the consumption tax may have been a little too abrupt in the way they were conveyed to the public,'' he said. ``I myself felt the explanations were inadequate.'' Nevertheless, he had raised awareness that a review was necessary, he said.

Tax reform is Kan’s top priority.

Reuters, 6-21-10 (“Tax hikes spur growth, end deflation says Japan PM advisor” http://www.cnbc.com/id/37816614)

Kan, 63, who has made fiscal reform a top priority since taking office this month, has cited a possible doubling of the sales tax to 10 percent to curb Japan's debt, which is twice the size of its GDP, the worst in the developed world. Ono became acquainted with Kan a decade ago and has advised him on economic policy in earnest since taking up the job at the Cabinet Office in February. Ono, 59, said the income and inheritance tax rates also need to be raised so the rich shoulder more of the tax burden.

Uniqueness – Tax Reform Won’t Pass

Tax reform won’t pass because of the DPJ’s electoral defeat.

The Yomiuri Shimbun, 7/14/2010, Daily Yomiuri Online, http://www.yomiuri.co.jp/dy/editorial/20100715TDY02T05.htm

The Democratic Party of Japan's crushing defeat in Sunday's House of Councillors election has raised concern that discussions on far-reaching tax reform, including a possible consumption tax hike, will be put on the back burner. DPJ Secretary General Yukio Edano has indicated his intention not to stick to Prime Minister Naoto Kan's plan of formulating concrete plans on tax reform by the end of fiscal 2010. "We won't necessarily adhere to the initial deadline," Edano said.

Gridlock blocks Kan’s tax agenda.

Jay Alabaster, AP (Associated Press), 7/11/2010, "Japan braces for gridlock after ruling party loss", http://www.google.com/hostednews/ap/article/ALeqM5hlQO-kyvIEyrc0I90V5l0LFN7JTwD9GTBBBO0, AT]

Japan's ruling party faced the prospect of political gridlock Monday as bad losses in weekend parliamentary elections undermine its attempts to reduce the second-largest economy's ballooning deficit and revive growth. Half of the 242 seats in the upper house of parliament were up for grabs in Sunday's nationwide balloting. Major newspapers showed Monday that the Democratic Party of Japan had won only 44 seats — far below its stated goal of 54 — while the opposition made major gains and took control of the upper house. Official government results were not expected until later Monday. The Democrats retain power because they still control the more powerful lower house of parliament. But the results are a dramatic contrast to their landslide victory just a year ago, when they seized control of parliament and ended the rival conservative party's nearly 50-year rule. Prime Minister Naoto Kan has said Japan's finances could face a Greek-like meltdown if it doesn't cut back on soaring debt, and immediately after taking power a month ago suggested raising the consumption tax as a solution. But voters, already suffering from the economic downturn, staunchly rejected that idea in voting Sunday. While many agree a tax raise may be necessary in the long run, analysts and voters say the proposal hurt the Democrats.

Uniqueness – Tax Reform Won’t Pass

Opposition parties block Kan’s tax agenda.

Yoko Nishikawa, 7/10/2010, “Q+A-Japan's politically touchy debate on sales tax hike”, Reuters, http://www.reuters.com/article/idUSTOE66607O20100711

Kan's willingness to broach the sensitive topic reflects the seriousness of Japan's bulging public debt and the challenge of funding welfare and pension costs for a rapidly ageing society. Japan's outstanding public debt is near 200 percent of GDP, the highest among advanced economies, keeping bond investors and voters wary as the government tries to balance the need for stimulating the economy with a need for fiscal prudence. "Debating the sales tax has long been seen as a political taboo. But for the Japanese people and for us politicians to achieve a strong economy and strong fiscal condition, we dared to mention this," Kan told a news conference in mid-June, where he stunned listeners by citing a possible rise to 10 percent. Economists have long said a hike is inevitable to help restore Japan's tattered finances and fund growing pension, medical and social welfare costs for a greying society. The government could raise some 2.5 trillion yen ($28 billion) annually by raising the tax by 1 percentage point. That compares with an expected sales tax revenue of 12.1 trillion yen this fiscal year to March 2011. HOW LIKELY IS THE CONSUMPTION TAX HIKE AND WHEN? Kan, Japan's fifth premier in three years, has said it would take at least two to three years to implement a sales tax hike, adding that the government would start a full-fledged debate on the tax after the upper house election. [ID:nTOE65K03X] Kan, a former grassroots activist who is trying to capitalise on his common-man image, wants to consider lowering tax rates for daily necessities such as food as well as tax credits for people with low incomes if the sales tax is raised. Kan has called for a multi-party debate on the issue and said the government should first seek a mandate in a general election, which must be held by late 2013, to implement any sales tax hike. But other parties are either refusing or saying they would participate only on certain conditions. Some in Kan's own party and a tiny coalition partner are also against the tax hike. Opposition parties have criticised Kan for flipflopping on the contentious topic and for lacking his own ideas after he brought up the notion of doubling the sales tax by using an opposition proposal, which he called "one major reference point". The main opposition Liberal Democratic Party, which is calling for a sales tax rise to 10 percent in its election platform, is criticising Kan for using its calculation without saying how the Democrats would mesh a hike with their previous promises on spending programmes such as child allowances. Kan's Democratic Party plans to map out its proposals for tax reform, including the size of a sales tax hike, by the end of the fiscal year to March 2011. HOW DID IT PLAY OUT IN THE PAST? Japan last raised the tax, to 5 percent from 3 percent, in 1997, a move that was followed by a big election defeat for the then ruling party as voters blamed the higher consumption tax for derailing a nascent economic recovery.But people may now be more willing to tolerate a rise because of worries about creaky pension and health care systems and the spectre of a Greek debt crisis. But many are unhappy with how Kan floated the idea without sufficient explanation. A poll by the Yomiuri newspaper in late June showed that 64 percent of voters thought a sales tax hike was necessary for fixing state finances and maintaining the nation's social welfare system, against 33 percent who did not. But other polls have shown a majority of voters against a sales tax hike. Kan's gamble may be less risky than precedent suggests. Still, voter support for his government, which had jumped right after he replaced Hatoyama, has fallen as the premier's call to debate a future sales tax hike put off some voters

Uniqueness – Tax Reform Won’t Pass

The PNP’s blocking Kan’s fiscal agenda.

Osamu Kawakami, staff writer for Japanese newspaper The Daily Yomiuri, 6/9/2010; http://www.yomiuri.co.jp/dy/business/T100608003565.htm

Kan's appointments are apparently aimed at energizing debate on rectifying the nation's dire fiscal situation through measures including an increase in the consumption tax rate.Yoshito Sengoku became the new chief cabinet secretary Tuesday, Yoshihiko Noda assumed the post of finance minister, and Koichiro Gemba was named chairman of the Democratic Party of Japan's Policy Research Committee. However, Kan's fiscal reconstruction course could ruffle the feathers of the PNP--which champions increased public spending to boost the economy--and cause friction within the government. Before the DPJ's presidential election Friday, Kan indicated he is keen to put debate on raising the consumption tax rate back on the table. "I'll correct the current direction in which [government] borrowing appears as if it will continue to increase indefinitely," he said. Sengoku, Noda and Gemba apparently share this sentiment.In April, Sengoku, who was state minister in charge of national policy under former Prime Minister Yukio Hatoyama, decried the initial fiscal 2010 budget in which the issuance of government bonds exceeded government tax revenue for the first time since the end of World War II. "This budget will cause concern [among the public] over whether this country can continue to exist," he said. Noda, as senior vice finance minister, also has called on the government to rebuild public finances. Some DPJ members have whispered behind Noda's back, saying Finance Ministry bureaucrats have him in their pockets. Meanwhile, Gemba assembled more than 100 DPJ members and launched on May 26 a group that discusses state finance. Gemba is a representative of the group. "It's important to design a system [for raising the consumption tax rate] before the next general election," Gemba said at a press conference Monday.In April, Gemba said the consumption tax rate "must be raised within four years," and suggested that the rate "could be 10 percent in 2015."Because the Policy Research Committee chairman coordinates policies proposed by the party, some midcareer DPJ members are wary about Gemba's intentions. "He might even spell out the timing and size of the consumption tax hike in the DPJ's manifesto for the upcoming House of Councillors election," one member complained. The government hopes to spell out further steps toward fiscal reconstruction in a midterm fiscal framework that will be compiled this month and in its fiscal management strategy for the next 10 years. The framework will incorporate the government's projection of revenue and expenditure for the next three years.However, the PNP could derail this plan. PNP leader Shizuka Kamei, who also is state minister in charge of financial policy and postal reform, has attempted to forestall debate on fiscal reconstruction. "I believe the government will implement economic stimulus measures and compile the [fiscal 2011] budget properly," Kamei said in Nagoya on Saturday. The PNP has called for robust fiscal stimulus measures and plans to include "economic stimulus measures totalling 100 trillion yen over three years" in its campaign pledges for the upper house election. This could put Kamei on a collision course with Kan's fiscal reconstruction plans.

Uniqueness – Japan Economy Strong

Japan’s economy is headed for sustainable growth.

RTT News (United States), 7/21/2010, http://www.rttnews.com/ArticleView.aspx?Id=1364934

(RTTNews) - The Japanese government said on Wednesday that the economy is picking up steadily, although it faces a difficult situation such as high unemployment rate. In its monthly economic report, the Cabinet Office said despite the severe labor market situation, the economy is expected to be headed for a self-sustaining recovery as corporate profits continue to improve. This assessment reflects the improvement in overseas economies and the effects of policy measures including the emergency economic measures.

Japan’s recovery is continuing now.

WSJ (Wall Street Journal), 7/5/2010, "Japan Economy Minister: Economic Recovery Trend Unchanged", http://online.wsj.com/article/BT-CO-20100705-706129.html, AT

TOKYO (Dow Jones)--Japan's economy minister said Tuesday that in spite of the weak Japanese share market and the rising yen, the economy is continuing to recover. "The Japanese economy's recovery trend hasn't changed," Satoshi Arai, Japan's Minister of State for Economic and Fiscal Policy, told a regular news conference. He also said he's watching moves in the domestic share market.

Japan’s economy is improving and headed for a self-sustaining recovery.

Tomoyuki Tachikawa, Megumi Fujikawa, WSJ (Wall Street Journal), 6/30/2010, " Manufacturers in Japan Turn Positive ", http://online.wsj.com/article/SB10001424052748703426004575339561038102240.html, AT

TOKYO -- Sentiment among big manufacturers in Japan unexpectedly turned positive for the first time in two years, the Bank of Japan's June tankan survey showed Thursday, signaling that a solid expansion in exports has helped light a fire under sluggish domestic demand. The headline diffusion index in the central bank's quarterly survey of corporate sentiment showed that conditions among large manufacturers rose to 1 in June from minus 14 in the March survey. The reading was much better than the median forecast of economists surveyed by Dow Jones Newswires for minus 4. The figure represents the percentage of companies saying business conditions are good minus those saying conditions are bad. The reason behind the improvement in corporate confidence is that healthy demand for Japanese goods in emerging economies, including China, continues to benefit Japanese firms and is prompting them to increase capital spending. A recovery in corporate earnings, as well as government stimulus measures, has also helped income and employment conditions pick up, underpinning consumer spending at home. Japan's economy looks likely to advance along a self-sustaining recovery path, analysts say. "The tankan confirms that the economy keeps steadily recovering," said Tatsushi Shikano, senior economist at Mitsubishi UFJ Morgan Stanley Securities. "We expect the country's business sentiment to continue improving on the back of robust domestic and external demand."

Uniqueness – Japan Economy Strong – Brink

Japan’s economy is growing but that could change.

WSJ (Wall Street Journal), 7/22/2010, "Japan Econ Minister Arai: Don't Think Japan Economy Is In Lull", http://online.wsj.com/article/BT-CO-20100721-701925.html, AT

TOKYO (Dow Jones)--Japan's economy minister Satoshi Arai said Wednesday the nation's economy hasn't entered a "lull," or a period of little growth, suggesting top officials aren't too worried about recent weak economic data. Arai made the comments after the release of the government's July economic report, which expressed greater concern about the repercussions of a possible U.S. economic slowdown, but which stuck to a cautiously upbeat tone on the current shape of Japan's economy.

Japanese growth is ongoing but fragile.

IMarketnews.com, 7/20/2010, "Japan Repeats Econ Picking Up But Cautious On Outlook", http://imarketnews.com/node/16763, AT

TOKYO (MNI) - The Japanese government on Wednesday repeated its overall assessment of the economy, saying it has been "picking up steadily," but remained cautious about how soon the economy could return to a self-sustained growth track. The government is watching for downside risks arising from slower demand for Japanese exports from Europe and the U.S. while it is also monitoring upside risks from a series of stimulus measures. "Although the economy has been picking up steadily and the foundation for a self-sustaining recovery is being laid, conditions remain difficult, with a high unemployment rate," it said in its monthly report for July. Last month the Cabinet Office revised up its assessment for the first time in three months but it still did not say the economy is "recovering." This is in contrast to the Bank of Japan, which has been saying since May that the economy has reached a "recovery" stage. "We are almost there but we cannot yet say we have a self-sustained recovery," Keisuke Tsumura, parliamentary secretary of the Cabinet Office for economic and fiscal policy, told reporters. "The economy could mark time on a plateau, so we need to see how things develop for a little longer," he said. "At the same time, we must watch for upside risks now that we have begun providing child allowances (to families with children up to ninth grade) and made some highways toll-free." The government has also started paying subsidies to make high school education basically free, effective in April, and has extended tax breaks for buying low-emission vehicles and its reward program for purchases of greener consumer electronics. The Cabinet Office regards consumer spending as "picking up" on average, although there has been a pullback in durable goods spending after a surge through March. Business confidence is "improving" but firms, particularly smaller ones, are cautious about the outlook, it said.

Uniqueness – Japan Economy Strong – AT: Economic Collapse Now

Japan’s economy won’t collapse now.

Yasuhiko Seki, Bloomberg, 7/22/2010, " Japan's Bonds Decline as Recovery Signs, Stock Gains Sap Demand for Safety ", http://www.bloomberg.com/news/2010-07-22/japan-s-bonds-may-fall-on-speculation-reports-to-signal-sustainable-growth.html, AT

Japan’s bonds fell, snapping a two- day gain, as signs of a sustainable recovery in the world’s second-largest economy cut demand for the safety of debt. Benchmark yields climbed from a seven-year low before reports next week forecast to show growth in Japan’s exports and industrial production. Bonds dropped as Asian stocks extended a global rally on optimism corporate earnings are recovering. “The economy is not going to collapse, contrary to extreme concerns that had engulfed the market recently,” said Hirokata Kusaba, a senior economist in Tokyo at Mizuho Research Institute Ltd., a unit of Japan’s second-largest banking group. “Bond yields, which have fallen to current levels on such concerns, are not sustainable.” The yield of the benchmark 10-year bond rose one basis point to 1.065 percent at 4:33 p.m. in Tokyo at Japan Bond Trading Co., the nation’s largest interdealer debt broker. The price of the 1.1 percent bond due June 2020 fell 0.090 yen to 100.313. Yields reached 1.045 percent yesterday, the lowest since August 2003. A basis point is 0.01 percentage point. Ten-year bond futures for September delivery declined 0.18 to 141.69 yen at the Tokyo Stock Exchange.

Uniqueness – No Troop Withdrawal

The US won’t withdraw or relocate troops in Japan now.

Yoko Kubota, Andrew Marshall, Reuters India, 7/23/2010, " US won't move Marines from Japan by 2014 - media ", http://in.reuters.com/article/idINIndia-50356620100723, AT

Washington has given up on moving 8,000 U.S. Marines to the U.S. territory of Guam from Japan by 2014, media said on Friday, a potential blow to Prime Minister Naoto Kan who is already struggling over a U.S. base dispute. The planned transfer of Marines from the southern island of Okinawa is a part of a larger agreement between Washington and Tokyo that includes relocating functions of the U.S. Futenma airbase in Okinawa to a less crowded area on the island. Washington's likely delay in transfering the Marines could push back the relocation of Futenma as well, Yomiuri newspaper reported. It said the likely delay was disclosed in a briefing given by the U.S. Navy to Guam's government. Any postponement over moving the controversial base on Okinawa, host to about half the U.S. troops in the country, could be a blow to Kan's government, already reeling from a poor showing in an upper house election this month.

The US will keep US troops in Okinawa now.

UPI.com, United Press International, 7/3/2010, " US reconfiguring Okinawa move ", http://www.upi.com/Top_News/US/2010/07/03/US-reconfiguring-Okinawa-move/UPI-68051278181969/, AT]

WASHINGTON, July 3 (UPI) -- The U.S. Defense Department is taking a second look at plans to move forces from the Japanese island of Okinawa to Guam, government sources say. Yomiuri Shimbun, citing sources close to both the Japanese and U.S. governments, reported the new proposal would not involve a change in the number of U.S. troops to be relocated. But some of the 8,000 members of the Third Marine Expeditionary Force now on Okinawa would remain there, while combat troops would be relocated instead. The reason for the change is rising tension between North and South Korea and concerns about China's role in the region, the newspaper said. The Japan-U.S. Roadmap for Realighment Implementation, signed in 2006, aims to reduce the size of the U.S. footprint on Okinawa, which has a heavy concentration of U.S. military bases. Removing the entire MEF would have left Okinawa with no officers of admiral's rank. Relocating U.S. operations from Okinawa has become a major issue in Japan with plans to move some forces elsewhere in the country meeting stiff resistance.

Uniqueness – No Troop Withdrawal

Troop Presence will remain in Okinawa.

Hosaka, Staff Writer, 5-27-10, The Boston Globe

(Tomoko, “US, Japan to keep US military base in Okinawa” http://www.boston.com/news/world/asia/articles/2010/05/27/us_japan_to_keep_us_military_base_in_okinawa/)

TOKYO—Washington and Tokyo agreed Friday to keep a contentious U.S. Marine base in the southern island of Okinawa, reaffirming the importance of their security alliance and the need to maintain American troops in Japan. In a joint statement, the two allies agreed to move the Marine Corps Air Station Futenma to Henoko, in a less crowded, northern part of the island. The decision is broadly in line with a 2006 deal forged with the previous, conservative Tokyo government, but represents a broken campaign promise on the part of Japanese Prime Minister Yukio Hatoyama. Hatoyama came to office last September promising to create a "more equal" relationship with Washington and move the Marine base off the island, which hosts more than half the 47,000 U.S. troops stationed in Japan under a 50-year-old joint security pact. But after months of searching and fruitless discussions with Washington and Okinawan officials, the prime minister acknowledged earlier this month that the base needed to stay in Okinawa. His decision, which he had pledged to deliver by the end of May, has angered tens of thousand of island residents who complain about base-related noise, pollution and crime, and want Futenma moved off the island entirely. U.S. military officials and security experts argued it is essential that Futenma remain on Okinawa because its helicopters and air assets support Marine infantry units based on the island. Moving the facility off the island could slow the Marines' coordination and response in times of emergency. Under a 1960 security pact, American armed forces are allowed broad use of Japanese land and facilities. In return, the U.S. is obliged to respond to attacks on Japan and protect the country under its nuclear umbrella. The U.S. and Japan "recognized that a robust forward presence of U.S. military forces in japan, including in Okinawa, provides the deterrence and capabilities necessary for the defense of Japan and for the maintenance of regional stability," said the statement, which was issued by Secretary of State Hillary Clinton, Secretary of Defense Robert Gates, Japanese Foreign Minister Katsuya Okada and Defense Minister Toshimi Kitazawa. Reaffirming the 2006 deal comes as a relief for Washington. In a phone conversation with President Barack Obama Friday morning Japan time, Hatoyama said Obama "expressed appreciation that the two countries could reach an agreement."

Link – Okinawa – Withdrawal Popular

Opposition to Okinawa blocks Kan’s agenda – the aff is overwhelmingly popular.

Press TV, 7/22/2010, " Moving of US base in Japan in limbo ", http://www.presstv.ir/detail.aspx?id=135785&sectionid=351020406, AT

The two countries have entered talks to postpone a decision on the location and construction of another site for the US Futenma airbase on Okinawa, Japanese media said on July 21. US and Japan had agreed on the repositioning of the base to a less crowded part of the island of Okinawa in May, despite popular calls for the removal of US troops from the island. According to Reuters, Japan's Defense Ministry has said that the base relocation talks need to take into account an Okinawa gubernatorial election in November, indicating a final decision could be made later than planned. The unpopular base relocation plan threatens the government of Japan's Premier Naoto Kan after it led to the resignation of the country's previous Prime Minister Yukio Hatoyama. The new premier took office in June after Hatoyama was forced to resign over his failure to keep his election promise of moving the controversial US base off Okinawa. The Futenma base has provoked a wave of anger in Japan, with the nation demanding a complete removal of the airbase from Okinawa. Despite widespread criticism, the new premier has confirmed that he will honor the latest Japan-US agreement for the relocation of the airbase on Okinawa.

Plan popular- Residents are not happy with the current agreement.

The Voice of Russia, Jun 8, 2010, “US base remains on Okinawa”, http://english.ruvr.ru/2010/06/08/9395946.html

New Japanese Prime Minister, Naoto Kan, during a telephone conversation has assured U.S. President Barack Obama that an agreement on American bases in Japan, reached by Tokyo and Washington in late May, will be implemented. The discussion was initiated by the U.S. side. Most likely, Barack Obama decided not only to congratulate Naoto Kan on his appointment as the Prime Minister, but also to explore his plans concerning one of the key issues in U.S.-Japanese relations. It seems that Washington is seriously worried over the fate of the American base on Okinawa. In fact, the displacement of the air force base in Futenma triggered a political crisis in Japan last month. Consequently, Yukio Hatoyama had to step down as the Prime Minister. The reason for the declining trust in the government that led to the resignation of the Cabinet is that the Japanese public’s opinion is inclined towards the reduction of the U.S. presence in the country, says a Russian expert in oriental studies, Andrei Volodin. “Judging by everything, the majority of the Japanese support reviewing the agreement on the status of American servicemen in Japan, which is currently in force,” says Andrei Volodin. “Earlier, Yukio Hatoyama assured everyone that priority would be given to the wishes of the residents of the island, who have long experienced discomfort with the American base, when deciding its fate,” Andrei Volodin. The area occupied by the American base on Okinawa is 75 percent of all territory under the American military in Japan. Thousands of local residents staged a series of protest rallies in April and May. They urged the Japanese government to relive a burden placed on them by American military facilities on the island. One of their demands was the removal of the air force base in Futenma even if it is necessary from the standpoint of security and deterrence potential.

Link – Okinawa – Withdrawal Popular

There’s massive opposition to the US presence in Okinawa.

Daisuke Wakabayashi & Yuka Hayashi, Wall Street Journal, 7/12/2010, http://online.wsj.com/article/SB10001424052748703580104575360660021162180.html

The first test comes at the end of August: The previous prime minister, Yukio Hatoyama, had promised Washington an agreement with the U.S. on details of the controversial base location plan, including configuration and construction methods, by then. Mr. Kan has pledged to follow Mr. Hatoyama's commitments on Okinawa. In the months following that deadline, local elections in Okinawa could further lock local politicians into opposing Tokyo's attempts to move the American base to a new community. The Pentagon declined immediate comment on the vote. The tensions revolve around a 2006 agreement between the two countries to shuffle U.S. troops in Okinawa to make them more politically acceptable to the local population. The agreement calls for the U.S. to move 8,000 Marines to Guam by 2014 and to shift part of an existing Okinawa helicopter facility to a rural part of the island from a densely populated area. The aim is to diminish local hostility to the Marine presence, which has been stoked by a rape case and a helicopter crash. While the deal reduces the number of Marines on Okinawa, it leaves thousands there, and it doesn't go far enough for many Okinawans, who want the base moved off the island entirely. The ruling Democratic Party of Japan had endorsed that view last year and promised base opponents it would support their cause. But Mr. Hatoyama changed his position under pressure from the U.S. The issue didn't get much attention in a campaign dominated by domestic issues, such as Mr. Kan's pledge to raise the national sales tax to help cut the national debt. The parties that Mr. Kan is likely to invite into a new ruling coalition have either endorsed the U.S. plan or haven't vocally opposed it. In that sense, Mr. Kan may be freer than Mr. Hatoyama to move forward in implementing the U.S. agreement. Mr. Hatoyama's coalition included the left-leaning Social Democratic Party of Japan, which strongly opposes the U.S. military presence in Okinawa—and which left the coalition when Mr. Hatoyama reversed course. But even with support from coalition partners, the issue will require a strong leader to push implantation over powerful local opposition. And Mr. Kan's political capital appears to have been sapped by Sunday's vote, in which his party lost seats. Looking to smooth ties with Washington, Mr. Kan pledged at the outset of his administration to abide by the latest bilateral agreement and called the decades-old security alliance the linchpin of his foreign policy. The challenge he now faces is demonstrating a commitment to implementing the base relocation and repairing relations with the U.S., while working to shift public sentiment on the issue in Okinawa, where the pact is so deeply unpopular that the DPJ chose not to run its own candidate on the southern island. Sheila Smith, a senior fellow for Japan at the Council on Foreign Relations, said the sense of betrayal and anger by Okinawans toward the central government is so strong that changing the sentiment will be very difficult. "The situation is probably the worst it has ever been in terms of political sensitivity," said Ms. Smith, who has followed the Okinawa issue closely.

Link – Okinawa – Withdrawal Popular

The US presence in Okinawa is the central impediment to Kan’s agenda.

John M. Glionna & Yuriko Nagano, Los Angeles Times, 7/12/2010, http://mobile.latimes.com/inf/infomo;JSESSIONID=8DFEC8E980B9DB4ECDF9.735?view=topstoriesitem&feed:a=latimes_1min&feed:c=topstories&feed:i=54885671&nopaging=1

Newly minted Prime Minister Naoto Kan's beleaguered Democratic Party appeared to suffer a resounding defeat in Japan's parliamentary elections Sunday, a blow that threatened to further weaken Kan's already tenuous monthlong hold on power. The Democratic Party of Japan won fewer than 50 seats, well short of the 54 needed for the Democrats and their tiny coalition partner, the People's New Party, to keep their combined majority in parliament's upper house, according to exit polls conducted by Japan's public broadcaster and all major TV networks. Official results were expected Monday. Although the Democrats hold a majority in Japan's more powerful lower chamber, the poor showing will undermine their ability to control the national agenda in the world's second-biggest economy, beset by massive public debt and a foreign policy malaise typified by the lingering dispute over the continuing presence of U.S. troops on the southern island of Okinawa. Kan's party will now need to seek new coalition partners to regain control of the upper house, complicating policymaking as a jaded Japanese public looks on. The defeat also left Kan — who took office in June after his predecessor, Yukio Hatoyama, quit after only eight months — increasingly vulnerable to a challenge from within his party. Analysts had called Sunday's vote a litmus test for Kan, a former finance minister who had sought to distance himself from Hatoyama. The latter was labeled as ineffectual after he failed to deliver on a campaign promise to move a major U.S. military base off Okinawa's main island. Kan pledged to stick to an agreement with Washington to move U.S. Marine Corps Air Station Futenma to a less crowded part of Okinawa despite public demands to move the troops off the island entirely. The plainspoken Kan, 63, took office with a 60% approval rating. But he quickly stumbled, pushing a controversial plan to double the sales tax to 10%, his solution to rein in a public debt that has grown to twice the size of Japan's nearly $5-trillion economy. Drawing criticism that he was as much of a political flip-flopper as his predecessor, Kan then backed off of the tax hike, which had been hailed by some newspaper editorials as a tough and sensible medicine, delaying its timing for up to three years. In a midnight news conference, Kan acknowledged his mishandling of the tax increase had helped set his party up for defeat. "The election results are far from the goal we had," he said. "I believe that a cause for the results coming in this way was due to how I touched on the sales tax issue.... There wasn't enough explanation beforehand." The Democrats surged to power in August, ending half a century of nearly unbroken rule by the Liberal Democratic Party, promising to rein in bureaucrats, cut wasteful spending and bring transparency to the government in Tokyo. But that task has proven unwieldy. Kan is the nation's fifth leader in three years. The political revolving door has caused the public to lose trust in its leadership. "Kan's leadership has been wounded — the Democrats are getting hammered worse than people anticipated," said Jeffrey Kingston, director of Asian studies at Temple University in Japan and author of the book "Contemporary Japan: History, Politics, and Social Change since the 1980s." "The message that Japanese voters are sending is that 'You have disappointed us. You have not delivered.' " Kingston said that Kan has been decisive in the past, joking with reporters that he is a good debater thanks to constant bickering with his wife. But he has been hurt by his handling of the proposed tax increase. "He's not an indecisive guy — he's passionate and resolute," Kingston said of Kan. "But when he backtracked on the tax issue, he looked like just another waffler." And Kan's pledge to work with Washington on its base relocation, Kingston said, could mean an ugly backlash at home.

Link – Okinawa – Withdrawal Popular – AT: Unilateral US Withdrawal Doesn’t Link

The Japanese public wants Obama to reduce the US presence in Okinawa.

Kyodo News Service, Tokyo, 11/5/2008, BBC News, “Japanese areas hosting US forces show mixed reaction to Obama victory”, Lexis-Nexis

Activists and authorities in regional areas of Japan that host US military facilities showed a mixed reaction Wednesday to Barack Obama's victory in the US presidential election, with some expressing hope for improvement and others seeing little possibility of change. In Okinawa, expressions of high expectations regarding the upcoming change of government in the United States were mixed with an air of resignation as some felt Obama would have his hands full with other issues so reducing the southwestern prefecture's burden in hosting US military facilities would not be high on his agenda. Hiroshi Ashitomi, a representative of a group opposing helicopter bases, said he will be paying attention to whether the US military realignment plan devised by a Republican administration would change under Obama,a Democrat."The first black president may be more receptive to the voices of minorities with the same mind-set," Ashitomi said.But Seiei Gakiya, who heads a local shopping area association in Okinawa City near the US Kadena Air Base, said it is unlikely that Obamawill be able to withdraw US troops from Iraq immediately and will probably concentrate on the domestic economy."Economic conditions here will not improve," Gakiya said, referring to low customer traffic in shopping districts near US military facilities that has been linked to problems such as crimes by US personnel. Masaharu Shimanaka of a 500-member labour union made up of Japanese employees at military facilities in Okinawa expressed concern that Obama could reduce bases and thus cut employment. Okinawa Gov. Hirokazu Nakaima said he hopes Obama will "resolve base-related issues such as the consolidation and reduction of US military bases in Okinawa." A senior official of the Okinawa prefectural government in charge of US military base affairs said the future of the US military presence in the prefecture, which hosts the bulk of such facilities in Japan, will depend on how the Japanese government views defence of the nation. US Consul General in Okinawa Kevin Maher, however, emphasized that Washington's security policy towards Tokyo will not change under Obama as US diplomatic policy towards Japan is bipartisan.Meanwhile, in Yokohama, Kanagawa Gov. Shigefumi Matsuzawa expressed hope that the Obama administration may be more willing to listen to voices calling for a revision of the Status of Forces Agreement, which stipulates the operations and legal status of US forces in Japan."Mr. Obama may be more flexible in terms of issues such as the revision of the Japan-US Status of Forces Agreement. There is an increased possibility that he might lend an ear," Matsuzawa told a regular press conference. Masahiko Goto, a lawyer who represents civic groups opposed to the deployment of the nuclear-powered US aircraft carrier George Washington at the US Navy's Yokosuka base in September, said the election of Obama, who has called for change, may provide an opportunity to change Japan's policy towards the United States. "There is also a demand for the Japanese government to change," Goto said. "This is a good chance for Japan to modify its policy of subservience to the United States, such as with the US military realignment in Japan and the deployment of the nuclear-powered aircraft carrier, and to seek to put things on an equal footing." In Iwakuni, Yamaguchi Prefecture, Shinji Kashiwabara, honorary chief of the Iwakuni chamber of commerce, which has accepted the planned relocation of US carrier-borne fighter jets to the western Japanese city from Atsugi base, located in a densely populated area outside of Tokyo, said the realignment plan will not change as local people have been preparing for the move. In Hiroshima, Mayor Tadatoshi Akiba issued a statement saying he hopes Obama's victory will lead the United States to change its nuclear policy as the president-elect has said he will aim to eliminate nuclear weapons.

Link – Okinawa – New Komeito Party

Kan needs to coalition with New Komeito to get his agenda – Okinawa is key to make that happen.

Yuka Hayashi, WSJ (Wall Street Journal), 7/23/2010, "Japan's New Komeito Won't Partner With DPJ", http://online.wsj.com/article/SB10001424052748703294904575384763505191770.html?mod=googlenews_wsj, AT

TOKYO—The head of a key opposition party in Japan said Friday it is unlikely to join forces with Prime Minsiter Naoto Kan's Democratic Party of Japan any time soon, underscoring the difficulty the ruling party will face in enacting policies following its major election defeat earlier this month. Natsuo Yamaguchi, chief representative of New Komeito party, said in an interview that the ruling party must stop "drifting" over important policy issues such as a proposed increase in the national sales tax and the relocation of U.S. bases in Okinawa before his party can consider taking joint action with it in parliament. DPJ leaders also must explain their involvement in campaign funds scandals more clearly, while improving "governance" in managing party affairs, he said. The DPJ's press office declined to comment on Mr. Yamaguchi's remarks, referring to party leaders' previous comments on these topics. The spotlight on New Komeito, a party closely associated with a powerful Buddhist sect in Japan called Sokagakkai, has intensified as it is considered a potential coalition partner to Mr. Kan's DPJ. Having lost its majority in one of the two chambers of parliament as a result of the July 11 elections, the DPJ now needs cooperation from smaller parties to secure a working majority to pass most types of legislation.

Link – Okinawa – Your Party

Kan needs to coalition with Your Party to get his agenda – their platform is opposition to the US presence in Okinawa.

Sachiko Sakamaki, Takashi Hirokawa, BusinessWeek, 7/11/2010, " Japan's Your Party Gains in Vote, Making It Key to Legislation ", http://www.businessweek.com/news/2010-07-11/japan-s-your-party-gains-in-vote-making-it-key-to-legislation.html, AT

Japan's opposition Your Party won 10 seats in upper house elections yesterday, vaulting the group formed 11 months ago into a position to make or break legislation proposed by a weakened ruling bloc. Your Party leader Yoshimi Watanabe vowed not to join Prime Minister Naoto Kan's Democratic Party of Japan-led coalition and to pursue a separate legislative agenda. Kan will have to negotiate with the new group as well as the main opposition Liberal Democratic Party on legislation, potentially signaling renewed political gridlock. Watanabe is a former LDP cabinet minister. “We'll see political power games and Kan won't be able to deliver policies easily,” said Jiro Yamaguchi, political science professor at Hokkaido University in northern Japan. Your Party “will try to play a kingmaker role.” Watanabe's group campaigned on a promise to slash the ranks of civil servants by one third and to cut corporate taxes. Its members also opposed raising the sales tax to curb the nation's debt, an approach favored by both the LDP and DPJ. Raising the consumption tax would drag on the economy at a time when it is struggling to overcome two decades of stagnant growth, Kenji Nakanishi, a former JPMorgan Chase & Co. executive and Your Party candidate, said earlier this month. Nakanishi defeated Justice Minister Keiko Chiba in Yokohama to win yesterday. Former Tully's Coffee Japan Co. President Kota Matsuda was another of Watanabe's candidates who won. Kan's coalition now has 110 lawmakers in the 242-seat upper house after yesterday's vote, compared with Your Party's 11. Kan's block has 311 seats in the lower house, short of the two- thirds majority necessary to overrule upper house decisions. “It's inevitable that the influence of the policy agendas of the LDP and Your Party will increase,” Hiromichi Shirakawa, chief Japan economist at Credit Suisse Group AG in Tokyo, wrote today in a report. Watanabe, a financial services minister in the LDP, formed Your Party ahead of last year's lower house contest. Support for the group gained as Kan's predecessor Yukio Hatoyama failed to make good on campaign promises such as relocating a U.S. military base off the island of Okinawa. “Your Party will become a key player in the divided parliament,” Hiroyuki Kishi, professor of economic policies at Tokyo-based Keio University, said in an interview. “The party presents an alternative.”

Internal – Winners Win/Okinawa Key

Kan needs policy victories to get his agenda – resolving the dispute regarding Okinawa is key.

Kyodo News, 6/11/2010, “Stability, unity key to Kan’s success: expert http://search.japantimes.co.jp/cgi-bin/nn20100611f2.html

WASHINGTON — Ensuring stability and unity, unlike the previous administration, is key to the success of the new government of Prime Minister Naoto Kan, according to a U.S. expert. "Stability in governance and unity in terms of the execution of policy, both domestic and foreign policy, I think, will be very key to Mr. Kan's success," Sheila Smith, senior fellow for Japan studies at the Council on Foreign Relations, said in a recent interview. Noting Kan is Japan's fifth prime minister in four years, Smith said, "There is a lack of stability in Japanese political thinking, but of course, serious instability in terms of governance." She also said there was "a certain amount of disunity, or at least the appearance of disunity," in the government of Kan's predecessor, Yukio Hatoyama, who resigned last week after some eight months in office. "People were saying different things. It wasn't clear which way the government was going" under Hatoyama, Smith said, adding that what is needed now is a cohesive policy team. Smith said she finds the elevation of Kan "refreshing," as he is not from a political family, unlike the four previous prime ministers, who were all descended from former leaders. Coming from a citizen activist background, Kan's starting point is that governance must be responsive to the needs of citizens, as his time as health and welfare minister in 1996 proved, she said. "If he can carry that perspective effectively into the prime minister's office," Kan will succeed in steering the nation's politics, Smith said. Smith, who has followed Japanese politics over 20 years through various postings, including in Japan, pointed out that Kan and U.S. President Barack Obama may get along well due to their "pretty similar backgrounds." "Barack Obama is a community organizer from the streets of Chicago. . . . They can relate to where they came from and how they ended up in national politics and how they ended up as leaders of their two countries," she said. The new government under Kan and the Obama administration need to build "consistent interaction at all levels of the government" to maintain their alliance, Smith said. With regard to Hatoyama's government, Smith said it did not have "a big strategic vision within which the alliance functioned." On Japan's postponed national defense program outline, Smith noted that if Tokyo draws up the national defense policy guideline, it will be much easier for the two countries to resolve the issue of how to relocate U.S. Marine Corps Air Station Futenma in Okinawa, as Washington will better understand Japan's strategic priorities. Calling the base relocation issue "an Achilles heel for the alliance," Smith said the challenge for Kan and his Cabinet, as well as for the U.S. government, is "whether they can persuade the people of Okinawa that they can offer them a better opportunity to reduce the burden." "It's time to look toward a more mature basing policy as we look forward," she said.

Internal – Okinawa Key

Opposition to Kan is founded on Okinawa.

The Voice of Russia, Jun 8, 2010, “US base remains on Okinawa”, http://english.ruvr.ru/2010/06/08/9395946.html

Yukio Hatoyama ignored these appeals, and moreover, he broke his election promises. He insisted that the base must be removed from the country or at least from the Okinawa Prefecture. Under a U.S.-Japanese joint agreement signed on the 28th of May, the base will be re-dislocated but will remain on the island. This predetermined the fate of the government headed by Yukio Hatoyama. By confirming his adherence to the agreement with Washington, Prime Minister Naoto Kan risks losing the support of voters. The reason here is that the move worries the residents of the city of Nago, where the new air force base will be dislocated. In short, experts forecast a hot political summer on Okinawa. The opposition is trying its best to capitalize from the ambiguous situation where the new Prime Minister resumes a policy that has led to the resignation of his predecessor. The opponents of the ruling Democratic Party have already described the replacement of Yukio Hatoyama by Naoto Kan as the “replacement of a billboard”. It says that the new Prime Minister should be blamed for the failures and mistakes committed by the previous government.

Disputes over Okinawa block the DPJ agenda.

The Japan Times, 9-9-09, Staff Report, http://search.japantimes.co.jp/cgi-bin/nn20090909a3.html

The Democratic Party of Japan floated a compromise Tuesday in hopes of reaching a broad agreement with two small opposition parties on forming a coalition government, but the talks ended in the evening with no firm resolution and another meeting was set for Wednesday. The DPJ promised to clearly state plans to revise the planned reorganization of the U.S. forces in Japan. Members of the Social Democratic Party, however, said they still need to hold an executive meeting Wednesday to consider the DPJ's policy proposals. After the meeting, SDP Secretary General Yasumasa Shigeno said the biggest stumbling block involves the U.S. military bases in Okinawa, without elaborating. DPJ Secretary General Katsuya Okada said the DPJ and SDP have yet to agree on national security policy and on creating a policy discussion panel inside the government. He added he hopes the three parties can reach an agreement Wednesday but declined to provide any more details. Earlier in the day, DPJ Policy Research Committee chief Masayuki Naoshima held talks with his counterparts Tomoko Abe of the SDP and Shozaburo Jimi of Kokumin Shinto (People's New Party). Abe said the DPJ presented her party and Kokumin Shinto with a revised coalition deal in line with their request that it articulate a pledge to revise the U.S. military realignment plan. The policy chiefs also basically agreed to include a call to revise the Japan-U.S. Status of Forces Agreement and to promote steps to combat global warming. The DPJ hopes to reach a final agreement Wednesday on creating a coalition, with DPJ President Yukio Hatoyama set to meet with SDP leader Mizuho Fukushima and Kokumin Shinto chief Shizuka Kamei. The DPJ, which won control of the Lower House in the Aug. 30 election, still needs to tie up with the two parties to retain control of the Upper House, which has no election slated until next summer.

Internal – New Komeito/Your Party Key

The DPJ needs to coalition with Your Party or New Komeito to get its agenda past LDP opposition.

Mainchini Daily News, 7/17/2010, “Your Party, New Komeito now hold decisive vote in upper chamber”, http://mdn.mainichi.jp/mdnnews/news/20100712p2a00m0na030000c.html

Opposition parties Your Party and New Komeito hold the power of making decisive votes in the House of Councillors after the Democratic Party of Japan (DPJ)-led ruling coalition fell short of a majority in the chamber following the July 11 election. A fierce tug-of-war on issues is expected between the two parties in this so-called "third bloc" in the Diet, behind the ruling coalition and the largest opposition Liberal Democratic Party (LDP). Newly formed Your Party made a strong showing in the election, winning 10 seats, by garnering support mainly from independent voters in big cities. Your Party leader Yoshimi Watanabe suggested the party may initiate alliance talks with the DPJ, urging the governing party to compromise with it over its demand for public service reform. "Our presence has significantly increased," Watanabe told reporters. "We'll present policy issues to the Diet one after another. By doing so, I'm sure we can find a way out of the nation's current difficulties." However, there remains a wide gap between Your Party and the DPJ over key policy issues including a consumption tax hike.

Kan must compromise with smaller parties to get his agenda.

Devin Stewart, Program Director and Senior Fellow, Carnegie Council for Ethics in International Affairs, 7/15/2010, Huffington Post, "Will a Rudderless Japan Drift into Crisis?", http://www.huffingtonpost.com/devin-stewart/will-a-rudderless-japan-d_b_648321.html, AT

The upper house election in Japan last Sunday dealt a huge blow to the ruling Democratic Party of Japan (DPJ), leaving the country with a "twisted" parliament and no clear path forward. In contrast to the previous decades of nearly uninterrupted single-party rule, the new, messier political environment is a positive sign for Japanese democracy. But this difficult transition to a new mode of governing comes at a time when strong leadership is needed to address a possible sovereign debt crisis that could hit within five years. Ironically, the DPJ's defeat last Sunday was partly the result of Prime Minister Naoto Kan's flip-flopping over a consumption tax that was meant to help stave off any problems emanating from its exceptionally large debt-to-GDP ratio (near 200 percent). Most voters support the tax but the prime minister buckled under criticism on the issue, fostering the impression that he is simply an opportunist. The party's loss may have made prospects for reform "an uphill battle." I had the chance to talk with people from media, politics, government, business, and academia in Japan during the week leading up to election day. Consistent with the polls, many of the people I spoke with were undecided about which party to support, and the murky election result may delay financial reforms. Rating agencies Standard & Poor's and Fitch have warned of possible credit rating downgrades due to Japan's expected political gridlock, which may hinder the country's ability to reign in its sovereign debt. Yet there is good news. While the lower house election last August was a rejection of the long-ruling Liberal Democratic Party (LDP), last week's upper house election was about real issues while also serving as a referendum on the DPJ's 10 months in power. A political monopoly has been replaced by a period of what Japan expert Gerald Curtis calls political "creative destruction." One DPJ staffer told me that the current, more pluralistic public debate over policy issues was the legacy of former Prime Minister Yukio Hatoyama. Whether or not by design, the two administrations of Kan and Hatoyama have put on the table thorny issues, including the logistical details and strategic importance of the U.S.-Japan alliance and the previously unpopular idea of a consumption tax, which led to the downfall of the Ryutaro Hashimoto administration more than ten years ago. I was told the DPJ expression for this expanded public square is "the new public." Meanwhile, the new smaller parties actually stand for something other than an unbridled thirst for power. In particular, Your Party, analogous perhaps to American libertarians, seeks an inflation target and to shrink the government, thus unleashing Japan's entrepreneurial spirit and creating jobs. Your Party did quite well, gaining ten seats. It appeals to a common frustration in Japan with government in general and is populated with stars from Tully's Coffee Japan, JP Morgan Chase, and the Ministry of Economy, Trade and Industry (METI). The outcome is a real multi-party system. But contrary to hollow calls for a revolution last fall, this is the new reality: the slow democratic politics of compromise.

Internal – New Komeito Key

New Komeito is key to Kan’s economic agenda.

Chisa Fujioka, Reuters, 6/21/2010, “Japan opposition party rules out coalition with DPJ”, http://in.reuters.com/article/idINIndia-49494620100621, AT

TOKYO: Japan's third-biggest political party has ruled out teaming up with the Democrats even if the ruling party falls short of a majority in an upper house poll next month, an outcome that would cloud the policy outlook. The Democratic Party of Japan (DPJ), which swept to power in a general election last year, will run the government regardless of the result of the July 11 poll but the party risks policy deadlock if it fails to win a majority in the upper chamber. Analysts say Japan's opposition New Komeito party could be a possible coalition partner for the DPJ should a weak election outcome hamper their ability to forge ahead with plans to strengthen an economic recovery and cut huge public debt.

Impact – Tax Reform Bad – Japan Economy

Tax reform causes a Japanese economic recession – history proves.

Paul J. Scalise, research fellow at Temple University Japan, guest columnist at Newsweek, 6/12/2010; http://www.newsweek.com/2010/06/12/kan-s-megaproblem.html

Japan’s former finance minister, Naoto Kan, has become the nation’s fifth prime minister in just four years—and the predictable cycle of high expectations followed by mild cynicism has begun anew. How long he will remain in office is anyone’s guess, but one thing is certain: trying to solve government finances could be for this premier the same kind of career killer that the Futenma base-relocation issue was for the last one. The inescapable math of an aging society that has been promised huge retirement and welfare benefits, which are not fully covered by taxes, could make Kan’s tenure a true test of government and party leadership. Japan’s gross debt-to-GDP ratio is second only to Zimbabwe, at almost 200 percent. Even if double counting the debt (what government agencies owe each other) were deducted, net debt is still 113 percent of GDP. That’s about the same ratio as Greece, which ignited a continent-wide financial meltdown earlier this year. No one can predict if or when the Japanese bond market will collapse, of course, but rating agencies, the Organization for Economic Cooperation and Development, and the International Monetary Fund have all publicly expressed concern. Aging populations exacerbate pension costs and pay fewer taxes. In Greece, the 65-and-over population is projected to increase from 18 percent of the total in 2005 to 25 percent in 2030. For Japan, the swell is worse, from 19.9 percent to 30 percent. Until recently, Japan’s debt—the total of all annual budget deficits—was allowed to build thanks to the country’s unique market conditions. With 95 percent of the national debt held by Japanese, increased government borrowing from its own citizens was arguably nothing more than a domestic transfer—a shift of funds from the right hand (taxes to pay off the debt) to the left hand (interest income for bond holders). As long as interest rates remained artificially low and competing investment opportunities in the private sector limited, the government could manage the bond market without depending on the kindness of foreign lenders. It could tap into the country’s savings surplus until the economy recovered. Except for one unforeseen glitch: the economy never recovered. Throughout two “lost decades,” Japan applied small Band-Aids to festering fiscal wounds that drained the country of its dynamism and prolonged the recession. In lieu of major tax cuts or aggressive spending that could have stimulated economic growth, the Japanese government and the Liberal Democratic Party (LDP) opted for incremental tax hikes, increases on insurance premiums on social welfare, and minor cuts in benefits. Today, the government has maneuvered itself into a cul-de-sac. The three largest expenditures—social security, debt servicing, and tax transfers to local governments—have grown from 30 percent of the national budget and 1 percent of GDP in 1960, to staggering heights: 70 percent of the national budget, and 13 percent of GDP. Any attempt now to cut welfare benefits drastically, raise taxes sharply, or reduce its legal obligations to financially strained local economies like Osaka and Akita would, at least in the short term, throw the economy deeper into recession. Ironically, that would make delivering these promised benefits all the more difficult.

Tax reform causes deflation without increasing tax revenue, jacking Japan’s economic recovery.

Yuka Hayashi, 3/1/2010, Wall Street Journal, “Japan takes hard look at massive debt”, http://www.theaustralian.com.au/business/news/japan-takes-hard-look-at-massive-debt/story-e6frg90x-1225835451996

Raising the tax could hurt Mr Hatoyama's party in future elections, including elections for the upper house of parliament set for July. The idea is unpopular with voters, especially Japan's large bloc of senior citizens. But advocates say a tax increase is probably the most effective way to reduce the deficit and secure funds to cover the nation's ballooning pension and medical costs. Experts generally agree an increase in the sales tax is inevitable, but differ on how it should be implemented. Some argue any increase should be phased in slowly and not started until it's clear it won't kill Japan's economic recovery. Japan has gone down this road before. A 1997 sales-tax increase triggered a sharp drop in consumption and was blamed for pushing the economy back into a slump and sparking a broad decline of prices for goods and services in the economy. The tax idea faces opponents inside the government too. International Affairs Minister Kazuhiro Haraguchi, said: "I'd like to point out boosting tax burdens when (Japan's) regions and economy are fatigued like this would only result in lower tax revenues."

Impact – Tax Reform Bad – Japan Economy

Raising the consumption tax empirically derails Japanese growth.

Economist, 6/24/2010, "Enter the prudent Mr Kan", http://www.economist.com/world/asia/displaystory.cfm?story_id=16438735

Promising higher taxes to deflation-coshed voters just ahead of an important election would be a strange calculation in any country. In Japan it has additional political and economic poignancy. The consumption tax reaped devastating results for its supporters in upper-house elections shortly after it was introduced in 1989. After it was raised to 5% in 1997, it once more harmed its sponsors and helped derail Japan’s economic recovery, plunging the country into a second lost decade of economic growth.

Raising taxes ends growth, causing deflation.

Robert Gavin, economics reporter-Boston Globe 7/21/2010, Eric Rosengren = president of the Federal Reserve Bank of Boston, http://www.boston.com/business/articles/2010/07/21/rosengren_says_keep_stimulus_rolling/

Rosengren pointed to Japan's experience, which he studied as an economic researcher. Japan experienced a similar real estate bust and banking crisis in the 1990s, which policy makers battled by cutting interest rates and boosting government spending. As the economy began to rebound and concerns about budget deficits grew, Japanese policy makers raised taxes and cut spending too soon, stalling the recovery and setting off deflation: a debilitating cycle of falling prices. Deflation, a mark of the Great Depression, occurs when weak demand drives businesses to slash prices to attract buyers, who remain on the sidelines waiting for prices to fall further. Inventories build, businesses cut production, and more workers lose jobs. Consumers cut spending, and the cycle repeats. Once deflation sets in, Rosengren said, it is very difficult for policy makers to revive the economy. “In Japan,'' he said, “it's been a 15-year battle that they have yet to win.''

Impact – Tax Reform Bad – AT: Tax Reform Key to the Economy

Japan’s economy is stable – the consumption tax will crush growth.

(Andy Hoffman, Barrie McKenna, Globe and Mail, 7/12/10, " Setback at polls casts doubt on Japan's economic reforms ", http://www.theglobeandmail.com/report-on-business/economy/setback-at-polls-casts-doubt-on-japans-economic-reforms/article1636586/)

Despite its debt issues and troubling inflation, Japan's economy has performed well lately, with GDP increasing 4.6 per cent in the first quarter, the second-fastest among the Group of Eight countries behind Canada. As well, Japan's debt troubles are less problematic than many countries because the vast majority of government debt is held by domestic investors. The election losses will make it more difficult for Mr. Kan to push fiscal austerity. But Drummond Brodeur, vice-president and portfolio manager at Signature Global Advisors in Toronto, noted that it was always going to be a hard sell for Mr. Kan because there's no sense of urgency among the Japanese to put the country's fiscal house in order. “;Japan has been in a deflationary, stagnant economy for two decades now. So there's no sense of crisis,” he said. Nor is there a sense of crisis in financial markets: Interest rates are near zero and the yen is near its all-time high versus the U.S. dollar. Mr. Brodeur also pointed out that Mr. Kan was facing dissent within his party on the consumption-tax hike, even before the Upper House election. There's a legitimate concern that raising the consumption tax could hurt Japan's fragile consumer economy, just as it did in the mid-1990s, the last time the rate was hiked, he said.

Kan’s tax reform proposal won’t generate additional revenue – there’s only a risk it hurts growth.

The Yomiuri Shimbun, 7/14/2010, Daily Yomiuri Online, http://www.yomiuri.co.jp/dy/editorial/20100715TDY02T05.htm

During the election campaign, Kan suggested strengthening the progressive taxation system, under which high-income earners and others bear heavier tax burdens. However, the maximum income tax rate already stands at 40 percent, which is high by international standards. Because this rate is applied to only a few taxpayers, no visible tax revenue increase can be expected from Kan's plan. Rather, the prime minister seemed to be trying to fend off public criticism that the proposed consumption tax hike would hurt the pockets of the wider general public. Raising the maximum income tax rate will discourage people from working hard and undermine efforts to energize the country's businesses.

Impact – Japan Economy Good – Global Economy

Japan’s economy is key to the US and global economy

William Cooper, Specialist in International Trade and Finance for the Congressional Research Service, 2007, Congressional Research Service, “U.S.-Japan Economic Relations: Significance, Prospects, and Policy Options,” http://www.fas.org/sgp/crs/row/RL32649.pdf

Japan and the United States are the two largest economic powers. Together they account for over 40% of world domestic product, for a significant portion of international trade in goods and services, and for a major portion of international investment. This economic clout makes the United States and Japan powerful actors in the world economy. Economic conditions in the United States and Japan have a significant impact on the rest of the world. Furthermore, the U.S.-Japan bilateral economic relationship can influence economic conditions in other countries. The U.S.-Japan economic relationship is very strong and mutually advantageous. The two economies are highly integrated via trade in goods and services — they are large markets for each other’s exports and important sources of imports. More importantly, Japan and the United States are closely connected via capital flows. Japan is the largest foreign source of financing of the U.S. national debt and will likely remain so for the foreseeable future, as the mounting U.S. debt needs to be financed and the stock of U.S. domestic savings remains insufficient to meet the demand. Japan is also a significant source of foreign private portfolio and direct investment in the United States, and the United States is the origin of much of the foreign investment in Japan.

Japanese economic crisis draws in the globe.

Roland Buerk, BBC News, reporter stationed in Tokyo, 7/12/2010, “Poll blow raises Japanese economy fears”, http://www.bbc.co.uk/news/10594674

Opinion is divided about the threat posed by the country's debt. Many feel Mr Kan's warnings of an impending crisis may have gone too far because 95% of the government's bonds are held by Japanese savers and institutions. Some fear Japan is failing to tackle problems caused by its aging society They are much less likely to cut and run than the foreign creditors to which many other countries owe money. But doom-mongers argue that as Japan's population continues to age the savings rate is likely to decline further, forcing Japan eventually to borrow more from abroad. The higher interest rates demanded could make servicing the debt unsustainable, tipping the country into the abyss. What is not in doubt is if the crunch comes it would dwarf the problems posed by Greece. Japan is the world's second biggest economy, and in a crisis could be expected to draw in its resources, massive corporate investment abroad and a huge stake in the debt of the US government.

Impact – Japan Economy Good – Asian Instability

Japanese economic depression causes Asian instability - potential hotspots

Michael Auslin, resident scholar at the American Enterprise Institute, 2/17/2009, Wall Street Journal, “Japan’s Downturn Is Bad News for the World,” http://online.wsj.com/article/SB123483257056995903.html

Recently, many economists and scholars in the U.S. have been looking backward to Japan's banking disaster of the 1990s, hoping to learn lessons for America's current crisis. Instead, they should be looking ahead to what might occur if Japan goes into a full-fledged depression. If Japan's economy collapses, supply chains across the globe will be affected and numerous economies will face severe disruptions, most notably China's. China is currently Japan's largest import provider, and the Japanese slowdown is creating tremendous pressure on Chinese factories. Just last week, the Chinese government announced that 20 million rural migrants had lost their jobs. Closer to home, Japan may also start running out of surplus cash, which it has used to purchase U.S. securities for years. For the first time in a generation, Tokyo is running trade deficits -- five months in a row so far. The political and social fallout from a Japanese depression also would be devastating. In the face of economic instability, other Asian nations may feel forced to turn to more centralized -- even authoritarian -- control to try to limit the damage. Free-trade agreements may be rolled back and political freedom curtailed. Social stability in emerging, middle-class societies will be severely tested, and newly democratized states may find it impossible to maintain power. Progress toward a more open, integrated Asia is at risk, with the potential for increased political tension in the world's most heavily armed region. This is the backdrop upon which the U.S. government is set to expand the national debt by a trillion dollars or more. Without massive debt purchases by Japan and China, the U.S. may not be able to finance the cost of the stimulus package, creating a trapdoor under the U.S. economy.

Aff – Not Unique – Tax Reform Will Pass

Tax reform has broad support among legislators and the public – election losses signaled opposition to Kan, not the reforms.

Reuters, 7/13/2010, “WRAPUP 3-Japan signals tax reform, seeks to avoid deadlock” http://www.reuters.com/article/idUSTOE66C00G20100713

TOKYO, July 13 (Reuters) - Japan's government said on Tuesday it had to press on with tax reforms to cut a huge public debt despite a stunning election setback, and was looking to two opposition parties to help drive policy change. Prime Minister Naoto Kan's ruling coalition lost its upper house majority in a weekend election, putting his policies to deal with debt and generate growth at risk and prompting warnings by credit rating agencies S&P and Fitch on Japan's sovereign ratings. Kan has another pressing headache: a possible challenge from rivals in his own party including powerbroker Ichiro Ozawa, a critic of the sales tax hike proposal, ahead of a party leadership vote in September. A Kyodo news agency survey showing support for Kan's government had sunk to 36.3 percent from 43.4 percent before the election could undermine his efforts to keep his job. His Democratic Party of Japan (DPJ) still controls the more powerful lower house. But it needs help from other parties to push bills through the upper chamber in the struggle to end decades of stagnation in the world's No.2 economy. "If we don't see a credible plan come through by the end of the year, it will send a negative signal for its rating, adding pressure to the credit rating," Andrew Colquhoun, Fitch Rating's sovereign analyst for Japan, told Reuters. Trying to soothe worries the election drubbing would sap political momentum for fiscal reform, National Strategy Minister Satoshi Arai said debate was still needed on a possible hike in the 5 percent sales tax, one of the lowest among major economies. Kan had floated the possibility of doubling the tax as a way to bring down public debt about twice the size of the $5 trillion economy and to stave off a Greek-style debt crisis as social security costs soar to care for an ageing population. Finance Minister Yoshihiko Noda conceded that Kan's proposal may have turned off voters in the election campaign. "But we must carry out an overhaul of the tax system including the consumption tax," he told a news conference. Most opposition parties support an eventual sales tax rise and the Kyodo survey showed a slight majority of voters do as well, but Kan's abrupt floating of the topic and seeming flipflops cost the Democrats support, analysts said. Unlike Greece, Japan's public debt has long been financed from its massive pool of domestic savings that mostly sits in the banking system and is recycled into Japanese government bonds. But fears are growing that the ageing population will start drawing on those savings, forcing Japan to rely on foreign investors to fund its debt and potentially creating market instability. The change has already started and Japan's savings rate has fallen to about 3 percent from over 10 percent a decade ago. The Fitch warning of the higher risk of a ratings downgrade helped send September Japanese government bond futures to the day's low at 141.33 2JGBv1.

Aff – No Link – Okinawa Not Key

Kan’s potential coalition partners don’t oppose the US presence – it’s not key to his agenda.

Daisuke Wakabayashi and Yuka Hayashi, WSJ (Wall Street Journal), 7/12/2010, “Weakened Kan Faces Deadlines on Okinawa” http://online.wsj.com/article/SB10001424052748703580104575360660021162180.html

The tensions revolve around a 2006 agreement between the two countries to shuffle U.S. troops in Okinawa to make them more politically acceptable to the local population. The agreement calls for the U.S. to move 8,000 Marines to Guam by 2014 and to shift part of an existing Okinawa helicopter facility to a rural part of the island from a densely populated area. The aim is to diminish local hostility to the Marine presence, which has been stoked by a rape case and a helicopter crash. While the deal reduces the number of Marines on Okinawa, it leaves thousands there, and it doesn't go far enough for many Okinawans, who want the base moved off the island entirely. The ruling Democratic Party of Japan had endorsed that view last year and promised base opponents it would support their cause. But Mr. Hatoyama changed his position under pressure from the U.S. The issue didn't get much attention in a campaign dominated by domestic issues, such as Mr. Kan's pledge to raise the national sales tax to help cut the national debt. The parties that Mr. Kan is likely to invite into a new ruling coalition have either endorsed the U.S. plan or haven't vocally opposed it. In that sense, Mr. Kan may be freer than Mr. Hatoyama to move forward in implementing the U.S. agreement. Mr. Hatoyama's coalition included the left-leaning Social Democratic Party of Japan, which strongly opposes the U.S. military presence in Okinawa—and which left the coalition when Mr. Hatoyama reversed course.

Aff – Link Turn – Japan Opposes Withdrawal

Japan opposes a total withdrawal of the US presence.

William Breer, Senior Adviser, Center for Strategic and International Studies, 5/2010, Brookings, http://www.brookings.edu/opinions/2010/05_east_asia_breer.aspx

Despite periodic outbursts of opposition to nuclear ship home-porting or other aspects of the U.S. deployment in Japan, support among the Japanese people for the security relationship has remained at a remarkably high level. As a result the U.S. has had a relatively free hand in the use of our facilities and in the deployment of forces there. Generations of Japanese leaders have cooperated with U.S. security needs. These include a contribution of $13 billion in support of the first Gulf War, the dispatch of ground forces in support of our operations against Saddam Hussein, and generous foreign assistance to many places in which we have a strategic interest, including Afghanistan. Japan has also for the past 25 years made major contributions - $4-5 billion per year - to the support of U.S. forces in Japan. Who would have imagined 60 years ago that there would be significant U.S. military facilities in Japan in 2010?

Japan wants to maintain a strong alliance with the US.

Michael Green, senior adviser and holds the Japan Chair at CSIS, associate professor of international relations at Georgetown University, 8/7/2009, http://csis.org/publication/reluctant-realism-redux-us-japan-ties-under-dpj

They have mostly chosen the latter—for good reason. While the public has some specific complaints about the alliance, overall support for the alliance is high, particularly in the wake of North Korean provocations and China’s rapidly growing power. Mismanaging the alliance would undermine public confidence in the DPJ and open the party to fissures between conservatives and liberals that the LDP could exploit. Japan remains a center-right nation. Ozawa and Hatoyama know that the DPJ must shift to the center and demonstrate competence if it wants to deal a knockout blow to the LDP. As a result, in the new election Manifesto issued July 26, the DPJ expressed support for the US-Japan alliance (including a bilateral Free Trade Agreement) and dropped opposition to MSDF refueling operations in the Indian Ocean until at least January when the current law expires. On the other problematic issues of revising the SOFA, and base agreements, the Manifesto only expressed a vague “desire to move towards revision.” Party leaders have told the press they will focus on building a personal relationship with President Obama and his key cabinet officials before raising difficult bilateral issues.

Japan Politics Aff Adv – Tax Reform Good – 1AC

Japan’s current government can’t get its economic agenda, making a debt crisis and global economic decline inevitable.

The Nation, July 13, 2010, “Election Defeat”, Lexis-Nexis

Voters handed a stinging defeat to Japan's ruling party in weekend elections, rejecting a proposal to increase taxes and handicapping a fledgling government struggling to keep the world's second-largest economy from financial meltdown. Results compiled in major newspapers yesterday showed Prime Minister Naoto Kan's party fell far short of maintaining a majority in the upper house of parliament. The ruling Democratic Party of Japan won only 44 seats, far below Kan's target of 54, while the opposition won 51 and gained control together with its coalition partners. With public spending at more than double its GDP, Japan is trying to manage its ballooning debt while also addressing high unemployment and stagnant growth. Kan has warned the country could face a Greek-style meltdown if it does not get its finances in order â€“ possibly by raising the sales tax. But the grave losses indicate voters have rejected his solution, and will make it difficult for his government to effectively revive the economy. "I think the Democrats lost the election for a reason. It's wrong to raise the national consumption tax at a time when the economy is so bad and people are suffering," said Shigeru Sugawara, 60, an apartment building manager in Tokyo. The estimates were in stark contrast to the Progressive Party's landslide victory last August. Projections showed the Democrats ended up with 110 seats, well below its goal of maintaining a majority in the 242-member upper house. Many prominent candidates were defeated, including Justice Minister Keiko Chiba. Official government results were not expected until late yesterday, but Kan acknowledged defeat early in the morning, saying he failed to fully explain his proposal to raise the sales tax from 5 per cent to as much as 10 per cent. "The biggest reason for the defeat of the Democratic Party was Prime Minister Kan's handling of the consumer tax issue," said an editorial in the national Yomiuri newspaper. The election won't directly affect the Democrats' grip on power because they control the more powerful lower house of parliament. But it does raise the serious prospect of gridlock. "It's bad news for Kan and the party, and its really bad news for the nation because it means there isn't going to be resolute action on all the festering problems facing the government," said Jeff Kingston, director of Asian studies at Temple University in Japan. "And that's got global repercussions." Japan is deeply invested in worldwide markets, and slow growth here can have a significant impact on the global economy. Kan said his experience as finance minister made him keenly aware of the need to keep Japan's economic engine running, and not seek short-term fixes. Kan vowed to press on with economic reforms even if they are not easy to stomach. "I sincerely and humbly accept this result," he said, adding: "I will continue to push for responsible government." As the results came in, Kan said that his stance was seen as "sudden" by voters. But he said Japan needs to avoid a situation â€“ like the one seen in Greece â€“ in which public spending becomes unsustainable and leads to painful cuts in pensions and government salaries and benefits. Many economists have slammed his analogy with Greece as alarmist â€“ primarily because most of Japan's government bonds are held by domestic investors, meaning they are less likely to bolt â€“ and analysts said voters recoiled from the idea of paying more taxes. "I don't think Japan is in a position like Greece, but things aren't good, either," said Kingston. "I don't think markets are going to react well to this. We are going to go through another period of a rudderless Japan. Japan's leadership crisis is not over."The results did not appear to pose an immediate threat to Kan's job, however, and the prime minister said he does not intend to carry out a major shake-up of the Cabinet, though he must defend his post in party polls in September. Even so, the defeat was a sharp rebuke."People had very high hopes of the Democrats, and they feel betrayed," said Tomoaki Iwai, a political science professor at Nihon University in Tokyo."This is a vote against the ruling party, not a vote for the opposition."

Japan Politics Aff Adv – Tax Reform Good – 1AC

Okinawa is the key impediment to Kan’s agenda – only withdrawal garners political support.

Press TV, 7/22/2010, " Moving of US base in Japan in limbo ", http://www.presstv.ir/detail.aspx?id=135785&sectionid=351020406, AT

The two countries have entered talks to postpone a decision on the location and construction of another site for the US Futenma airbase on Okinawa, Japanese media said on July 21. US and Japan had agreed on the repositioning of the base to a less crowded part of the island of Okinawa in May, despite popular calls for the removal of US troops from the island. According to Reuters, Japan's Defense Ministry has said that the base relocation talks need to take into account an Okinawa gubernatorial election in November, indicating a final decision could be made later than planned. The unpopular base relocation plan threatens the government of Japan's Premier Naoto Kan after it led to the resignation of the country's previous Prime Minister Yukio Hatoyama. The new premier took office in June after Hatoyama was forced to resign over his failure to keep his election promise of moving the controversial US base off Okinawa. The Futenma base has provoked a wave of anger in Japan, with the nation demanding a complete removal of the airbase from Okinawa. Despite widespread criticism, the new premier has confirmed that he will honor the latest Japan-US agreement for the relocation of the airbase on Okinawa.

That political support spills over and allows Kan to get his tax reform policies.

Justin McCurry, GlobalPost correspondent for Japan, 7/17/2010, GlobalPost, http://www.globalpost.com/dispatch/japan/100715/global-economy-japan?page=0,1

"It is possible to say that support for a sales tax increase may rise if persuasive arguments are presented to voters, including cutting government waste,” the Asahi Shimbun newspaper said. The public’s gripe with Kan is rooted in his confused approach to the scale and purpose of his proposed tax changes, a criticism he accepted in the immediate aftermath of defeat. “I am sorry that my remarks were misunderstood," he said. "The election result shows that the country needs to have a proper debate before any decision is taken on tax." Martin Schulz, senior economist at the Fujitsu Research Institute in Tokyo, believes Kan could win the tax debate as long as he proves his credentials in other policy areas, such as social security spending and wresting power from the elite bureaucrats who have run Japan’s postwar economic policy. “There is a general acceptance that the sales tax has to be raised eventually. But people are only willing to trust a government with a proven track record of acting responsibly, and the DPJ haven’t done that yet,” Schulz said, referring to the Democratic Party by its acronym.

That’s key to avoid a Japanese debt crisis.

Reuters 7/14/10, " IMF urges tax increase to tackle Japan debt ", http://www.reuters.com/article/idUSNLLEIE69620100714)

WASHINGTON July 14 (Reuters) - The International Monetary Fund on Wednesday urged Japan to act soon to reduce its huge public debt using measures including a gradual increase in its consumption tax. In documents published alongside the IMF's annual review of Japan's economy, IMF staff said an adjustment of about 10 percent of gross domestic product over a decade was needed to stabilize and reduce government debt. The IMF said while such an adjustment could be achieved in a number of ways, raising the consumption tax should be a centerpiece of those efforts. It suggested that increasing the consumption tax to 15 percent starting in fiscal year 2011 could generate revenue of 4 to 5 percent of GDP. The IMF said the severe recession and large fiscal stimulus measures pushed Japan's public debt to 218 percent of GDP. Without a fiscal adjustment, public debt would rise and approach 250 percent of GDP by 2030, it added. With the proportion of debt to GDP reaching historical levels and one of the highest among rich nations, the IMF said fiscal consolidation was unavoidable in Japan. "While a part of the adjustment could come from the expiry of fiscal stimulus package and cyclical factors, given the limited space for further expenditure cuts, the rest of the adjustment would have to rely on additional revenue measures including increases in the consumption tax," the IMF said in a staff document. The IMF said it was concerned about how such a large adjustment with a tax hike would affect economic growth in the short run but noted it would pay off over the medium-term.

Japan Politics Aff Adv – Tax Reform Good – 1AC

Failure to rein in the Japanese debt crisis causes a global financial meltdown.

Michael Snyder, The Intelligence Daily, 5-5-10, “The Coming Economic Collapse Of Japan – And Why You Should Be Extremely Concerned About It” http://inteldaily.com/2010/05/japan-economic-collapse/

(The Intelligence Daily) — Most Americans pay very little attention to what is going on in the economies of other nations. But they should. The reality is that in today’s global economy, what is happening on the other side of the world can have a dramatic impact on the U.S. economy. In particular, the ongoing implosion of Japan’s economy should greatly concern us all. Japan is the 3rd biggest economy in the world and is one of America’s most important trading partners. If Japan experiences a total economic collapse it will create a tsunami of financial panic around the globe. In fact, it is likely that a default by the government of Japan would plunge the world into such an economic nightmare that the American Dream would quickly vanish for millions of American families. So just how close is Japan to a financial collapse? Well, Fitch Ratings says that Japan’s gross public debt has reached 201 percent of GDP and is likely to continue to pile up into very dangerous territory for the foreseeable future. It is estimated that this gigantic mountain of debt amounts to 7.5 million yen for every person living in Japan. Needless to say this is extremely troubling. Japan has the highest level of public debt to GDP of any of the industrialized nations. Japan is literally drowing in red ink. Meanwhile, even with all of the massive government spending that has caused all of this debt, Japan’s economy still continues to implode at a frightening pace. Japan’s discouraging battle with deflation dragged into its 13th straight month in March as prices continued to decline and the unemployment rate rose sharply. In fact, the number of unemployed in Japan totalled 3.5 million in March. This represented a 4.5 percent rise from the same period a year ago. In an attempt to combat this economic lethargy, the Japanese government has tried to spend its way into prosperity despite plummeting tax revenues and soaring welfare costs. But it isn’t working. So the government of Japan has found itself caught in a spiral of borrowing ever-increasing amounts of money. Hideo Kumano, the chief economist at Dai-ichi Life Research Institute, says that the only way that Japan can keep from going bankrupt is to keep borrowing more money…. “Japan’s revenue is roughly 37 trillion yen and debt is 44 trillion yen in fiscal 2010. Its debt to budget ratio is more than 50 percent.” In fact, according to Kumano, if the government of Japan did not keep borrowing massive amounts of money, it “would go bankrupt by 2011.” Fortunately, the financial implosion of Japan is not likely to happen that soon. Why? Well, for now they are able to borrow lots of money at very low rates. Up to this point, the government of Japan has been able to borrow money at ultra-low rates of around 1.30 percent for 10-year bonds, drawing on a huge savings pool from its own citizens. But that savings pool will not last indefinitely. So what happens when the government of Japan has to start paying much higher interest rates for the money it borrows? Well, when that happens things will get very messy for Japan very quickly. In fact, there are already signs that the Japanese government is quickly moving into the danger zone. In January, Standard & Poor’s warned that it might have to cut its rating on Japanese government bonds. We have all seen what happened when Standard & Poor’s cut its rating on Greek debt, and Japan’s economy is much, much larger. When a debt crisis does happen in Japan, it could happen very, very quickly. According to Kumano, there will likely come a “tipping point” when world markets will recognize that the government of Japan simply cannot afford to finance its debt any longer…. “It’s hard to predict when the bond market might collapse, but it would happen when the market judges that Japan’s ability to finance its debt is not sustainable anymore.” When you start to see world headlines about a debt crisis in Japan, hold on to your hats, because that could be the start of something really, really bad for the world economy.

Economic collapse causes World War III.

Walter Russell Mead, Henry A. Kissinger Senior Fellow in U.S. Foreign Policy at the Council on Foreign Relations, 1/22/2009, The New Republic, http://www.freerepublic.com/focus/news/2169866/posts

Bad economic times can breed wars. Europe was a pretty peaceful place in 1928, but the Depression poisoned German public opinion and helped bring Adolf Hitler to power. If the current crisis turns into a depression, what rough beasts might start slouching toward Moscow, Karachi, Beijing, or New Delhi to be born? The United States may not, yet, decline, but, if we can't get the world economy back on track, we may still have to fight.

Japan Politics Aff Adv – Tax Reform Good – Economy

Tax reform is key to Japan’s economy.

Takashi Nakamichi, Tomoyuki Tachikawa, WSJ (Wall Street Journal), 7/20/2010, "Japan Vows to Cap Budget at 71 Trillion Yen", http://online.wsj.com/article/SB10001424052748703724104575378391874158232.html?mod=googlenews_wsj

TOKYO—Japan's government pledged to cap its main spending for the next fiscal year at 71 trillion yen ($817 billion), the same as this year, in a rough budget outline approved Tuesday, as it begins the daunting task of curbing the nation's ballooning public debt. But the budget guidelines lacked concrete details and specific steps, leaving it unclear how the final budget will take shape. Among the goals laid out to achieve the budget cap was a call for Cabinet ministers to set spending priorities, reduce budgetary waste and channel money into areas related to the Democratic Party of Japan's growth strategy and campaign promises. After each ministry and agency decides on its budget, Prime Minister Naoto Kan should be allowed to make changes to the overall budget, the outline said. Because next fiscal year, which starts in April, marks the start of the DPJ-led government's fiscal overhaul, Japan's current budgetary framework is drawing greater attention than usual. The overhaul is aimed at balancing the government's main budget in 10 years, and it starts with keeping annual expenditure excluding debt-servicing costs—around three fourths of the national budget in the current fiscal year—at 71 trillion yen for the coming three years. Failure to live up to this promise in the first year could erode the credibility of the blueprints, adding to worries over the country's fiscal health. Japan's debt-to-gross domestic product ratio is the highest among industrialized nations at almost 200%. Although few expect the nation to experience a Greek-style debt crisis anytime soon, concerns over its fiscal health are growing world-wide. The International Monetary Fund recently urged Japan to start raising its consumption tax, now at 5%, beginning in the next fiscal year, even after the ruling Democratic Party of Japan suffered a major defeat in recent elections partly due to its calls for such tax increases.

Absent reform, Japan’s economy is doomed.

Kevin Rafferty, former managing director at the World Bank, editor in chief of PlainWords Media, a group of journalists specializing in economic development issues, 6/10/2010, “Can Kan Revive Japan?” Special Report for the Japan Times, http://search.japantimes.co.jp/cgi-bin/eo20100610a1.html

But even with these factors in Japan's favor, Kan is correct to worry. The rise in numbers is scary. The ministry of finance forecasts that Japan's central government debt could reach ¥973 trillion by the end of the current fiscal year.

Apart from conventional concerns such as government borrowing crowding out the private sector and the fear of reaching a tipping point when markets will declare they have had enough even of the Japanese government, the country is running up a heavy burden that future generations will not be able to bear. Damaging effects are already being seen, in household savings rates that have fallen below those of the U.S., and in huge unfunded pensions at big companies because of the low yields of government bonds and the falling stock market, less than 24 percent of its 1989 peak. Unfunded liabilities at Hitachi are ¥1.1 trillion and those at NTT are ¥576 billion, huge gaps and potential disappointments for workers expecting a comfortable retirement, who will then find that the state has no money to pay for their medical and pension bills. What should worry Kan most of all is the lack of any realistic debate on the wide socioeconomic implications of heavy debts, economic stagnation and an aging society. Indeed, Japan Inc. seems to be sleepwalking toward its inevitable doom. Economic reform, restructuring and deregulation are dirty words in the political lexicon. In terms of ideas, from schools to the big companies and the media, South Korea, India, and even China within strict political limits, are livelier than Japan

Japan Politics Aff Adv – Tax Reform Good – Economy

Weakening export markets mean only addressing the debt can resuscitate the Japanese economy – failure makes global economic collapse inevitable.

Alan P. Weiss, president of Regent Wealth Management Group 12/7/2009, New Haven Register “Japan’s deflation could have global ripple effect,” http://www.nhregister.com/articles/2009/12/27/business/f2-weiss27.txt

JAPAN has the second-largest economy in the world, and many countries including the U.S. and U.K. are inextricably linked to it. What happens there today will likely have long-term consequences for us. So how much should we worry about Japan’s current economic difficulties? Are they big enough and serious enough to merit the attention that the world media are showing? If Japan’s Finance Minister Hirohisa Fuji is to be believed, yes. He argues that the strength of the yen is creating serious problems for the export market — Japan’s economic engine — and threatening the nation’s recovery from the worst recession since the end of World War II. The situation, Fuji said, is “one sided” and harmful to the economy. If unchecked, he fears some of the largest global creditors will succumb to a dangerous spiral of deflation, falling prices and ever cheaper imports and raw materials. Japan’s deflation rate during October seemed to pass almost unnoticed at — 2.5 percent — the worst deflation in Japanese history. The new government of Yukio Hatoyama has been driven to acknowledge that all is not well. What the Hatoyama administration does not appear willing to do is tackle this renewed specter of deflation head-on. The hesitation could prove catastrophic for Japan and for global recovery in general. Prices are, to be fair, not yet completely out of control. However, if the Bank of Japan is right and the trend continues for a few more years, the situation could easily become unmanageable. What makes this particularly concerning is that circumstances today are very different than those Japan faced between 2001 and 2006. Then the world economy was thriving, and Japan’s powerful export industry was able to kick-start the economy. Today, world economies are significantly weaker, and the yen is among the world’s stronger currencies. On the slightly positive side, unemployment figures are down for the first time in months. A great many commentators maintain, however, that the risk of deflation is too great to ignore and that if something isn’t done to reduce the growing pressure on exporters such as Sony, Toyota and Honda, the employment progress may be little more than a blip. The Bank of Japan now has the opportunity to lead from the front and to at least consider initiatives such as increasing government-bond purchases and setting new monetary targets. Japan is in an unenviable position since almost every course of action would likely weaken the yen. Internally this would create all sorts of headaches for the Hatoyama administration, and governance would be even trickier than usual. Internationally the ramifications would be just as prickly — particularly when it comes to Japan’s trading partners. Still, the current wait-and-see policy cannot continue, and action of some sort must inevitably occur. Japan’s debt situation is indeed grim. According to statisticians, Japan’s rate of debt growth compared with GDP should reach 218 percent this year, 227 percent next year and 246 percent in five years. Japan’s future prosperity rests on the decisions it will make in the coming months. Not all the decisions will be welcomed, at least in the short term, but there is a growing call for the government to do more than observe. The risk of deflation must be challenged and beaten if Japan is to reverse the slide in its future growth. The question the Bank of Japan and Yukio Hatoyama’s administration must consider is whether a weaker yen today is a price worth paying for a stronger and healthier economy tomorrow.

Japan Politics Aff Adv – Tax Refrom Good – Economy

Tax reform is key to Japan’s economy – failure makes a debt crisis inevitable and jacks growth.

Tomoyuki Tachikawa, WSJ (Wall Street Journal), 6/18/2010, Dow Jones Newswires, “Correct: Japan Govt Aims For Growth Through Investments, Tax Cuts” http://online.wsj.com/article/BT-CO-20100618-703746.html?mod=WSJ_latestheadlines

Prime Minister Naoto Kan's Cabinet approved a 113-page mid- to long-term economic growth strategy that targets the creation of almost 5 million jobs in the environment, health care and tourism by 2020. The plan aims to lower the unemployment rate to below 4% as quickly as possible from about 5% currently. As a first step to generate more demand, the strategy calls for an end to persistent consumer-price falls from the fiscal year starting April 2011. It calls on the Bank of Japan to make "every effort" to accomplish that. The plan also says the yen shouldn't rise excessively as that could hurt export performance. The plan proposes gradually cutting the nation's 40% effective corporate tax rate to 25%, in line with other major counties, to make domestic companies more competitive internationally and attract foreign firms to do business in Japan. The new administration's growth strategy aims at ending the stagnation that has hobbled the world's second largest economy over much of the past two decades. Prices have been falling as consumers, worried about the economic outlook and job security, have tended to save rather than spend. At the same time, leading domestic industries such as electronics manufacturers have faced increasing competition from Asian neighbors such as South Korea and China. The government wants to turn the country's economic fortunes around by banishing deflation and encouraging the growth of new industries. It won't be easy. The government's ability to make new investments to spur growth is limited by its huge debt, the largest in the industrialized world and nearly twice the size of annual growth domestic product. Japan also has found it hard to overcome deflation, which has pecked at the economy for over a decade. Consumer prices have fallen for 14 straight months. The Kan administration targets average GDP growth exceeding 2% on an inflation-adjusted basis, and 3% on a nominal basis over the next 10 years. But those are ambitious goals for an economy that in recent years has ranged between growth of 2% and contractions of as much as 3%. The government's targets could be difficult to realize because deflationary pressure may persist as the population declines, said Mizuho Research Institute economist Hirokata Kusaba. A shrinking population could lead to a shortage of demand, driving prices downward. "As the Japanese economy is recovering at a gradual pace, in part helped by downturns in past years, the plan is a bit aggressive," Kusaba said. To pump up the economy, the plan says policy makers should focus on seven major areas expected to stimulate growth: the environment; health care; trade and business with other Asian countries; tourism and revitalization of regional economies; science and technology; job training and employment opportunities for groups such as the newly retired; and improvement of financial circumstances. The environment and health care are seen as particularly promising. By putting Japan's technological expertise toward environmental innovation, the government hopes to create 1.4 million new jobs. And as the country's population ages, health care is expected to become an even bigger industry that could create 2.84 million new jobs, according to the government's strategy. The two areas are each expected to produce Y50 trillion in new demand. The new strategy also envisions 560,000 new jobs and Y11 trillion in new demand from increased tourism, and 190,000 jobs and Y12 trillion in new demand from rising business ties with Asia. It wants Japan to become an Asian hub for global business. To help achieve this, it will take steps such as giving corporate tax breaks to foreign firms, streamlining immigration and subsidizing large-scale investments. The government says it will consider the details of such steps and start implementing them from fiscal 2011. The government will also establish a "comprehensive exchange" that deals broadly with securities and commodities to boost overseas investment by facilitating foreign investments in financial products. The administration's growth strategy is broadly in line with the policy direction the previous administration of Yukio Hatoyama, which also called for growth in environment, health care and Asia-related businesses. But calls for a corporate tax cut and a quick end to deflation--which could put pressure on the central bank to ease monetary policy further--are new. Kan took over as Japan's prime minister after Hatoyama resigned earlier this month. "My thinking is, no reform no growth," said Hiromichi Shirakawa, chief economist at Credit Suisse. "The bottom line is, unless we put an end to deflation, nobody wants to borrow money and the economy cannot revive."

Japan Politics Aff Adv – Tax Reform Good – Economy

Japan’s debt is unsustainable – tax reform is key to its economy.

International Business Times, 7/14/2010, “IMF calls on Japan to increase sales tax as first step to address huge public debt” http://www.ibtimes.com/articles/35643/20100715/japan-imf-sales-tax-consumption-naoto-kan-public-debt-fiscal-policy-dpj-europe-debt-crisis-surplus-c.htm?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+ibtimes%2Ftech+%28IBT imes.com+RSS+Feed+-+Technology%29

The International Monetary Fund (IMF) urged the Japanese government on Wednesday to continue its policy of curtailing Japan's ballooning debt by finally imposing the controversial consumption tax hike as it stressed that fiscal reforms policy should ideally commence next year with the sales levy setting its footprint on the economy in a gradual pace.

The IMF also emphasised that such measures must be supported by deliberate efforts to reduce the structural primary deficit over the next decade as the institution reacted to Tokyo's apparent backpedalling on its fiscal reforms commitments in view of the electoral rout suffered last Sunday by Prime Minister Naoto Kan's party, the Democratic Party of Japan.

Prevalent public sentiments published by local newspapers showed that most Japanese gravitate towards a debate on raising the sales tax to buttress the country's public coffers, possibly replenishing the national treasury in order to address a public debt that has reached a point twice the size of the economy. In its annual report and following careful consultations with Tokyo, the IMF said that the spillover effect of the European debt crisis further heightened the uncertainty and downside risks on Japan's economic outlook, consequently underscoring the attention begged for by the country's massive debt woes. The IMF said that dealing with Japan's public debt, which is one the world's most advanced economies, would constitute "a large and protracted adjustment that will be made more credible by an early increase in the consumption tax."

Japan Politics Aff Adv – Okinawa Withdrawal Key to Japanese Diplomacy

Controversy over Okinawa blocks Japan’s diplomatic agenda – only the plan solves.

The Nikkei Weekly, 05/24/2010, “Futenma tying down government”, Lexis-Nexis

Prime Minister Yukio Hatoyama has admitted that his government will be unable to meet his self-imposed, end-of-May deadline to settle on a relocation site for U.S. Marine Corps Air Station Futenma, in Okinawa Prefecture. For months, Hatoyama had been repeating a pledge to settle the issue by the end of May. At one point, he even staked his job on his ability to do so. Now it appears his words were empty. On the morning of May 13, Hatoyama told the press that he "will still do everything I can" to settle the issue by the deadline. Few people, though, expect him to pull a rabbit out of the hat. At any rate, Japan and the U.S. are planning to announce a new relocation agreement on May 28, three days ahead of Hatoyama's self-imposed deadline. But the agreement will not be final, and most likely details, such as how to build a replacement facility, will be left for future negotiations. Political football While campaigning for last summer's lower house election, which swept the Democratic Party of Japan to power, Hatoyama pledged to move the helicopter base out of Okinawa Prefecture, if not out of Japan altogether, stirring the hopes of Okinawans. Nearly a year later, it remains unclear where Hatoyama thought the facility should be moved. For Hatoyama - who belatedly recognized the importance of the deterrent role that the U.S. Marines' presence in Okinawa plays - moving the base outside the prefecture is no longer an option. The prime minister has floated the idea of building an offshore jetty that would serve as a landing area for helicopters. He hopes the proposed solution would allow him to claim he had fulfilled his pledge to lessen Okinawans' burden of hosting so many U.S. military bases. But it will be difficult to turn the idea into reality. At a working-level meeting of Japanese and U.S. officials in Washington, D.C., on May 12, the American side was cool to the plan, saying the idea had already been considered and rejected over concerns that the design could impede the functions of the base, or that the offshore landing pad might not be solid enough. Washington's request that Japan provide data demonstrating the plan's feasibility amounted to a rejection, Japanese experts say. Meanwhile, that deterrent role Hatoyama recently began to understand is gaining widespread attention. In March, a South Korean naval patrol ship sunk, perhaps, as it turns out, not so mysteriously. Last week, evidence emerged that it was torpedoed by North Korean forces. At the very least, deterrence has become a political football. A U.S. official recently remarked that Japan's attitude might change if North Korea fired a missile at it. The comment shows that Japan-U.S. tensions are rising to the point where they threaten the bilateral alliance. Diplomatic quicksand Equally worrying, the Futenma mess is hampering Japan's economic diplomacy. Last summer's DPJ election manifesto said a DPJ government would push for free-trade agreements with other Asia-Pacific nations, including the U.S. Although FTA talks with South Korea have begun, they are making little progress. As for the launch of talks with the U.S., a senior official with the Ministry of Economy, Trade and Industry said flatly: "This is not the time for that." He cited the Futenma impasse. Ministers that deal with FTAs - including Foreign Minister Katsuya Okada, Agriculture, Forestry and Fisheries Minister Hirotaka Akamatsu and Finance Minister Naoto Kan - have met several times since autumn to discuss the negotiations with South Korea and other nations. But government officials lament the lack of movement. "The discussions have produced a great deal of noise," one said, "but no concrete strategy has yet been worked out." The DPJ manifesto also promised cooperation with other nations in the Asia-Pacific on trade, finance and energy, but no specific steps have been taken so far. The U.S.-Japan rift and Japan's inability to move forward on economic diplomacy are casting a deep shadow over the country's relations with other Asian nations, which Hatoyama tried to make a centerpiece of his foreign policy. One official from a major Asian country has derided Hatoyama's proposed East Asian community, saying the prime minister is perhaps too genteel to understand certain realities. Hatoyama is scrambling to flesh out his East Asian community plan, but officials in charge of the matter say the proposals are unlikely to amount to more than a repackaging of existing programs, such as personnel exchanges and cooperation in disaster prevention. All of which puts the Hatoyama government in diplomatic quicksand. The deadlock over Futenma is not only undermining the Japan-U.S. alliance, it is also hampering Japan's broader diplomatic agenda. The only way out of the mud is for the government to reaffirm the importance of the bilateral alliance and clarify its entire national security policy.

South Korea Politics – Economic Reform – 1NC

Lee’s gaining political momentum for economic reforms now.

Jack Kim, Reuters, 7/1/2010, Forexyard, http://www.forexyard.com/en/news/Key-political-risks-to-watch-in-South-Korea-2010-07-01T072212Z-FACTBOX

After suffering a collapse in popularity upon taking office just over two years ago, President Lee Myung-bak has seen a surge in his support as South Korea's economy emerges from the global downturn more quickly than other major economies. The government has upgraded its 2010 job creation target to 300,000, and the finance ministry recently raised its GDP growth forecast for 2010 by 80 basis points to 5.8 percent. But Lee's plans for job creation and his business-friendly reform agenda have been blocked for months in parliament due to a row over plans to move some ministries to a new administrative capital. Lee sought to overturn the move, which had been proposed by his predecessor, saying it was an example of pork barrel politics and a waste of taxpayers' money. The row virtually paralysed the legislature for months. But in June, Lee allowed the assembly to vote on the issue. His attempt to halt the capital move was thrown out, thanks to a large party faction led by the popular daughter of an assassinated former president which has sided with the opposition on the issue. But with the issue that had stifled the legislative agenda for 9 months settled for now, parliament can finally move ahead with debating Lee's reform plans. What to watch: -- Has parliamentary deadlock been broken? June's vote should open the way for parliament to get on with a legislative agenda that includes Lee's proposed economic reforms, tax cuts and a trade deal with the United States. -- Labour laws and policies. A key indicator of Lee's political clout can be seen in his ability to push through his plans on job creation and adding greater flexibility into what is regarded as a rigid labour market. -- Lee's ruling Grand National Party holds a national convention from July 14 to pick a new leader. His political rival Park Geun-hye, a leading candidate to succeed him as president, is not expected to run, an indication that she plans to focus on working for the party's nomination for president. No clear frontrunner has emerged to take control of the party, but Lee will want to see a veteran from his faction step up to take the job and drive his reform bills through parliament.

Withdrawal of the US military presence is massively unpopular – it prevents economic reform.

Cheoleon Lee, Senior Research Director, The Gallup Organization, 9/22/2006, Gallup, http://www.gallup.com/poll/24679/gallup-world-poll-south-koreas-political-dilemma.aspx

Over the last five decades, the presence of U.S. troops in South Korea has been perceived as a "security blanket" for South Korea against the threats from the communist North. Indeed, the military alliance with the U.S. has provided South Korea the stability and security needed for the country to focus on economic development. Now, with the U.S. military stretched thin by the occupation of Iraq, the redeployment and reduction of U.S. troops in Korea is inevitable. According to recent Gallup World Poll data, only about 26% of South Koreans say the U.S. should withdraw from Korea as soon as possible, while 71% say that U.S. troops should remain. For conservative South Koreans, any reduction in U.S. military presence in the Korean peninsula may pose a potential security vacuum, while others, especially more liberal younger generations, may perceive it as a step toward self-reliance. This generational difference is a notable finding: 56% of people between the ages of 15 and 19 are in favor of withdrawal of U.S. troops, while more than 80% of people aged 50 and older are opposed to the idea. When asked if South Korea can handle its national defense and security on its own, 27% of South Koreans said they can be on their own even if the U.S. withdraws. On the other hand, 66% said U.S. withdrawal would greatly impact the stability of the Northeast Asian region. Clearly, the vast majority of South Koreans still perceive that the presence of U.S. troops in Korea is vital for its own national defense as well as for the security of the Northeast Asian region. Nevertheless, most South Koreans tend to believe firmly that the tougher approaches maintained by the Bush administration are not the solutions for North Korean nuclear issues.

South Korea Politics – Economic Reform – 1NC

Economic reforms are key to South Korea’s economy.

Bruce Klingner, Senior Research Fellow for Northeast Asia at The Heritage Foundation's Asian Studies Center, & Anthony B. Kim, Policy Analyst in Heritage's Center for International Trade and Economics (CITE), 12/7/2007, http://www.heritage.org/Research/Reports/2007/12/Executive-Summary-Economic-Lethargy-South-Korea-Needs-a-Second-Wave-of-Reforms

The economy of South Korea, Asia's third-larg­est economic power, shows favorable but conflict­ing indicators. Current performance reflects a strengthening recovery, but inconsistent eco­nomic policies, lingering systemic deficiencies, and increasingly competitive rivals create signifi­cant long-term challenges. South Korea has made significant strides since the 1997 Asian financial crisis forced it to open its markets and implement sweeping market-ori­ented reforms, but failure to implement necessary follow-on reform measures could undermine long-term competitiveness. The five years of the Roh Moo-hyun administration were marked by uneven economic policies, conflicting signals from senior officials, and rising public animosity toward overseas companies, all of which hindered domestic and foreign investment. To avoid economic stagnation, South Korea must revitalize and strengthen its reform efforts. Restrictive governmental policies and unfavorable labor conditions are sapping economic strength. Moreover, while South Korea's reform efforts are stalled, those of its economic rivals are not. With­out a second wave of economic reforms, investors increasingly will bypass South Korea for more prof­itable markets.

South Korea Politics – Economic Reform – 1NC

South Korea’s economy is key to the global economy.

Dr. Manzur Ejaz, Ph.D. in Economics from Howard University, Professor at Punjab University, writer for Daily Times and BBC, 1/5/1998, “Pakistan can learn from South Korea's economic woes,” http://users.erols.com/ziqbal/jan_5.htm

After dragging their feet for weeks, US, Japan and other industrial nations led by the IMF have decided to pump another $10 billion into the South Korean economy. The major economic players in the globalized world were scared by the impact of the imminent possibility of breakdown of the South Korean: it could lead to a worldwide recession/depression and the situation may get out-of-hand quickly. The South Korean example shows that if the economy is of a significant size--South Koreans have the tenth largest economy in the world--and globalized, the economic superpowers and the IMF can go to any extent to rescue it. Otherwise, in cases like Pakistan, the major players don't do much other than issue soothing statements or throwing in meager amounts. Japan's economy has been in a lot of trouble for many years and the South Korean economic collapse can further deteriorate the situation: many Japanese financial institutions have become insolvent. The US economy is at its best for now but it can easily tailspin. The IMF has already warned that the present pace of the US economic growth is unsustainable and if proper measures are not taken, it can get into very serious trouble. Therefore, the US and Japan are acting to rescue the South Korean economy, primarily due to self their interests and only partly because of any benevolent reason. Following are the major considerations behind the rescue plan:

--The East Asian currencies in general and South Korean in particular have lost about half of their value in the last few months. This means that their exported goods will become much cheaper and the goods produced in Japan and other industrialized countries will not be able to compete with them. Consequently, several production units in the industrialized countries will cease to produce, leading to layoffs and, hence, recession. Therefore, to prop up the battered currencies of South Korea and other East Asian countries is vital for the survival of the industrialized world.

--The collapse of South Korean and other East Asian economies will eliminate their ability to import goods from abroad. At present, the US produces high-value goods like machinery, airplanes and defense weapons etc. East Asia, having the sizeable economies and high per capita income, is one of the major markets for the US. If US exports suffer, not only its balance of trade will tilt against it--having serious economic implications-- but also its production will suffer giving rise to recession. Of course, US would like to avert such eventuality at any cost.

--South Korea owes more than $160 billion to the foreign banks. If it defaults on its payments and goes bankrupt, many banks in Japan, US and other western nations will get into a serious crunch: many may burst. Although, it is claimed that US banks have not a major exposure in this situation but active maneuvering by the six US largest banks to get this package approved shows that the world banking system has very high stakes in this crisis.

--US government officials are anxious to forestall a South Korean default because they fear it would cause a further loss of confidence in other emerging market economies, conceivably leading to worldwide recession. Further, US multinational corporations are major players in the world economy and a deterioration of the emerging markets can lower their profits triggering a downward spiral of the US stock and bond markets. East Asian crisis has already started showing its negative impact on the Wall Street: US stocks market has already lost about 8% to 10% of its value in the last few months.

Economic collapse causes World War III.

Walter Russell Mead, Henry A. Kissinger Senior Fellow in U.S. Foreign Policy at the Council on Foreign Relations, 1/22/2009, The New Republic, http://www.freerepublic.com/focus/news/2169866/posts

None of which means that we can just sit back and enjoy the recession. History may suggest that financial crises actually help capitalist great powers maintain their leads--but it has other, less reassuring messages as well. If financial crises have been a normal part of life during the 300-year rise of the liberal capitalist system under the Anglophone powers, so has war. The wars of the League of Augsburg and the Spanish Succession; the Seven Years War; the American Revolution; the Napoleonic Wars; the two World Wars; the cold war: The list of wars is almost as long as the list of financial crises. Bad economic times can breed wars. Europe was a pretty peaceful place in 1928, but the Depression poisoned German public opinion and helped bring Adolf Hitler to power. If the current crisis turns into a depression, what rough beasts might start slouching toward Moscow, Karachi, Beijing, or New Delhi to be born? The United States may not, yet, decline, but, if we can't get the world economy back on track, we may still have to fight.

South Korea Politics – KORUS FTA – 1NC

US-South Korean security cooperation enables Lee to renegotiate KORUS now, clearing the way for passage in both countries.

Ian Bremmer, president of Eurasia Group, former national fellow at the Hoover Institution, PhD in political science from Stanford University, 7/7/2010, Foreign Policy, http://eurasia.foreignpolicy.com/category/region/north_america

The Korea-US free trade agreement (KORUS) was completed in 2007, but congressional Democrats, under pressure from labor unions, have refused to vote on ratification. They charge that, among other problems, the deal would allow South Korea to continue blocking entry to American automobiles and beef. Obama said he wants renegotiations to be completed before he visits Seoul for the next G-20 gathering in November and that he intends to submit the deal to Congress for a vote after the mid-term elections. This is Obama's first explicit public commitment to push on a specific trade deal with a clear timeline for passage. America's 9.5 percent unemployment rate and a very challenging election season might make this a surprising time to try to move forward. But political and security developments in East Asia help explain the timing. China's recent announcement that it will allow some upward movement in the value of its currency has not appeased critics in Congress, and U.S.-China trade frictions will continue. More importantly, the crisis created when North Korea sank a South Korean naval vessel has sharply increased tensions in the region. These developments provide good reason for the United States and South Korea to move closer together. In Toronto, Obama went so far as to describe South Korea as "the lynchpin" of American policy in Asia -- a comment that raised a few eyebrows in Tokyo. The South Koreans passed this deal long ago and have refused to reopen it to address congressional complaints. But anxiety over what's happening in North Korea will make it easier for South Korean President Lee Myung-bak to argue for compromise and better relations with the United States. The Obama administration assumption is that passage will become easier after the midterms have passed as enough pro-trade Democrats join Republicans to close the deal.

Withdrawing the US presence destroys that cooperation – it’s perceived as ending the US security commitment.

Patrick Flood, former U.S. Foreign Service Officer, Ph.D. in political science from the University of Massachusetts Amherst, 7/12/2010, http://www.centermovement.org/topics-issues/foreign-policy/korea-china-and-the-us-an-alternative-view/

Withdrawing our forces offshore and offering instead assurances of future help would be a clear statement that our security commitment to South Korea is no longer what it was, despite our alliance. One cannot effectively defend an ally against a massive land invasion solely with ships and remote airbases. And we tried partial withdrawal a few years ago: in an effort to defuse tensions and after consultation with South Korea, we reduced troop strength by 25% and repositioned our forces within the country. This move has obviously not helped to moderate the North’s policies. And, as noted above, by staying in Korea we reassure not only South Korea but also our other allies in Asia that we will keep our commitments.

South Korea Politics – KORUS FTA – 1NC

The FTA is key to South Korea’s economy.

William H. Cooper, Specialist in international trade and finance, Congressional Research Service, in conjunction with Mark E. Manion, Remy Jurenas, and Michaela D. Platzer, 6/17/2009, The Proposed U.S.-South Korea Free Trade Agreement (KORUS FTA): Provisions and Implications, pg 42

For South Korea, entering an FTA with the United States meshes with a number of Lee’s economic and strategic goals. Ongoing competitive pressure from Japanese firms, increased competition from Chinese enterprises, and the rapid aging of the South Korean workforce has heightened the sense of urgency to boost national long-term competitiveness, particularly in the services industries, where South Korean productivity typically lags compared to other industrialized countries. Indeed, former President Roh and other South Korean officials have argued that the KORUS FTA is essential for South Korea’s economic survival.154 Similarly, if less grandiosely, President Lee has argued that passage of the KORUS FTA will help revitalize South Korea’s economy. To accelerate Korea’s reform efforts—and also to avoid being left out from other FTAs being created globally and in Asia—Presidents Roh and Lee have pursued an aggressive effort to negotiate FTAs. South Korea has entered into FTAs with Chile, Singapore, the European Free Trade Association (EFTA), the Association of Southeast Asian Nations (ASEAN), has nearly completed negotiations with the European Union, and is negotiating with other countries, including India, and Australia.155

South Korea Politics – KORUS FTA – 1NC

South Korea’s economy is key to the global economy.

Dr. Manzur Ejaz, Ph.D. in Economics from Howard University, Professor at Punjab University, writer for Daily Times and BBC, 1/5/1998, “Pakistan can learn from South Korea's economic woes,” http://users.erols.com/ziqbal/jan_5.htm

After dragging their feet for weeks, US, Japan and other industrial nations led by the IMF have decided to pump another $10 billion into the South Korean economy. The major economic players in the globalized world were scared by the impact of the imminent possibility of breakdown of the South Korean: it could lead to a worldwide recession/depression and the situation may get out-of-hand quickly. The South Korean example shows that if the economy is of a significant size--South Koreans have the tenth largest economy in the world--and globalized, the economic superpowers and the IMF can go to any extent to rescue it. Otherwise, in cases like Pakistan, the major players don't do much other than issue soothing statements or throwing in meager amounts. Japan's economy has been in a lot of trouble for many years and the South Korean economic collapse can further deteriorate the situation: many Japanese financial institutions have become insolvent. The US economy is at its best for now but it can easily tailspin. The IMF has already warned that the present pace of the US economic growth is unsustainable and if proper measures are not taken, it can get into very serious trouble. Therefore, the US and Japan are acting to rescue the South Korean economy, primarily due to self their interests and only partly because of any benevolent reason. Following are the major considerations behind the rescue plan:

--The East Asian currencies in general and South Korean in particular have lost about half of their value in the last few months. This means that their exported goods will become much cheaper and the goods produced in Japan and other industrialized countries will not be able to compete with them. Consequently, several production units in the industrialized countries will cease to produce, leading to layoffs and, hence, recession. Therefore, to prop up the battered currencies of South Korea and other East Asian countries is vital for the survival of the industrialized world.

--The collapse of South Korean and other East Asian economies will eliminate their ability to import goods from abroad. At present, the US produces high-value goods like machinery, airplanes and defense weapons etc. East Asia, having the sizeable economies and high per capita income, is one of the major markets for the US. If US exports suffer, not only its balance of trade will tilt against it--having serious economic implications-- but also its production will suffer giving rise to recession. Of course, US would like to avert such eventuality at any cost.

--South Korea owes more than $160 billion to the foreign banks. If it defaults on its payments and goes bankrupt, many banks in Japan, US and other western nations will get into a serious crunch: many may burst. Although, it is claimed that US banks have not a major exposure in this situation but active maneuvering by the six US largest banks to get this package approved shows that the world banking system has very high stakes in this crisis.

--US government officials are anxious to forestall a South Korean default because they fear it would cause a further loss of confidence in other emerging market economies, conceivably leading to worldwide recession. Further, US multinational corporations are major players in the world economy and a deterioration of the emerging markets can lower their profits triggering a downward spiral of the US stock and bond markets. East Asian crisis has already started showing its negative impact on the Wall Street: US stocks market has already lost about 8% to 10% of its value in the last few months.

Economic collapse causes World War III.

Walter Russell Mead, Henry A. Kissinger Senior Fellow in U.S. Foreign Policy at the Council on Foreign Relations, 1/22/2009, The New Republic, http://www.freerepublic.com/focus/news/2169866/posts

None of which means that we can just sit back and enjoy the recession. History may suggest that financial crises actually help capitalist great powers maintain their leads--but it has other, less reassuring messages as well. If financial crises have been a normal part of life during the 300-year rise of the liberal capitalist system under the Anglophone powers, so has war. The wars of the League of Augsburg and the Spanish Succession; the Seven Years War; the American Revolution; the Napoleonic Wars; the two World Wars; the cold war: The list of wars is almost as long as the list of financial crises. Bad economic times can breed wars. Europe was a pretty peaceful place in 1928, but the Depression poisoned German public opinion and helped bring Adolf Hitler to power. If the current crisis turns into a depression, what rough beasts might start slouching toward Moscow, Karachi, Beijing, or New Delhi to be born? The United States may not, yet, decline, but, if we can't get the world economy back on track, we may still have to fight.

Uniqueness – Economic Reform – Lee’s Pushing

Job creation is Lee’s top priority.

Lee Hyo-sik, Korea Times, 7/5/2010, http://www.koreatimes.co.kr/www/news/nation/2010/07/113_68837.html

The Korean economy has recovered fast from the worldwide economic crisis over the past year, thanks largely to robust exports by Samsung Electronics and other large corporations. But businesses have remained reluctant to hire new workers amid continued economic uncertainty, worsening the labor market to the level unseen since the 1997-98 Asian financial market meltdown. Against this backdrop, the Lee Myung-bak Administration has been promoting job creation as its main concern, trying to generate more positions for those in their 20s and 30s.

Lee’s pushing job creation.

Lee Hyo-sik, Korea Times, 7/15/2010, http://www.koreatimes.co.kr/www/news/nation/2010/07/117_69467.html

The development of the domestic tourism industry has been pushed for by the Lee Myung-bak administration, with tens of thousands of Koreans heading overseas and spending billions of dollars each year on various leisure activities. To create jobs, spur growth and better protect the export-dependent economy from outside shocks, the government has introduced a series of policy measures to boost the local tourism sector.

Lee’s put job creation at the top of the agenda.

Seyoon Kim and Cesilia Han, BusinessWeek, 2/9/2010, http://www.businessweek.com/news/2010-02-09/bank-of-korea-under-political-pressure-may-hold-rate-at-2-.html

President Lee Myung Bak has put jobs at the top of the political agenda and predicted the economy will expand 5 percent this year as he prepares for regional elections in May. Finance Minister Yoon Jeung Hyun said this week that it would be “premature” for the bank to increase borrowing costs, and sent a vice minister to last month’s policy-rate meeting, breaking a decade-long practice of excluding political representatives.

Lee’s pushing economic reforms – his strategy is key to South Korean growth.

Michael Freedman, Asia Editor Newsweek International, 07/2010, “The CEO in charge of South Korea”, Newsweek International

It's a common strategy of smart multinationals: invest heavily in new markets and products during a recession while competitors retrench. But South Korea may be the first country to pull it off, a coup probably made possible by the fact that it has a real CEO in charge. Lee Myung-bak once ran Hyundai, one of South Korea's largest companies, where he invested aggressively in opening new markets abroad, even through the recession in the early 1980s. Now, as president, he has pushed a similarly aggressive long-term view, which helped South Korea weather the global downturn perhaps better than any other developed nation. In January 2009, Lee urged South Korean companies to keep investing, reminding them in the depths of the recession that crises always end. He put the government's money where its mouth was, promising to increase public R&D spending from 3.37 percent of GDP in 2007--already among the world's highest--to 5 percent. He now plans to expand tax deductions for business investments in R&D. As a result, South Korea's GDP growth hit 3.2 percent by the third quarter of 2009, making it the first wealthy country to emerge from the dumps. Morgan Stanley says Korean exporters of phones, LCD televisions, and cars even picked up market share. But no, Lee is not in line for a performance bonus.

Uniqueness – Economic Reform – Will Pass

Recent appointments clear the way for Lee’s economic reform.

JoongAngDaily, Korean news paper, 7/14 2010, “Tax chief named Lee’s policy czar President fills secretariat with seasoned solons”, http://joongangdaily.joins.com/article/view.asp?aid=2923170

In a reshuffle aimed at enhancing the efficiency of his administration and improving ties with political rivals, President Lee Myung-bak named Baek Yong-ho, head of the National Tax Service, as Blue House chief policy director and Grand National Representative Chung Jin-suk as senior presidential secretary for political affairs. For the newly created post of senior secretary for social integration, Lee named Park In-joo, head of the National Institute for Lifelong Education. Kim Hee-jung, a former GNP lawmaker and current head of the Korea Internet and Security Agency, was named as Lee’s spokeswoman. Stung by his governing party’s crushing defeat in local elections last month, Lee had pledged to review policy priorities and revamp his secretariat and cabinet. A generational change of key aides was also promised to improve the administration’s image with younger Koreans. Last week, Lee appointed labor minister and three-term GNP lawmaker Yim Tae-hee as his new chief of staff. With Baek’s appointment yesterday, Lee completed the appointment of the two top posts of his secretariat. By appointing two lawmakers - Yim and Chung - for the key posts, Lee also made clear his intention to seek cooperation with the National Assembly to push forward the rest of his agenda for the second half of his term. “Baek has an excellent understanding of the president’s philosophy and is expected to assist Lee greatly with his passionate and meticulous performance,” the Blue House said in a press release, calling the 54-year-old former professor, “a reform-minded economist” with “a soft leadership style and strong, decisive power.” A member of Lee’s transition team when he took office, Baek served as the chief of the Fair Trade Commission from March 2008 until June 2009. In July of last year, Lee appointed Baek as head of the embattled National Tax Service after its three previous heads were either jailed or stepped down over corruption scandals. After completing a doctoral degree in economics at the State University of New York, Baek served as a professor at Ewha Womans University. A native of South Chungcheong, Baek also graduated from high school in North Jeolla, adding a regional balance in the secretariat. Lee’s determination to end factional fights inside the ruling GNP that have hobbled the administration’s agenda, as well as to reconcile with the Chungcheong region in the aftermath of the Sejong City controversy, was evident in his decision to name Chung as senior secretary for political affairs. The three-term lawmaker with strong ties to Chungcheong is a well-known advocate of Lee’s political rival Park Geun-hye. The 50-year-old lawmaker graduated from Korea University and worked as a journalist for Hankook Ilbo. His political career began in 2000 when he was elected a lawmaker from the Chungcheong-based political party United Liberal Democrats and served as the party’s spokesman. He was re-elected in a by-election in 2005. After joining the Grand National Party in 2007, Chung began his third term as a lawmaker in 2008, when he was elected as a proportional representative. A native of Gongju, South Chungcheong, Chung opposed Lee’s plan to revise the Sejong City development. He also maintains close ties with the conservative minority Liberty Forward Party, whose stronghold is the Chungcheong region and which enjoys a position as the deciding voting bloc in the legislature. “We expect him to improve communication among the government, Blue House, and ruling and opposition parties and play a role as a bridge to maintain smooth relationships,” the Blue House said. Chung’s appointment also shows Lee’s intention to reconcile with his rival Park. Although he is not identified as a pro-Park faction member, he maintains an amicable relationship with Park loyalists. In private meetings with other politicians, Chung has openly backed Park as the next presidential hopeful. Chung is also on good terms with reformist lawmakers inside the Grand National Party, as well as die-hard members of the pro-Lee faction. While two officials in their 50s from South Chungcheong were appointed to the key posts, Lee made a more conservative choice for the newly created post of senior secretary for social integration by appointing 60-year-old civic activist Park. “Park served in many civic groups for a long time, proving to have a flexible thinking beyond ideology and wealth,” the Blue House said. “He was recommended highly by religious and civic groups and has the ability to speak critically to the president when necessary.”

Uniqueness – KORUS FTA – Will Pass

Push for increased US-South Korea cooperation means the FTA will be renegotiated and will pass.

Reuters, 7/14/2010, http://www.reuters.com/article/idUSN1416545020100714

South Korea is ready to consider "creative" solutions to open its market to more U.S. beef and auto imports to help win U.S. approval of a bilateral free trade agreement, South Korea's ambassador to the United States said on Wednesday. Ambassador Han Duk-soo also said he was confident the two countries would resolve the troublesome issues by a November deadline set last month by U.S. President Barack Obama and South Korean President Lee Myung-bak. "Just rest assured we will finish in accordance with the timeline set by President Obama and President Lee," Han said at an event with members of Congress and industry officials to push for approval of the deal. South Korea is prepared to plunge headlong into the talks with the United States to come up with "creative and mutually acceptable solutions," Han said. Also at the event, The Emergency Committee on American Trade, a U.S. business group, released a letter to Obama urging passage of the Korea pact and other deals with Colombia and Panama. The letter was signed by top executives from Microsoft (MSFT.O), General Electric (GE.N), Coca-Cola (KO.N), Intel (INTC.O), Caterpillar (CAT.N), Wal-Mart (WMT.N) and six other U.S. companies. The United States signed the free trade agreement with its long-time ally three years ago, but it has not been ratified by Congress. The two presidents' pledge to finally enact the pact follows the sinking of a South Korean warship in March, which has been blamed on North Korea and reinforced the need for strong ties between Washington and Seoul.

The FTA’s gaining momentum for passage.

NYT, Elizabeth Williamson, Reporter N.Y. Times, 6/25/2010, New York Times, “U.S. Vows New in Korean Trade Pact,” http://online.wsj.com/article/SB10001424052748704846004575333303589295326.html#printMode

TORONTO—The Obama administration said it has made new progress on a free trade agreement with South Korea that could overcome resistance in Congress, and agreed with Seoul to complete the pact by November. The plan, a bid to jump-start a languishing trade agenda, was announced at the Group of 20 summit Saturday and is designed to end a three-year impasse on a preliminary Free Trade Agreement reached with Korea in 2007. Seoul hosts the next Group of 20 meeting in November, where a deal on the agreement would be unveiled. President Barack Obama is likely to face resistance from unions that fear any new trade pacts may cede jobs to nations abroad. Business, on the other hand, has pushed for the pact, arguing that it will spur exports and create employment in the U.S. Mr. Obama has been walking a political line between both important constituencies. The administration's slow movement on trade thus far has favored labor interests, including its failure to move forward on pacts with Colombia and Panama. The announcement Saturday is also meant to buttress U.S. support of South Korea at a time when it is facing renewed hostilities with North Korea. South Korea's President Lee Myung-bak attends the G8 Summit at the Deerhurst Resort in Huntsville, Ontario June 27, 2010.

Uniqueness – KORUS FTA – Will Pass – South Korea

There’s broad support for the FTA in South Korea.

William H. Cooper, Specialist in international trade and finance, Congressional Research Service, in conjunction with Mark E. Manion, Remy Jurenas, and Michaela D. Platzer, 6/17/2009, The Proposed U.S.-South Korea Free Trade Agreement (KORUS FTA): Provisions and Implications, pg 42

In South Korea, the KORUS FTA must be approved by a majority vote in the unicameral National Assembly to take effect. The Assembly is controlled by President Lee Myung Bak’s Grand National Party, which officially supports the agreement. Unlike in the United States, trade agreements are not subject to any fast-track time lines. President Lee Myung Bak, who was elected in December 2007, has made passage of the KORUS FTA a priority for his government. Most opinion polls genially have shown a majority of South Koreans in favor of the agreement, though opposition has been intense from the opposition parties and rural interests, among others. Furthermore, most polls of South Korean legislators show broad support for the agreement within the National Assembly, which is controlled by President Lee’s Grand National Party. The KORUS FTA was not a significant issue in either the 2007 presidential election campaign, despite the fact that one of the major candidates opposed the agreement, or the April 2008 parliamentary elections.

Uniqueness – KORUS FTA – Will Pass – AT: Beef Dispute

South Korea’s begun importing US beef and the US market share is increasing.

Mark E. Manyin, specialist in Asian affairs, congressional research service, 01/2010, “US-South Korea beef Dispute: Agreement and Status”, http://www.nationalaglawcenter.org/assets/crs/RL34528.pdf

While the U.S. beef industry and U.S. policymakers welcomed the initial April deal, Korean TV coverage of the issue and Internet-spread rumors that questioned the safety of U.S. beef resulted in escalating protests and calls for the beef agreement to be renegotiated or scrapped. U.S. officials countered that measures already in place to prevent the introduction of BSE in U.S. cattle herds meet international scientific standards. To address rising public pressure, the Korean government twice pursued talks with the United States to find ways to defuse these concerns without “renegotiating” the beef agreement. In late June 2008, both governments confirmed a “voluntary private sector” arrangement that allows Korean firms to import U.S. beef produced only from cattle less than 30 months old. Both governments view this as a transitional step until Korean consumer confidence in the safety of U.S. beef improves. U.S. beef exporters have since worked to recapture this key overseas market. Exports of U.S. beef (including bone-in cuts) to South Korea resumed in mid-July 2008, and by year-end reached almost $300 million, slightly more than one-third of the record 2003 sales level. For 2009, despite a drop-off in beef sales worldwide due to the economic recession, sales to Korea may still reach the 2008 level. Though Australia is the main competitor, U.S. beef exporters have gained noticeable market share since the Korean market reopened to U.S. beef. The U.S. share (in quantity terms) rose from 15% in 2008 to 27% in 2009. Future sales will depend on the price competitiveness of U.S. beef compared to Australian beef (largely influenced by changes in their respective exchange rates relative to the Korean won), and signs that Korean consumers are more willing to eat beef away from home as the country’s economy begins to recover.

Uniqueness – Lee Strong – AT: Cheonan Sinking Controversy

Lee’s popularity is high and the public approves his handling of the Cheonan sinking.

Jack Kim, Reuters, 7/1/2010, Forexyard, http://www.forexyard.com/en/news/Key-political-risks-to-watch-in-South-Korea-2010-07-01T072212Z-FACTBOX

What to watch:

-- U.N. Security Council motion. China is under pressure to join a U.N. motion pursued by South Korea and the United States but does not want to anger its ally which it sees as a buffer from U.S. influence in the region. Combined naval exercise by the South Korean and U.S. militaries could raise China's ire if they go ahead as planned in the next few weeks, but they could get scrapped at the last minute as part of diplomatic manoeuvring aimed at winning China's vote on the Security Council.

-- South Korea has yet to implement the strongest of the measures it has announced, such as propaganda broadcasts through loudspeakers set up along the border, which the North's military has threatened to open fire on.

-- Trade across the border has slowed, and movement of people has also been cut back sharply. -- South Korea says it will clamp down on its land and sea border with the North, and that raises the risk of further clashes which, with its more advanced weaponry, the South would probably win. More losses would embarrass North Korea's powerful military and put pressure on Pyongyang for a counter-strike.

-- Political fallout in the South. President Lee has a support rate of more than 40 percent, extraordinarily high compared to his recent predecessors when they were also about half way through their single, five-year presidencies. His handling of the incident has met with public approval so far.

Uniqueness – No Troop Withdrawal

US military presence in South Korea will remain at current levels.

Ben Hancock, The Diplomat’s Seoul correspondent, 3/2/2010, The Diplomat, http://the-diplomat.com/2010/03/02/us-forces-ok-in-rok-for-now/

Obama and Defense Secretary Robert Gates have reaffirmed that US troop levels in Korea will stay close to where they are for the foreseeable future. But in a December forum hosted by the Center for Strategic and International Studies, USFK Commander General Walter Sharp said: ‘We really want to get the discussion to be more based on capabilities…rather than just a number.’

Link – Withdrawal Unpopular

South Koreans oppose troop withdrawals – it’s perceived as abandonment.

Michael Auslin, resident scholar at AEI, 1/2007, American Enterprise Institute, http://www.aei.org/outlook/27342

It is this question of alliances that most concerns U.S. partners in the region. All seem to want to know what the United States intends in the coming years. This observer was asked point-blank by senior South Korean military officers if the United States was going to withdraw its troops from the peninsula after 2008, as some Pentagon officials have mused in recent years.[3] What seems to the Pentagon like strategic redeployment of U.S. troops from the ROK is conflated in South Korean minds with the lack of deep political or economic ties with the United States. South Koreans are rightly proud that the combined U.S.-ROK combatant command is considered by many to be one of the finest fighting forces in the world, and they are even more aware that South Korea has dispatched more troops abroad in service of American or United Nations (UN) missions than almost any other nation. But they perceive--and resent--that Washington is not listening to their concerns, which have become more complex as the country has become more affluent. A leading politician notes that younger South Koreans, in particular, are wary of doing anything to challenge the North that could threaten the South's economic progress. "But we think time is on our side, and we don't want to do anything to strengthen Kim's regime," continues the politician, who thinks South Korea should somehow support North Korea's citizens as a way of moving toward regime change.

Link – Withdrawal Unpopular

Both progressives and conservatives support the US military presence.

Haesook Chae, associate professor in the Department of Political Science at Baldwin-Wallace College, & Steven Kim, assistant professor at the Asia-Pacific Center for Security Studies, Autumn 2008, The Washington Quarterly 31:4, p. 86-7, http://www.twq.com/08autumn/docs/08autumn_chaekim.pdf

On questions related to the South Korean–U.S. alliance, however, progressives depart from their perceived role. Progressives believe that the U.S. troop presence in South Korea has led to economic prosperity for their nation (USPROMOTE). They believe in strengthening the alliance and oppose a precipitous withdrawal of U.S. troops from South Korea (SKUSALNC, SKALLYUS, USFKRMVL). In general and in a hypothetical situation in which conflict breaks out between the United States and China over the Taiwan Strait, progressives hold that South Korea should not waver in its alliance with the United States in exchange for closer ties with China (TAIWAN and SKALLYCH). The paradoxical conclusion is that progressives, while censuring U.S. activity in the Korean peninsula, still value the alliance with the United States. Although progressives value the alliance, they have mixed feelings toward it. Progressives view North Korea with ambivalence, both as a kin nation with which to be reconciled and as a mortal threat to be constrained. The South Korean–U.S. alliance is critical to both of these impulses. From one perspective, progressives believe that U.S. forces in Korea (USFK) are an obstacle to peacefully engaging with North Korea. At the same time, however, progressives are mindful that the alliance has staved off North Korea aggression. Alliance with the United States, then, occupies the rather complex position of being simultaneously the chief obstacle to inter-Korean reconciliation and the chief guardian of South Korea’s security. Although progressives and conservatives embrace the South Korean–U.S. alliance, they disagree on how it should be structured. In February 2007, Seoul and Washington signed a bilateral agreement that will transfer operational control of the South Korean military to the South Korean government in 2012. (The United States has maintained command authority over U.S. and South Korean forces since the Korean War.) Progressives endorse this change in leadership as an enhancement of national autonomy, believing it will be done without diminishing the deterrent value or adversely affecting U.S. commitments to South Korea (TWCINDPN, TWCALNC, and TWCPROVK). Progressives want the alliance but on their own terms. Conservatives, on the other hand, oppose any change to the command structure, believing it would weaken the alliance and encourage North Korean aggression. For conservatives, the alliance and U.S. leadership in it go hand in hand, and one cannot be rejected without the other. What emerges from the survey data is a complex picture. There exists a clear-cut ideological split on views of the United States, but the political camps converge on the South Korean–U.S. alliance, agreeing that the alliance is of critical importance because of a still-dangerous North. Yet, the two camps see the alliance in different ways. For progressives, the alliance should accommodate movement toward inter-Korean reconciliation; for conservatives, security is preeminent, and thus no one should tamper with the alliance. Nevertheless, both sides essentially agree that the alliance is valuable to South Korea’s national interests. This pragmatic approach from the progressive camp is a major finding because many analysts in South Korea and the United States have expressed the concern that the alliance may become increasingly tenuous due to widespread and growing anti-American sentiment. This study shows that anti-American sentiments do not contradict but rather coexist with a general support for the alliance.

Link – Withdrawal Unpopular – AT: South Korea Opposes US Military Presence

Support for the US presence has rebounded among the South Korean public.

Bruce Klingner, Senior Research Fellow for Northeast Asia at The Heritage Foundation's Asian Studies Center, former Chief of CIA's Korea Branch, former Deputy Chief for Korea in the CIA's Directorate of Intelligence, 4/1/2008, Heritage Foundation, http://www.heritage.org/Research/Reports/2008/04/New-South-Korean-President-Brings-Conservative-Policy-Change

Sixth, public support for the U.S.-South Korea relationship, which Roh and the progressives were seen as having needlessly strained, has rebounded. The decline in anti-Americanism, which was preva­lent during the 2002 presidential campaign, cou­pled with declining support for Roh's engagement policy, which failed to prevent the North Korean missile and nuclear tests, resulted in more domestic support for maintaining strong military ties with Washington.

Criticism of the US doesn’t signal opposition to the US presence – they support the alliance.

Haesook Chae, associate professor in the Department of Political Science at Baldwin-Wallace College, & Steven Kim, assistant professor at the Asia-Pacific Center for Security Studies, Autumn 2008, The Washington Quarterly 31:4, p. 93, http://www.twq.com/08autumn/docs/08autumn_chaekim.pdf

Third, South Korea should cultivate its alliance with the United States. Regardless of political orientation, the public supports maintaining the alliance. Counterintuitive though it may seem, strong anti-American sentiments should not be interpreted as a demand to terminate or weaken the alliance. Progressives are able to sustain both a negative view of the United States and a positive view of the alliance. For many progressives, the U.S. military presence is a necessary evil.

Link – Withdrawal Unpopular – AT: South Korea Opposes US Military Presence

North Korea’s nuclear test and Obama’s inauguration have increased support for the US presence.

Ben Hancock, The Diplomat’s Seoul correspondent, 3/2/2010, The Diplomat, http://the-diplomat.com/2010/03/02/us-forces-ok-in-rok-for-now/

Charles Reeder remembers the backlash after the ‘Highway 56 Incident’ in 2002, when a couple of US soldiers driving an armoured vehicle accidentally crushed two South Korean schoolgirls, yet were found not-guilty of negligent homicide by a US military court. ‘It rocked the whole USFK,’ says Reeder, 42, a recent retiree from the United States Forces Korea, who was stationed in downtown Seoul at the time. ‘It was painful…We were out there on the gates, and it was like a siege mentality.’ South Korean activists broke into a US facility in the northern part of the capital, he recalls, and firebombed a warehouse base near the port of Incheon. Besides being a tragic loss of young life, the incident marked a low point for the half-century long US-South Korea alliance. It dragged down US military morale here and brought to the surface tensions about the presence of the 28,500 foreign troops. Several new presidents and two North Korean nuclear tests later, there are signs that attitudes on both sides of the fence have changed significantly. But with the upcoming transfer of wartime operational control (OPCON) back to South Korean hands and major shift in the US military stance, there are mixed and complicated feelings here about the future of the USFK’s role. ‘Meet the Common Danger’ In talking about the current state of the US-South Korea military alliance, Mark Monahan starts like any good history professor: from the beginning. Monahan teaches Asian studies and the Korean War to US soldiers here through the University of Maryland. But as a North Korean-born naturalized American and Korean War Veteran–who has served in both the South Korean and US armed forces–he recalls events in a way that is far from dry academia. On Oct. 1st, 1953, months after the Korean War armistice was signed, the United States and the Republic of Korea (South Korea) sealed the Mutual Defense Treaty. The short, six-article pact gave the United States the right to base troops in South Korea and established that both will ‘meet the common danger’ if faced by the threat of war; North Korea is not expressly cited. The drawdown of US troops stationed in Korea, from the nearly 600,000 that were on the peninsula at the end of the war, really began after the Nixon Doctrine in 1969, says Monahan. The US 7th Infantry Division was brought home and inactivated in 1971, not long after then South Korean President Park Chung-hee committed about 50,000 ROK combat troops to Vietnam. ‘This was a very difficult time in terms of US-ROK relations,’ he says. Perhaps more so, at the government level at least, than after the 2002 incident. ‘It’s almost like a temperature gauge,’ says John Feffer, co-director of the Washington-based Foreign Policy in Focus and editor of The Future of US-Korean Relations. ‘When the United States reduces the number of troops [in South Korea] it has historically been an indication of displeasure.’ Today, Feffer says, this is part of the unease surrounding the transfer of OPCON, which dictates who has command over the 650,000 ROK troops in wartime. He describes it as ‘the tension between being abandoned by the United States and being suffocated by the United States.’ Given to the United Nations Command at the outset of the Korean War, OPCON was transferred to the US Combined Forces Command (CFC) in 1978, and is to return to South Korea in April 2012. The ROK regained peacetime control of its troops in 1994. Conservatives in South Korea, like current President Lee Myung-bak and many members of his Grand National Party, are the most concerned about the OPCON transfer and what it might mean for US-ROK interoperability in the event of a North Korean attack. The fact that the decision on the transfer was made in October 2006–the same month the North conducted its first known nuclear test–likely adds to their fears. But Feffer is dismissive. ‘This is a normal evolution in the alliance — frankly, the conservatives should be celebrating,’ he says. ‘Traditionally, conservatives are concerned about sovereignty, and this should be seen as a sovereignty issue.’ Cheong Wook-Sik, representative of the Seoul-based Peace Network, says he agrees–in principle. But as the founder of an organization pushing for decreased militarism on the peninsula and more discussion about Korean reunification, he has other worries about what the OPCON transfer could mean for the future of the US military presence here. The first is an increase in compensatory South Korean military spending, which Cheong says saw a large jump during the administration of Roh Moo-hyun, who was president when the OPCON transfer was agreed upon. South Korea is now the third-largest buyer of US arms on a foreign military sales basis, buying $800 million worth in 2008. ‘Generally South Koreans think the US presence is needed,’ Cheong says, though he adds the 2000 summit between then South Korean President Kim Dae-jung and North Korean leader Kim Jong-il made people ‘rethink the necessity of US soldiers in Korea.’ He also says that feelings toward troops reflect overall sentiment towards the US government, and that attitudes have turned more positive since Barack Obama’s inauguration as US president.

Link – Withdrawal Unpopular – AT: South Korea Opposes US Military Presence

Opposition only comes from fringe groups – there’s broad public support for the US military presence in South Korea.

Kevin Shepard, James A. Kelly Korean Studies Fellow at Pacific Forum CSIS, Research Fellow at The Institute for Far Eastern Studies, Kyungnam University, 10/18/2009, Asia-Pacific Business and Technology Report, http://www.biztechreport.com/story/254-changing-tides-usa-korea-alliance

While the alliance is not a relic, its foundation is. The 1954 mutual defense treaty was designed to put boots on the ground; to defend against North Korean, Soviet or Chinese offensives. This alliance played a part in South Korea's economic growth, which stimulated the democratic movement resulting in a freer people; ironically, one of the challenges faced by alliance supporters today. It is not hard to find civic groups in Seoul that believe U.S. troops are preventing unification of the two Koreas and stifling democracy and other freedoms in the South. Nor is it difficult to find outspoken opponents in Washington calling for the withdrawal of U.S. troops overseas, and especially in what they see as an ungrateful South Korea that piggybacks off American tax dollars while looking down on American soldiers. Neither of these groups, however, are representative of the public. In South Korea, 64.5 percent of the people accept the U.S. demand for the USFK to have increased strategic flexibility, with only 33.5 percent believing that the role of U.S. forces is merely to deter North Korean aggression. In addition, nearly 60 percent have a very favorable image of the United States, with only 15.1 percent having a "not very favorable" image, or no feelings at all. On the other hand, Americans, hardest hit by the recent financial collapse and subsequent global economic downturn, are becoming increasingly aware of the economic strength and potential of Asia, and Northeast Asia in particular. For Washington to maintain a presence in, and influence over, economics in the region, its presence in South Korea is vital. In addition, as global leaders including President Obama recently recognized the limitations of the G8 and challenged the G20 to play a more dominant role in shaping the world economy, South Korea's role as host in 2010 is an opportunity for the U.S.-ROK alliance to project its ambitions on other economic players in the international community. The alliance handlers appear to be aware of the need for change and are working in the right direction; future efforts need to concentrate on increasing public awareness of the benefits as well as the realities of the growing alliance, and the continued shift away from defense-centric security toward a broader aim of maintaining regional stability and creating a platform for growth. An allied approach to China as well as increased ties with Japan, be it trilaterally or only through the channels provided by U.S. bilateral relationships, will be instrumental in ensuring that the U.S.-ROK alliance maximizes benefits to both Washington and Seoul. Lee has promised to improve ties with Tokyo, although to what extent that might happen is yet to be seen.

Link – Plan Hurts Lee

The plan hurts Lee – he’s maintained support by maintaining the US presence.

Evan Ramstad, Wall Street Journal, 6/28/2010, http://online.wsj.com/article/SB10001424052748704846004575332652265196056.html

At the summit of top economic powers in Canada, Mr. Obama stood with South Korean President Lee Myung-bak to announce that the U.S. would postpone a handover by the U.S. to South Korea of wartime control of South Korean forces to 2015 from 2012, something conservatives in South Korea had pushed for. Mr. Obama also said he would lobby the U.S. Congress to ratify a free trade agreement, a deal the two countries signed three years ago but that has languished in the U.S. The U.S. president also called on Sunday for the United Nations Security Council to acknowledge that North Korea had "engaged in belligerent behavior that is unacceptable to the international community'' in sinking a South Korean ship. He said the international community would continue to step up pressure on North Korea until it made a decision to follow international norms. For Mr. Obama, the actions provided an opportunity to reinforce U.S. influence in northeast Asia. For South Korea and Mr. Lee, the moves are important as Seoul tries to persuade Beijing and Moscow to acknowledge that their ally North Korea is responsible for an attack on a South Korean warship in March that killed 46 sailors. The matter is now before the Security Council, where China and Russia hold veto power. South Korean officials hope the council will produce an official statement of blame, but they don't expect China and Russia to go along with penalties against Pyongyang. On Monday, North Korea issued a statement that it "must bolster nuclear capability" due to U.S. hostility, a comment that used wording seen before it tested nuclear explosive devices in the past. Pyongyang has denied involvement in the sinking, which it has repeatedly blamed on South Korea and the U.S. Over the weekend, it repeated a call for Seoul to invite its military officials to see the evidence South Korea had collected, including remnants of a North Korean torpedo. Separately, Pyongyang on Saturday set a September date for an election of party leaders that some South Korean analysts say may become the first public appearance of dictator Kim Jong Il's son Kim Jong Un, thought to be his designated heir. In Toronto, Mr. Obama called South Korea "one of our closest friends" and said Mr. Lee handled the ship sinking and subsequent public-relations battle with North Korea "with great judgment and restraint." "Both on the security front and on the economic front, our friendship and alliance continues to grow," Mr. Obama added. The Group of Eight leading economies meeting Saturday agreed to endorse the international investigation led by South Korea that found North Korea responsible for sinking the ship, called the Cheonan. In a separate meeting Saturday, Mr. Obama urged Chinese President Hu Jintao to support strong action by the Security Council, said Jeff Bader, a senior director of Asian affairs at the U.S. National Security Council, after the meeting. For South Korea, the wartime control transfer became a particularly urgent matter after the Cheonan sinking exposed command and communication problems in the South's military. Seoul took peacetime control of its 600,000-person military from the U.S. in 1994 and the two countries agreed in 2006 that South Korea would take wartime control of its military from the current joint command led by a U.S. general. A transition plan took effect in 2007 with 2012 scheduled for the handover. The transition is popular with U.S. military planners who believe it will give the Pentagon more flexibility to move American troops in and out of South Korea. But it has always received a mixed reaction in South Korea, with people divided by a belief that their military should be able to handle the job and worry that they'll lose some of the safety net the U.S. military leadership is perceived to provide. South Korea's conservative establishment throughout last year pressed Mr. Lee to seek a delay of the wartime control transition and enlisted some military experts in Washington to their side. U.S. and South Korean military officials, including the senior leaders in Seoul who were in charge of the transition, repeatedly demonstrated the transition was proceeding smoothly. Messrs. Lee and Obama were content to let the matter stand until the Cheonan sinking. "Neither side wanted to make this a burning issue, but the Cheonan incident on top of the nuclear test that North Korea conducted after Obama took office last year, really showed that the U.S. had to do something to beef up South Korea's security," said Lee Chung-min, a dean at Yonsei University in Seoul and adviser to South Korea's foreign ministry.

Link – Plan = Loss for Lee

Lee opposes a withdrawal of the US military presence.

Norimitsu Onishi, New York Times, 4/11/2008, http://www.nytimes.com/2008/04/11/world/asia/11korea.html

President Lee Myung-bak said Thursday that he would focus on repairing South Korea’s strained relations with the United States during a visit to Washington next week, his first since his inauguration on Feb. 25. In an hourlong interview, Mr. Lee, a conservative, unequivocally stressed the importance of maintaining United States troops on the Korean Peninsula and said the two countries shared objectives in their policies toward North Korea. Mr. Lee said he was still committed to drawing North Korea out of its shell by engaging it economically, despite the verbal tit-for-tat between the Koreas in recent weeks. Mr. Lee portrayed the exchanges, including the North’s description of him as a “traitor” and a “U.S. sycophant,” as instances in which the countries were “testing each other” at the start of the new South Korean administration. Mr. Lee spoke a day after his Grand National Party secured a thin majority in the National Assembly, winning 153 seats in the 299-seat legislature. Given Mr. Lee’s own landslide victory last December, his supporters had hoped for a clear-cut victory that would have allowed him to pass difficult legislation against liberal opposition. But Mr. Lee’s approval ratings have declined in recent weeks because of growing popular doubts about his promises to revive the economy and his appointment of ministers who were later forced to step down over problematic real estate dealings. Also, lawmakers loyal to a rival bolted from Mr. Lee’s party, handing electoral defeats to some of his closest allies this week. Although conservatives like the president dominate the National Assembly, this week’s results will require deal-making and compromise from Mr. Lee, a former Hyundai executive and mayor of Seoul who is known for his take-charge style and is nicknamed the Bulldozer. Mr. Lee said the election indicated that the “Korean people are fully supporting” his policies on reviving the economy, but he added that “we will be discussing fully and all the time with the opposition parties regarding important policy matters.” Mr. Lee said he would focus on passing legislation to deregulate the economy and ratifying a free trade agreement with the United States. It is unclear whether he will now have the votes to lift barriers on the import of American beef, a critical condition for passage in Washington. On his first trip overseas since taking office, Mr. Lee will spend four days in the United States and meet President Bush at Camp David, where they are scheduled to hold a joint news conference on April 19. Although relations between the countries have improved greatly since last year, when the Bush administration softened its hard-line stance on North Korea, Mr. Bush and Mr. Lee’s predecessor, Roh Moo-hyun, a liberal, had often appeared ill at ease with each other. Mr. Bush had also rejected the so-called sunshine policy toward the North initiated by Mr. Roh’s predecessor, Kim Dae-jung. “During the last 10 years, this relationship, of course it hasn’t been damaged beyond repair, but there were some instances where we did experience some difficulties, and some damage has been done to the relationship between Korea and the United States,” Mr. Lee said. “So during my visit next week to the United States, I hope, first of all, to repair this and to bring about trust and to rebuild the trust between the two countries.” During Mr. Roh’s administration, officials on both sides warned, though privately, of serious problems in the security alliance. Instead of stressing the alliance’s importance, Mr. Roh talked of South Korea’s role as a “balancer” in the region while Americans spoke privately of the possibility of one day withdrawing troops from the South. But Mr. Lee dismissed the idea of withdrawal. “No. 1, the role of the U.S. forces in Korea, as we all know, is deterrence — is to prevent a war from breaking out here on the Korean Peninsula, and in that sense, they do a tremendous job,” he said. “Secondly, it goes beyond that because by the mere presence of the U.S. forces in Korea, they contribute to the peace and stability of East Asia and beyond Northeast Asia as well.”

Link – Plan = Loss for Lee

Lee has made maintaining the US presence his primary priority.

Bruce Klingner, Senior Research Fellow for Northeast Asia at The Heritage Foundation's Asian Studies Center, former Chief of CIA's Korea Branch, former Deputy Chief for Korea in the CIA's Directorate of Intelligence, 4/1/2008, Heritage Foundation, http://www.heritage.org/Research/Reports/2008/04/New-South-Korean-President-Brings-Conservative-Policy-Change

Lee Myung-bak has declared that repairing Seoul's relations with Washington is his predominant foreign policy goal, citing the bilateral military alliance as the bedrock of South Korean security. Lee will give the South Korea-U.S. relationship primacy, reversing Roh's subjugation of foreign affairs to further inter-Korean ties. This is a dramatic change from the tone set by Roh, who during the 2002 campaign asked: "What's wrong with being anti-American?" Roh's administration was fraught with a series of tensions brought on by differences over North Korean policy, bilateral security issues, and remarks by the South Korean president that generated suspicions over his views toward the U.S. The new president would do well to seek com­mon ground in transforming the U.S.-South Korea military alliance to incorporate enhanced South Korean military capabilities while main­taining an integrated U.S. role. Washington and Seoul should conduct a joint study of South Korean missile defense needs, including potential integration into a multilateral ballistic missile defense system. Yet Lee will risk alienating Washington if he presses too hard on reversing the decision to trans­fer wartime operational command to South Korea in 2012.[5] Roh's quest to gain operational command was depicted as regaining national sovereignty and was consistent with his intent to distance South Korea from the U.S. and to carve out an indepen­dent role for South Korea in the region. Conservative National Assembly members and former defense ministers and generals were vehemently opposed to the idea, which they thought would needlessly undermine South Korea's national security. Moreover, they feared that dis­banding the integrated Combined Forces Com­mand could serve as a precursor to further U.S. troop cuts and eventual abandonment by Washington. Reversing the decision has thus became a Holy Grail for Roh's opponents, who see it as means to secure a long-term U.S. commitment to defending South Korea.

Internal – Agenda – Public Support Key

Public support’s key to Lee’s agenda.

Kon-Su Yi, senior research fellow of the Center for Governance Research at the East Asia Institute, adjunct professor in the Department of Public Administration at Daegu University, April 2010, “Exploring Determinants of President Approval of Myung-bak Lee,” http://www.eai.or.kr/inc/viewContentPanel.asp?catcode=&code=kor_report&idx=9153&gubun=K&table_wid=697

Presidential approval indicates the public evaluation of a president’s job performance, and reflects the level of public satisfaction on major policies that the president promotes. In a democratic society, the public support for the president is the political foundation for steering state affairs, and at the same time it exerts a great influence on the president’s leadership. High presidential approval has positive effects on the president’s performance, whereas low approval can dampen the president’s activities and further plans (Ka 2005, 154-156). In order to resolve many contending economic and social issues that South Korea confronts, President Myung-bak Lee’s active policy drive is needed with strong public support.

Internal – Agenda – Alliance Key

Lee gets the blame – maintaining the alliance is key to his political strength.

Scott Snyder, Director at the Center for U.S. – Korea Policy at the Asia Foundation, 3/16/2009, The Asia Foundation, http://asiafoundation.org/publications/pdf/488

Although Roh’s style of managing relations with the United States was politically contested within South Korea andentailed costs in terms of distancing South Korea from the traditional protection it had enjoyed through close security relations with the United States, the Roh administration was able to work together with the Bush administration on many sensitive alliance issues, including reconfiguration of U.S. forces, the dispatch of South Korean troops to Iraq, and negotiation (but not ratification) of a potentially strategically significant free trade agreement (FTA) with the United States. One former Roh advisor observed privately in the summer of 2008 that Roh may not have said the right things, but on relations with the United States, he delivered; Lee Myung-bak has said what Americans want to hear, but it remains to be

seen whether he will actually be able to garner South Korean public support to deliver on expanded cooperation with the United States.5 Thus, a crucial question is whether Lee will be able to garner public support from an increasingly proud and sensitive South Korean public on issues related to the alliance. Lee’s decision to open South Korea’s beef market on the eve of his meeting with President Bush became a lightning rod for public criticism of the Lee administration, sparking criticisms that Lee had sacrificed South Korean national interests by being too generous toward the United States in allowing a complete opening of the beef market. An MBC documentary on the U.S. beef industry televised within two weeks of Lee’s visit to Washington attempted to link downer cattle to mad cow disease (bovine spongiform encephalopathy (BSE)) and internet rumors that sub-standard U.S. beef would be served at South Korean school cafeterias and military mess halls stirred public demonstrations over the issue in early May. The focus of the demonstrations then morphed in June into a protest against Lee’s leadership style, whichwas widely perceived as dictatorial and narrow, since Lee appeared to listen only to his close advisors and friends with little apparent regard for other public stakeholders on specific issues. The hope among the general public appeared to be that Lee would reflect on the demonstrations and develop a more broadly consultative style of leadership more appropriate to that of a president and less analogous to that of a private sector CEO. Although the demonstrations themselves did not become expressions of anti-American sentiment, Lee Myung-bak made two public apologies for his handling of the issue. His administration was undoubtedly weakened by the demonstrations. Finally, the situation calmed down as the South Korean public began to feel that the demonstrations were being hijacked by radicals willing to use violence against the police to pursue their aims. In addition, the incident made Lee’s handling of the alliance—and his ability to stand up for South Korean interests against the United States—a potential litmus test for the public to scrutinize whether Lee is able to ensure that the relationship with the United States fully serves South Korean interests.

Internal – Economic Reform – Capital Key

Lee’s political capital is key to getting his reforms and maintaining economic growth.

Dr. Soogil Young, President of the National Strategy Institute (NSI), Chairman of the Korea National Committee for Pacific Economic Cooperation (KOPEC), former President of the Korea Institute for International Economic Policy (KIEP), Korea’s former Ambassador to the OECD, 1/5/2009, East Asia Forum, http://www.eastasiaforum.org/2009/01/05/south-korea-a-test-of-political-leadership/

The real challenge facing the Korean government next year is to undertake reform measures that will help enhance the longer-term growth potential of the economy. The current crisis could discourage the government from thinking long-term and pursuing fundamental reforms. However, the current crisis can serve an important catalyst in overcoming the vested interests opposed to reforms and help the government push those reforms with a success. It seems that President Lee has already seen this opportunity and is focused on trying to do just this. His agenda now is the removal of some politically-motivated regulation affecting big businesses and real-estate transactions; across the board tax cuts, including cutting corporate tax, reform of the public corporation sector, including downsizing of many such corporations, taming of the labor unions and the teachers’ union, and as much undoing of the forced balancing of regional development as possible. In addition, he has announced, he is embarking on a vision for low-carbon green growth of the Korean economy as a long-term development strategy, proposing not only to cut carbon emissions so as to become an active participant in the post-2012 climate change regime, but also to create new growth engines out of low-carbon green industries and technologies, in order to realize high growth ambitions for the Korean economy long-term. All these measures to enhance the fundamentals of the Korean economy will feed back into the prospects for investment and growth in 2009 and beyond, and should help restore growth dynamism. This requires effective policy implementation, and calls for the exercise of better political leadership on the part of President Lee to have his own party rally behind him and to secure the support of the opposition parties for reform efforts. In the final analysis, getting the Korean economy back on track is a political challenge – that of creating the political will to push, through the current economic crisis, the reforms to enhance the growth potential of the economy. The Koreans will be tested on how they handle this challenge in 2009.

Political leadership is key to Lee’s economic reforms.

Tong Kim, Research Professor in the Ilmin Institute of International Relations at Korea University, Adjunct Professor at Johns Hopkins University’s School of Advanced International Studies, 1/10/2010, Korea Times, “Political Agenda for 2010,” http://www.koreatimes.co.kr/www/news/opinon/2010/01/137_58762.html

President Lee Myung-bak has set forth his policy direction for 2010, which comprises of ``strengthening global diplomacy, economic revitalization toward becoming an advanced nation, and implementation of centrist pragmatic policies for the poor." There is good reason to believe that President Lee can do well in all three areas, if he shows strong political leadership. His second year in office, 2009, was quite successful in terms of rebounding from the economic downturn from the global financial crisis and enhancing South Korea's diplomatic role in world affairs. South Korea is one of the few countries that seem to be heading in the right direction for economic recovery. The country has won a $20-billion contract to build atomic power plants for the United Arab Emirates (UAE). And Seoul will host the second of the 2010 G20 conferences.

Impact – Economic Reform Good – Economy

Economic reforms are key to make South Korean growth sustainable – it’s on the brink.

Korea Times, Cho Jin-seo, 7/2/2010, “Minister urges reform in economic structure”, http://www.koreatimes.co.kr/www/news/biz/2010/07/123_68714.html, AT

Strategy and Finance Minister Yoon Jeung-hyun said Friday that the Korean economy should foster its services industry to create more jobs, and depend less on the exports of manufactured goods by large firms. In a speech to Korea University alumni, Minister Yoon said the country is at a critical point where the export industry cannot sustain growth any more. The traditional economic development model ― working hard, making goods and selling abroad ― will not hold any longer in Korea, he said. "The per-capita gross national income of Koreans is going to surpass $20,000. We are now reaching an 'inflection point,'" he said. "It is clear that what we have is a good chance. But if we miss this one, then there won't be another."

Economic reforms are key to South Korean economic growth.

Bruce Klingner, Senior Research Fellow for Northeast Asia at The Heritage Foundation's Asian Studies Center, & Anthony B. Kim, Policy Analyst in Heritage's Center for International Trade and Economics (CITE), 12/7/2007, http://www.heritage.org/Research/Reports/2007/12/Executive-Summary-Economic-Lethargy-South-Korea-Needs-a-Second-Wave-of-Reforms

To avoid economic stagnation, South Korea must allow market forces to replace government and labor intervention. If implemented, such reforms would unleash the full potential of the South Korean peo­ple and significantly improve the country's eco­nomic competitiveness and strength as a U.S. business partner. Seoul should improve its invest­ment environment through legislative reforms and implement structural reforms to increase the com­petitiveness and profitability of South Korean firms. The South Korean economic engine requires a major overhaul, not just tinkering under the hood. South Korea's next president needs to show a more adept hand on the economic helm as well as a will­ingness to take bold action early in his term.

Impact – Economic Reform Good – Causes Lee’s Agenda

Success on economic reform causes Lee to get the rest of his agenda.

Eunsook Yang, member of The Research Unit on International Security and Cooperation, 10/2008, UNISCI Discussion Papers, Nº 18, p.132, http://redalyc.uaemex.mx/pdf/767/76711404008.pdf

With all the difficulties mentioned above and hard times due to the mass demonstrations since his inauguration, President Lee must have been set back his bulldozer style of policy. The Korean society is now waiting and expecting patiently what the Lee´s administration can do after the hard lesson. The most imminent plan should be restoring its shaky economic situation caused by the international financial crisis. As the first step, Lee announced his proposal in ASEM general meeting on October for the trilateral cooperation to deal with financial problem in Asia on the basis of the strong dollar reserve among China, ROK and Japan. When Lee, the former CEO entrepreneur succeeds on its national economic revival, the Korean people will give further credits on his other policy projects.

Impact – KORUS FTA Good – South Korea Economy

The FTA’s key to the South Korean economy.

William H. Cooper, Specialist in international trade and finance, Congressional Research Service, in conjunction with Mark E. Manion, Remy Jurenas, and Michaela D. Platzer, 6/17/2009, The Proposed U.S.-South Korea Free Trade Agreement (KORUS FTA): Provisions and Implications, pg 12-13

Launching the FTA negotiations was largely at the initiative of South Korea. Its main objective in securing an FTA with the United States was much broader than gaining reciprocal access to the U.S. market. Entering an FTA with the United States meshed with a number of former South Korean President Roh Moo-hyun’s long term economic and strategic goals. Roh made an FTA the top economic priority for the remainder of his tenure, which expires in February 2008.13 Soon after his election in 2002, Roh committed himself to raising South Korea’s per capita gross domestic product (GDP) to $20,000 by the end of the decade and to transforming South Korea into a major “economic hub” in Northeast Asia by expanding the economic reforms begun by his predecessor following the 1997 Asian financial crisis. Ongoing competitive pressure from Japanese firms, increased competition from Chinese enterprises, and the rapid ageing of the South Korean workforce has heightened the sense of urgency about boosting national competitiveness. Continuing along this line of argument, ex-Prime Minister Han Duk-soo has said that a failure to adopt significant economic changes will mean that “Korea’s long term growth potential is likely to deteriorate.”14 Lee Myung-bak, who was elected President in December 2007, made the economy the centerpiece of his campaign and has supported the KORUS FTA as part of a larger program to promote South Korean economic growth. During the negotiations, South Korean officials and other South Korean proponents of the KORUS FTA tended not to focus on the increased access to the U.S. market. Rather, they emphasized the medium and long-term gains that would stem from increased allocative efficiency of the South Korean economy, particularly in the services industries. This would presumably be brought about by an influx of U.S. investment and technology into South Korea and by the spur of increased competition with U.S. firms.15 The President and other senior officials in particular emphasized the need to boost the competitiveness of South Korean service industries. An FTA with the United States, they argued, will help address South Korea’s increased economic polarization by spurring job creation in fields such as medical, legal, education, and accounting services in a free trade agreement.16 Some, however, say an FTA will worsen South Korea’s income gap.17 Also, during the talks, there were continuous and often large scale anti-FTA protests, generally led by South Korean farmers and trade unionists.

Impact – KORUS FTA Good – US Trade Leadership

Passing the FTA’s key to US trade leadership.

Phil Levy, resident scholar at the American Enterprise Institute, former Senior Economist for Trade on the staff of the President's Council of Economic Advisers, 6/29/2010, NPR, http://www.npr.org/templates/story/story.php?storyId=128185083

The looming KORUS battle raises a number of questions about the administration's political strategy. Is this a decision to override the concerns of skeptical House Democrats, thereby paving the way for Colombia, the Trans-Pacific Partnership, and more? Or will the administration try to split the difference, as with Chinese tires, and pass only the one agreement while leaving the others hanging? The answers will say a great deal about the prospects for trade policy in the remainder of the president's term. If the administration sees this through, it may mark a welcome return to U.S. trade leadership. If political obstacles prove too much, it will be very hard to conceal the failure in light of this weekend's specific and public commitment.

Impact – KORUS FTA Good – US Influence in East Asia

The FTA is key to US influence in East Asia.

Doug Bandow, Senior Fellow, CATO inst., 04/09, “An Economic retreat from East Asia”, American Spectator, Also Senior assistant to president Reagan, http://www.cato.org/pub_display.php?pub_id=10151

The U.S., whose share of total Korean imports has been falling, would obviously benefit from the pact. The likely increase in exports, perhaps $20 billion annually, would be particularly helpful in the midst of today's deep recession. Demand for American audiovisual, financial, and telecommunications services also likely would increase substantially. Overall, the U.S. International Trade Commission figures that American exports to South Korea would rise nearly twice as much as imports from the ROK. Since the South's per capita GDP today is well below that of the U.S., South Korean demand is likely to increase even more over the longer-term. Even more so if the two Koreas eventually reunite. Economics is not the sum total of the issue, however. The Korean FTA is part of East Asia's great geopolitical game. A rising China is bumping up against a less dominant America; strengthening trade ties is one way for Washington to ensure continued American influence in the region. The U.S. remains the globe's sole superpower, with the ability to project power into every region. But the PRC is engaged in a measured military build-up directed at creating armed forces capable of deterring American intervention in East Asia. Washington will find it increasingly difficult to achieve its objectives with military force. Despite the Wall Street crash last fall, the U.S. retains the world's largest and most productive economy. And China has not escaped unscathed from the global downturn. However, Washington's economic dominance in East Asia is waning. By some measures the PRC has surpassed Japan as possessing the second largest economy.

US influence in East Asia is on the brink – the FTA must be ratified.

Doug Bandow, Senior Fellow, CATO inst., 04/09, “An Economic retreat from East Asia”, American Spectator, Also Senior assistant to president Reagan, http://www.cato.org/pub_display.php?pub_id=10151

Yet the U.S.-ROK FTA sits unratified in Washington. Washington's influence in East Asia is slowly ebbing. Rather than retreating quietly, the U.S. should strengthen its economic role by expanding trade and investment ties throughout the region. Washington should pursue FTAs with Japan and Taiwan. But first Congress should ratify the already-negotiated accord with South Korea. The primary benefit of the agreement is economic. But expanding trade ties offer geopolitical advantages as well. The Bush administration may have overstated the benefits, but only slightly, when it argued: "By boosting economic ties and broadening and modernizing our longstanding alliance, it promises to become the pillar of our alliance for the next 50 years, as the Mutual Defense Treaty has been for the last 50 years." Seoul has a similar objective. Wrote Kozo Kiyota and Robert Stern of the University of Michigan: "Korean officials hope that there will be positive spillover effects from an FTA on the broader bilateral relationship." Moving forward will require genuine statesmanship backed by political courage from the Obama administration. Failing to ratify the South Korean FTA is likely to result in permanent economic and geopolitical damage. Warned Jeffrey Schott: "The stakes -- in terms of both U.S. economic and security interests in East Asia -- are too great, and the costs too high, to reject the pact or defer a decision."

Aff – Not Unique – Economic Reform Won’t Pass

Lee won’t get his economic reforms – he’s been hurt by controversy over US beef.

BBC, 6/7/2010, “South Korea country profile,” http://news.bbc.co.uk/2/hi/asia-pacific/country_profiles/1123668.stm

South Korean President Lee Myung-bak took up office in February 2008, after having scored a record victory margin in December's presidential election with his "Economy, First!" pledge. Previously the CEO of Hyundai Construction and a former mayor of Seoul, Mr Lee is nicknamed "The Bulldozer" for his forcefulness. He has promised to boost growth, cut high youth unemployment and raise competitiveness in the face of challenges from China and Japan. His Grand National Party won control of parliament in elections in April 2008, which observers predicted would allow him to push through his economic reforms. However, his approval ratings plummeted after he agreed to resume US beef imports in order to secure a free trade deal. He was forced to apologise for failing to heed public concerns, and the domestic crisis sparked by the row over US beef imports is thought to have reduced his chances of implementing other promised reforms.

Lee’s economic reform bill will not pass

Reuters UK based news service 6/01/2010 “Key political risks to watch in South Korea” http://www.forexyard.com/en/news/Key-political-risks-to-watch-in-South-Korea-2010-06-01T064117Z-FACTBOX PHK

After suffering a collapse in popularity upon taking office just over two years ago, President Lee Myung-bak has seen a surge in his support as South Korea's economy emerges from the global downturn more quickly than other major economies. Lee's plan for job creation and his business-friendly reform agenda look set for delays in a parliament where infighting in his ruling, conservative Grand National Party and spirited opposition protests have postponed almost all of his plans. A parliament described by local media as dysfunctional has stymied many of the economic reforms proposed by Lee to make Asia's fourth-largest economy more competitive and open to investment.

Aff – Not Unique – KORUS FTA Won’t Pass

South Korea won’t renegotiate and the US won’t ratify the FTA.

JoongAng Daily, 7/1/2010, http://joongangdaily.joins.com/article/view.asp?aid=2922565

Kim Jong-hoon, the trade minister at the Ministry of Foreign Affairs and Trade, said yesterday that there would be no renegotiations or changes made to the original Korea-United States Free Trade Agreement. The remarks came after U.S. President Barack Obama promised Korean President Lee Myung-bak during the G-20 Summit in Toronto that he would push the U.S. Congress to approve the FTA, which was signed three years ago yesterday. But congressional approval is seen as unlikely unless Korea makes more concessions on improving the access of U.S. beef and cars into the Korean market as demanded by American lawmakers. Kim’s remarks underscored that Korea was in no mood for further compromises. “Taking just one period - one comma - out of the agreement will mean a complete revision. This will not happen,” he told reporters at a press briefing. “Sales of American beef are doing much better than before, and I know that the U.S. Congress has had opinions on opening up the market for beef that is more than 30 months old. I am not sure whether the Obama administration will bring that up with us. The U.S. government must consider the fact that raising this issue may end up causing the Korean public to lose faith,” Kim explained. “As for automobiles, I’ve heard many allegations by the U.S. Congress claiming there are hidden import barriers protecting the local industry. However, I have not been able to confirm these allegations, and if they are meant [by the U.S. Congress] to justify the low sales [of American cars] in Korea, it is absolutely unacceptable,” he added. President Obama has asked the U.S. Trade Representative to resume talks with Korea on these issues ahead of submitting the FTA to Congress for ratification. The two countries are hoping to finalize a solution before the next G-20 Summit takes places in Seoul in November. “I told the USTR that when we meet in November, hopefully it will be a decisive moment for both of us,” said Kim. On the recent rumors of a “big deal” in which Korea will open the market fully to U.S. beef imports in return for agreeing to postpone the transfer of wartime command of military forces in Korea, Kim said such speculation was “totally absurd. It was not about giving up something in return.”

The FTA won’t pass.

Tax-news.com, 7/5/2010, " S. Korea Will Not Amend FTA With US ", http://www.tax-news.com/news/S_Korea_Will_Not_Amend_FTA_With_US____44138.html, AT]

Kim Jong-hoon, South Korea’s Trade Minister, has said that his country would not be prepared to amend the signed, but not ratified, United States-South Korea free trade agreement (KORUS FTA). His comments come after the recent meeting between South Korea’s President, Lee Myung-Bak, and the United States President, Barack Obama, after which the latter had confirmed his intention to present the KORUS FTA to the US Congress. While President Lee had, at that time, welcomed President Obama’s “firm, continued commitment towards realizing this very important agreement”, and agreed that both sides should talk about the specific ways to move the agreement forward, Kim Jong-hoon appeared to specifically rule out any changes or renegotiation of its terms. In particular, he seemed closed to any variation of the terms of the KORUS FTA which have been the subject of discussion in the US, particularly with regard to South Korea’s auto industry and its non-tariff barriers, but also on the barriers to the full import into South Korea of US beef. President Obama has requested that all matters should be resolved by the time he visits South Korea in November this year. On the other hand, while Kim Jong-hoon welcomed the opportunity to work closely with the USTR in that period, he did not seem willing to be tied to a particular timeframe. He was more concerned that the terms of the agreement should remain acceptable to South Korea.

Aff – Not Unique – Lee’s Weak

Lee’s a lame duck.

Bruce Gale, The Straits Times/ANN, The Island, 7/23/2010, http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=2743

Is President Lee Myung Bak of South Korea about to become a lame duck leader? Recent developments certainly suggest that that is the case. On June 2, Mr Lee’s conservative Grand National Party (GNP) received a surprise setback in city and provincial elections. Then, on June 29, the National Assembly rejected a controversial plan to modify an earlier proposal designed to ease congestion in Seoul by developing an alternative city 150km south of the capital. This was followed on July 11 by the resignation of a key presidential aide who was named in an alleged abuse of power scandal involving President Lee’s acquaintances. Adding insult to injury are the opinion polls, which last month showed the President’s approval rating falling to below 40 per cent for the first time this year. Mid-term blues are common among South Korean presidents. Unfortunately, they also tend to become permanent. These once-popular leaders end their terms in ignominy, usually with approval ratings below 10 per cent.

Aff – Link Turn – Withdrawal Popular

The South Korean people want a reduction of US military presence.

Andrew Yeo, assistant professor in the department of politics, June 14, 2010 "Anti-Base Movements in South Korea: Comparative Perspective on the Asia-Pacific," The Asia-Pacific Journal, http://www.japanfocus.org/-Andrew-Yeo/3373

Public perceptions became more critical of U.S. bases following the widely publicized brutal rape-murder case of Yoon Geumi in 1992.7 USFK-related crimes were more fully reported and taken more seriously as civic groups pushed for revisions to the unequal Status of Forces Agreement (SOFA) which critics charged protected Americans against prosecution for crimes against Koreans. Local NIMBY protests existed prior to this point, but only in the mid-1990s did civic groups at the national level attempt to form a broader coalition movement to contain or eliminate U.S. bases. In 1997, national civic groups joined forces with local residents across different regions where U.S. bases existed to form the Pan-National Solution Committee to Return U.S. Bases. The movement demanded the reduction and eventual return of U.S. bases in South Korea, as well as the restoration of sovereignty rights, peace, and reunification. Although small in scale, the loose coalition did bring together actors from peace, women, student, and labor groups on the common theme of opposition to U.S. bases.8

Aff – Impact Inevitable – Economic Reform Doesn’t Solve

Lee’s economic agenda won’t stabilize the South Korean economy.

Ihlwan Moon, BusinessWeek, 7/7/2010, "Lee Needs to Do More for Korea's Upgrade", http://www.businessweek.com/blogs/eyeonasia/archives/2008/02/lee_needs_to_do_more_for_koreas_upgrade.html, AT

Lee Myung Bak, a business icon of South Korea's growth-at-all-costs era in the 1970s and '80s, took office as the country's new president on Feb. 25, vowing to lift the economy into the world’s top seven from the current No. 13 in a decade. It’s good to hear his promises to dismantle the bureaucracy slowing business processes, slash corporate tax rates, and introduce steps to attract foreign investment. But Lee’s approach to please already-established business groups won’t be enough to overcome Korea’s next round of challenges. To really achieve the kind of flexible and innovative economy Korea needs, Lee will have to lead a wholesale shift in business practices, abandoning the country’s somewhat xenophobic cultural mindset and adopting a far greater willingness to tolerate job losses and other short-term pains. Lee’s prominent career as a chief executive of the construction arm of the giant Hyundai conglomerate gave him skills to get results quickly. He has won “the Bulldozer” nickname, thanks to his go-getting style of pushing through big projects on time. His proposal to make the life of big business groups easy will probably lead to some quick results. What Korea now needs, however, is a change in the way young students are educated and managers are carrying out business duties. Korean kids may do well when it comes to international standardized tests but few think its university system produces enough of the kind of problem-solving and risk-taking graduates. Younger Korean managers are rarely empowered to challenge the established wisdom of senior management at the chaebol. Overhauling the Korean economic model is a crucial choice the Koreans have to make in years ahead. Embracing a different perspective or new ideas won’t be achieved by railroading through policy agenda. Changing all this will require a sustained and sometimes economically painful transition.

South Korea Economy 1NC

The South Korean economy is expanding and will continue to grow through 2011.

AFP (Agence French Press) French News Agency, 7/12/2010, “Central bank raises growth forecast for S.Korea economy”, http://www.france24.com/en/20100712-central-bank-raises-growth-forecast-skorea-economy PHK

South Korea's central bank Monday raised its 2010 economic growth forecast to an eight-year high of 5.9 percent, citing robust industrial output, exports and business investment in the first half. The forecast by the Bank of Korea compares to its 5.2 percent estimate in April. The bank now tips Asia's fourth-largest economy to expand 4.5 percent in the second half compared to a year earlier after growing 7.4 percent year-on-year in the first six months. This year's revised growth forecast, if confirmed, would be the highest since an actual 7.2 percent in 2002. It is also slightly higher than the government's recent projection of 5.8 percent. "The Korean economy is expected to maintain its upward trend into next year ...consumer prices are expected to rise at a faster pace in the second half on demand-pull inflationary pressure," the central bank said in a statement. In the second quarter the economy expanded 1.2 percent quarter-on-quarter but this may fall to 0.7 percent in the third quarter, the bank said. Last week the International Monetary Fund also raised its full-year forecast, to 5.75 percent from an earlier 4.5 percent. The central bank increased its 2010 inflation forecast to 2.8 percent from its earlier 2.6 percent. It predicted 2011 inflation at 3.4 percent, from 3.3 percent forecast earlier. Last Friday the bank unexpectedly raised the key rate for July to 2.25 percent from a record low of 2 percent to curb inflationary pressure. In its Monday figures the central bank also expanded its forecast for job growth, saying the number of employed people will increase by around 330,000 this year, up from an earlier projection of 240,000.

Withdrawal of the US military presence crushes South Korean growth.

Jeremy Kirk, freelance writer in Seoul specializing in Northeast Asia, 1/22/2005, Asia Times, http://www.atimes.com/atimes/Korea/GA22Dg01.html, Nicholas Eberstadt holds the Henry Wendt Chair in Political Economy at the American Enterprise Institute and is Senior Adviser to the National Bureau of Asian Research

South Korea has depended heavily on the United States for its defense, said Nick Eberstadt of the American Enterprise Institute and author of the The End of North Korea. Seoul has estimated it would have to double defense spending in order to match the US capabilities if the United States completely pulled out, he said. USFK officials claim formidable capabilities. Marines from Okinawa can be transferred on high-speed ships within hours. US Army Stryker units can be airlifted here within 11 hours and military assets can be steamed from Saipan or Diego Garcia within days, they have said. The US Air Force has B-52 bombers stationed on Guam, part of continuing upgrades on the strategic isle. Navy and marine F/A-18E-F Super Hornets provide all-weather nighttime precision-strike capabilities. F-117 Nighthawk stealth fighters were deployed to South Korea for exercises in July and last year. "Capabilities have changed so significantly that it allows us to make changes in force levels and dispositions," said military spokesperson Krejcarek. A total US pullout could also have a negative impact on foreign investment. Last year alone saw a $2.6 billion investment by US banking giant Citigroup and a $1.2 billion investment by General Motors in South Korea. US officials traditionally have been quick to cite the force presence as a stabilizer, allowing for South Korea's phenomenal economic growth since the end of the Korean War, though it has since entered the economic doldrums. A pullout "would translate into high unemployment rates almost immediately for the young", Eberstadt said. "If the US alliance is undermined with South Korea, the first people who will suffer financially are going to be the young kids."

South Korea Economy 1NC

South Korea’s economy is key to the global economy.

Dr. Manzur Ejaz, Ph.D. in Economics from Howard University, Professor at Punjab University, writer for Daily Times and BBC, 1/5/1998, “Pakistan can learn from South Korea's economic woes,” http://users.erols.com/ziqbal/jan_5.htm

After dragging their feet for weeks, US, Japan and other industrial nations led by the IMF have decided to pump another $10 billion into the South Korean economy. The major economic players in the globalized world were scared by the impact of the imminent possibility of breakdown of the South Korean: it could lead to a worldwide recession/depression and the situation may get out-of-hand quickly. The South Korean example shows that if the economy is of a significant size--South Koreans have the tenth largest economy in the world--and globalized, the economic superpowers and the IMF can go to any extent to rescue it. Otherwise, in cases like Pakistan, the major players don't do much other than issue soothing statements or throwing in meager amounts. Japan's economy has been in a lot of trouble for many years and the South Korean economic collapse can further deteriorate the situation: many Japanese financial institutions have become insolvent. The US economy is at its best for now but it can easily tailspin. The IMF has already warned that the present pace of the US economic growth is unsustainable and if proper measures are not taken, it can get into very serious trouble. Therefore, the US and Japan are acting to rescue the South Korean economy, primarily due to self their interests and only partly because of any benevolent reason. Following are the major considerations behind the rescue plan:

--The East Asian currencies in general and South Korean in particular have lost about half of their value in the last few months. This means that their exported goods will become much cheaper and the goods produced in Japan and other industrialized countries will not be able to compete with them. Consequently, several production units in the industrialized countries will cease to produce, leading to layoffs and, hence, recession. Therefore, to prop up the battered currencies of South Korea and other East Asian countries is vital for the survival of the industrialized world.

--The collapse of South Korean and other East Asian economies will eliminate their ability to import goods from abroad. At present, the US produces high-value goods like machinery, airplanes and defense weapons etc. East Asia, having the sizeable economies and high per capita income, is one of the major markets for the US. If US exports suffer, not only its balance of trade will tilt against it--having serious economic implications-- but also its production will suffer giving rise to recession. Of course, US would like to avert such eventuality at any cost.

--South Korea owes more than $160 billion to the foreign banks. If it defaults on its payments and goes bankrupt, many banks in Japan, US and other western nations will get into a serious crunch: many may burst. Although, it is claimed that US banks have not a major exposure in this situation but active maneuvering by the six US largest banks to get this package approved shows that the world banking system has very high stakes in this crisis.

--US government officials are anxious to forestall a South Korean default because they fear it would cause a further loss of confidence in other emerging market economies, conceivably leading to worldwide recession. Further, US multinational corporations are major players in the world economy and a deterioration of the emerging markets can lower their profits triggering a downward spiral of the US stock and bond markets. East Asian crisis has already started showing its negative impact on the Wall Street: US stocks market has already lost about 8% to 10% of its value in the last few months.

Economic collapse causes World War III.

Walter Russell Mead, Henry A. Kissinger Senior Fellow in U.S. Foreign Policy at the Council on Foreign Relations, 1/22/2009, The New Republic, http://www.freerepublic.com/focus/news/2169866/posts

None of which means that we can just sit back and enjoy the recession. History may suggest that financial crises actually help capitalist great powers maintain their leads--but it has other, less reassuring messages as well. If financial crises have been a normal part of life during the 300-year rise of the liberal capitalist system under the Anglophone powers, so has war. The wars of the League of Augsburg and the Spanish Succession; the Seven Years War; the American Revolution; the Napoleonic Wars; the two World Wars; the cold war: The list of wars is almost as long as the list of financial crises. Bad economic times can breed wars. Europe was a pretty peaceful place in 1928, but the Depression poisoned German public opinion and helped bring Adolf Hitler to power. If the current crisis turns into a depression, what rough beasts might start slouching toward Moscow, Karachi, Beijing, or New Delhi to be born? The United States may not, yet, decline, but, if we can't get the world economy back on track, we may still have to fight.

Uniqueness – South Korean Economy Strong

The South Korean economy is expanding and will continue to grow.

AFP (Agence French Press) French News Agency, 7/12/2010, “Central bank raises growth forecast for S.Korea economy”, http://www.france24.com/en/20100712-central-bank-raises-growth-forecast-skorea-economy PHK

South Korea's central bank Monday raised its 2010 economic growth forecast to an eight-year high of 5.9 percent, citing robust industrial output, exports and business investment in the first half. The forecast by the Bank of Korea compares to its 5.2 percent estimate in April. The bank now tips Asia's fourth-largest economy to expand 4.5 percent in the second half compared to a year earlier after growing 7.4 percent year-on-year in the first six months. This year's revised growth forecast, if confirmed, would be the highest since an actual 7.2 percent in 2002. It is also slightly higher than the government's recent projection of 5.8 percent. "The Korean economy is expected to maintain its upward trend into next year ...consumer prices are expected to rise at a faster pace in the second half on demand-pull inflationary pressure," the central bank said in a statement. In the second quarter the economy expanded 1.2 percent quarter-on-quarter but this may fall to 0.7 percent in the third quarter, the bank said. Last week the International Monetary Fund also raised its full-year forecast, to 5.75 percent from an earlier 4.5 percent. The central bank increased its 2010 inflation forecast to 2.8 percent from its earlier 2.6 percent. It predicted 2011 inflation at 3.4 percent, from 3.3 percent forecast earlier. Last Friday the bank unexpectedly raised the key rate for July to 2.25 percent from a record low of 2 percent to curb inflationary pressure. In its Monday figures the central bank also expanded its forecast for job growth, saying the number of employed people will increase by around 330,000 this year, up from an earlier projection of 240,000.

South Korean growth is increasing – unemployment is down and investment is up.

Bill Varner, International Corespondent for Bloomberg Businessweek & Sangim Han, Korean correspondent for Bloomberg Businessweek 6/23/2010 “South Korean Jobless Rate to Stay Near 4%, Yim Says” http://www.businessweek.com/news/2010-04-23/south-korean-jobless-rate-to-stay-near-4-yim-says-update2-.html PHK

South Korea’s unemployment rate will remain near the March level of 4.1 percent for at least the rest of the year before gradually decreasing to 3 percent, Labor Minister Yim Tae Hee said. President Lee Myung Bak’s administration, which faces local elections in June, made job creation a priority and pressed the central bank to keep interest rates at a record-low 2 percent to stoke the economy. Business investment is expected to rebound this year, with the Bank of Korea raising its 2010 economic growth forecast to 5.2 percent, the fastest pace since 2006. Speaking through an interpreter, Yim said he anticipates unemployment will gradually drop to 3 percent “in line with the global trend” of increased hiring as the recession recedes.

Korean economy improving, government analysis proves.

Yonhap News publicly funded news agency in South Korea 2/05/2010 “"South Korea's economy maintains "positive" - minister" lexis PHK

South Korea's economy is maintaining its "positive" momentum as production, consumption and investment are steadily recovering from a downturn, the nation's top economic policymaker said Friday. "According to the industrial output figures for January, production, consumption and investment are all rebounding compared with a month earlier. Our economy is keeping its positive momentum now," Finance Minister Yoon Jeung-hyun told a meeting with other ministry officials. He cited the local currency value and higher oil prices as possible downside risks, saying that the nation's export-driven economy should bolster domestic demand in tourism and other areas. During the meeting, also attended by representatives of several pharmaceutical companies, Yoon said that development of new drugs leads not just to the creation of "huge" profits but also contributes to society and the overall economy.

Uniqueness – South Korean Economy Strong

South Korea’s export growth will boost the economy.

Yonhap News publicly funded news agency in South Korea 6/24/2010 “S. Korean economy to continue to grow in 2010: experts” http://english.yonhapnews.co.kr/business/2010/06/24/60/0501000000AEN20100624002000320F.HTML PHK

South Korea's economic conditions will continue to improve despite growing European debt woes, as overseas demand for its exports remain resilient on strong Chinese and other newly emerging economies, analysts said Thursday. In a seminar organized by the Federation of Korean Industries, a local industry lobby, the experts said the country's growth will come mainly from a surge in exports, led by auto and IT industries. Financial and economic institutes here believe the country's economy will grow by as much as 5.8 percent this year. The Korea International Trade Association said last week that the country's exports were expected to grow 22.4 percent from 2009 to reach a record high of US$445 billion. Ahn Seong-ho, a researcher at Hanwha Securities Co., said the global memory chip market may face a possible contraction due to the uncertainties created by the European debt crisis, but that the price of memory chips will likely remain strong throughout the remainder of the year. "Any sudden decline of demand for dynamic random access memory (DRAM) chips appears to be unlikely as the global demand for computers, which account for more than 70 percent of demand for DRAM chips, continues to remain strong due to increasing demands in newly emerging markets," Ahn said in a seminar organized by a local industry lobby, the Federation of Korean Industries. Lee Seung-hyuk, an analyst for Woori Investment and Securities Co., said the international market for mobile phones will grow 11 percent this year from 2009, offering new opportunities for South Korea's world-leading handset and chipmakers, such as Samsung Electronics Co. The experts noted the upward trend will continue well into 2011 for most industrial sectors, including automobiles, whose international market is expected to grow 9.5 percent.

South Korean economy is strong now, and is growing steadily

EconomyWatch, Data based off a Bloomberg Survey of 28 nation’s economies, 2010 http://www.economywatch.com/world_economy/south-korea/

The 2010 GDP growth estimates is based on a Bloomberg survey of 28 economies

including Europe. In this survey, South Korea’s Economy is shown higher than the US, with 3.95% as its growth estimate with 10th rank while the US is 2.60% and is ranked number 14. Since the 1960s, South Korea has been on a growth expressway, thereby earning an apt nickname as the ‘miracle on Han river.’ Driven by aggressive manufacturing oriented towards exports, South Korea economy rose to become the world’s eighth biggest exporter of goods. Clearly considered an advanced economy by international bodies such as the IMF, CIA and World Bank, South Korea’s economic profile has won a string of plaudits, including:

` * World’s 8th largest exporter: Ahead of the UK, Russia and Canada.

* World’s Trading Partner: 3rd largest trader with China and Japan, 7th with the US and 8th with the EU.

* World’s largest shipbuilder: including world’s largest shipyard run by Hyundai Heavy Industries.

* World’s 5th largest automobile manufacturer: including world’s largest automobile assembly plant (Hyundai Motors).

* Asia’s largest oil exporter.

* World’s highest internet connectivity or access with one of the fastest networks as well.

* World’s largest manufacturer of screen displays (LCD, CRT, Plasma, etc).

* World’s fastest increase in patents registered.

* World's largest electronics manufacturing firm: Samsung Electronics.

* World’s second largest steel maker: POSCO

* World’s largest producer of computer memory chips.

Link – Foreign Investment

The US presence is key to foreign investment in South Korea.

IPS, Inter Press Service, 11/5/2004, http://www.ipsnewsasia.net/bridgesfromasia/node/61

"It's a mistake to look at South Korean attitudes toward the U.S. military alliance solely in terms of security considerations," Selig Harrison, director of the Asian programme of the Centre of International Policy, said at the same discussion. "The economics of the situation are very important." He explained that South Korea gets many other benefits from U.S. military presence, a line of argument that U.S. officials also used in countries like the Philippines — which for nearly a century hosted the largest U.S. army and naval bases outside the continental United States. The U.S.-South Korea alliance, Harrison pointed out, "creates a climate of stability favourable for foreign investment and for the preferential economic treatment by international financial institutions that South Korea has received — for example, the 1997 International Monetary Fund bailout". He estimated the direct cost of U.S. forces in South Korea to be roughly 2 billion U.S. dollars a year, apart from billions of dollars in military grants and foreign military sales. He argued that the "almost unspoken, underlying but very real reason why the prospect of an end of the alliance is unsettling to the South Koreans" is that "the U.S. military presence and the alliance commitment of the United States provides a very large economic subsidy to South Korea, an economic cushion, if you will".

Breakup of the US-South Korea alliance collapses foreign investment in the Peninsula.

The National Bureau of Asian Research (NBR), 10/2007, Nicholas Eberstadt, American Enterprise Institute and The National Bureau of Asian Research, Richard J. Ellings, The National Bureau of Asian Research, Aaron L. Friedberg, Princeton University and The National Bureau of Asian Research, Christopher Griffin, American Enterprise Institute, Roy D. Kamphausen, The National Bureau of Asian Research, Travis Tanner, The National Bureau of Asian Research, Conference Report, “A World without the U.S.-ROK Alliance: Thinking about “Alternative Futures,”” http://se2.isn.ch/serviceengine/Files/RESSpecNet/44279/ipublicationdocument _singledocument/DF9CD39B-01B5-4DA5-A4FF-9C0F6E00A9E5/en/Conference_Report.pdf

The specific nature of any U.S.-ROK breakup would naturally have a significant impact on investor confidence in a post-alliance South Korea. An acrimonious, relatively quick breakup would force investors to respond quickly to unpredictable developments, raising the possibility that they would not have sufficient time to anticipate changes. International panics, domestic capital flight, or other “contagion” effects would be possible consequences. If the alliance split over a relatively prolonged, predictable period that minimized uncertainty, however, some participants felt that investor confidence might not elicit major macro-economic responses for the ROK or the Northeast Asian region. A less pleasant scenario for the economy in a post-alliance ROK would be an increase in tensions in the region without an alliance to serve as a deterrent force and crisis control mechanism. The threat posed by a recalcitrant, unreformed North Korea or by a regional territorial dispute among the great powers could quickly raise concerns that Seoul is a likely victim with little control over its own future. In the final analysis, the alliance bolsters investor confidence against possible geopolitical shocks; without the alliance, South Korea’s domestic and international markets would be significantly more vulnerable. Even without disruptive flashpoint crises, the perception that the ROK had become a more risky place to do business could become self-fulfilling: if the risk premium rose, South Korea would perforce be a less competitive platform in the world economy.

US withdrawal would undercut foreign investment and exports.

Don Kirk, former Seoul correspondent for the International Herald Tribune, former Edward R. Murrow fellow at the Council on Foreign Relations, former visiting fellow in the Southeast Asia program at Cornell, 10/28/2003, msnbc, http://www.msnbc.msn.com/id/3071458/

A sign of Roh’s moderating position was that his aides passed the word to the activists that they should scale down their demonstrations, if not halt them altogether, especially since conservatives in the United States were saying, in effect, “If you don’t want us here, we’ll go home.” A consequence of a precipitous decline in U.S. troop strength, Korean trade officials and business people warned, would be a sharp drop in foreign investment and possibly a boycott by American importers and customers of South Korea’s huge exports of products ranging from motor vehicles to memory chips.

Link – Defense Spending

Withdrawal of the US military presence forces an unsustainable increase in South Korean defense spending, crushing growth.

Lee Jae Young, legal assistant to the chairman of the Council on Korea-U.S. Security Studies in Seoul, South Korea, 3/4/2009, UPI Asia, http://www.upiasia.com/Security/2009/03/04/upgrading_the_south_korea-us_alliance/3491/

The important thing is not the legal right to conduct self-defense, but the real capacity to do so. In the international arena, pure self-defense that rejects any form of interdependence between countries would be almost unsustainable because of the burden of military costs and the tendency toward competitive increases in military spending between adversaries. An alliance spreads military spending among partner countries and allows them to invest more in economic growth and domestic affairs. This is the case in the North Atlantic Treaty Organization and the U.S.-Japan alliance. South and North Korea both have high military costs because of their mutual distrust and their competition for superior military status. The South Korea-U.S. alliance has effectively mitigated South Korea’s burden and exerted a deterrence effect on North Korea. Therefore, it is wise to acknowledge the necessity of a military alliance in which partner countries combine their rights and authority and find a balance between independent sovereignty and interdependent alliance. It is not a violation of South Korean sovereignty if the CFC head holds wartime command, as he cannot exercise it unilaterally. His authority is backed up by the presidents of South Korea and the United States, as well as the Security Consultative Meeting and Military Committee Meeting. This is guaranteed by Article 2 of the Mutual Defense Treaty between the Republic of Korea and the United States. Infringement of South Korean sovereignty could occur only if the United States neglected its obligation to consult with South Korea and proceeded with military action alone. Considering the deep-rooted trust between the two countries and the binding force of their mutual defense treaty, this is very unlikely. If the joint command ceases to exist as a result of the transfer of wartime command, the roles of the allies will change significantly. South Korea will take the leading role in military operations and the United States will cease to take the initiative. South Korea will also lose the guarantee of automatic U.S. military intervention in case of emergency. Consequently, the South Korean government will impose on itself the new responsibility of securing a military surge in time of emergency. This responsibility is burdensome in that South Korea will have to persuade U.S. forces to intervene swiftly and actively if they are needed. As long as the South Korea-U.S. alliance exists, the United States can be expected to provide military support. But the partial withdrawal of U.S. military forces means that South Korea cannot maintain the same level of military presence and deterrence over the North it has had so far. It will have to increase military spending to make up for the U.S. withdrawal.

Link – Defense Spending – Perception

Perception of a lessening US commitment to South Korea would cause a massive increase in defense spending.

Corey Richardson, Washington-based analyst who covered East Asian security issues as a presidential management fellow with the US Department of Defense, 9/6/2006, Asia Times, http://www.atimes.com/atimes/Korea/HI09Dg02.html

The current US-South Korea situation is a case of "be careful of what you ask for because you might get it". Even so, the psychological impact on South Korea of a significant USFK departure likely would not be immediate but should not be underestimated. A massive reduction of US troop levels and capabilities could have the same effect as a complete withdrawal on Seoul's planning processes. It might begin with regretful concern, but could quickly become panic. At this point it should be noted that even if the USFK withdraws from Korea, some sort of collaborative security agreement will remain in place. However, South Korea's perception of America's commitment to security on the peninsula is the decisive factor in how it will react to real and perceived threats. What are now relatively minor disagreements with Japan and China would take on a more serious dimension. Without USFK, South Korea would need to vastly increase its defense budget to make up for functions long taken for granted. With American forces on its soil as a safety net, South Korea didn't have to be overly concerned with being attacked or invaded. Many Koreans would perceive that era over.

Link – Defense Spending – Empirics

Historically, the US military presence determines the amount of South Korean defense spending.

Chung In Moon, professor of political science at Yonsei University, served as Dean of Yonsei's Graduate School of International Studies and as Chairman of the Presidential Committee on Northeast Asian Cooperation Initiative, & Sangkeun Lee, Ph. D. candidate specializing in North Korean politics at Department of Political Science, Yonsei University, former staff reporter at the Chosun Ilbo newspaper in Seoul, 3/28/2010, The Asia-Pacific Journal, http://www.japanfocus.org/-Chung_in-Moon/3333

Alliance effects also appear to have profound impacts on defense spending.38 When there was a strong U.S. security commitment, South Korea’s defense spending was minimal. But when the United States showed signs of disengagement or waning security commitment, South Korea proceeded to increase its defense spending. For example, the reduction of American forces in South Korea through the withdrawal of its 7th infantry division in 1971 prompted the Park government to increase rapidly its defense budget in the early 1970s. The phenomenal rise in defense spending from 1976 to 1979 can also be explained by alliance effects, as South Korea allocated six percent of its GNP in compliance with American demands of defense burden-sharing. The unexpected rise in defense spending during the progressive Roh Moo-hyun government was also closely related to alliance effects. Roh’s efforts to seek greater military independence from the U.S. led to an increase in military spending. Conversely, the conservative Lee government’s decision to reduce the defense budget is known to have been predicated on the restoration of strong alliance ties with the United States. Thus, the alliance factor has proven central to the patterns of defense spending in South Korea.

Link – AT: Defense Spending Helps the Economy

Defense spending doesn’t boost the economy – other spending works better, exports don’t generate profits, and arms races make it impossible to restrain.

John Feffer, co-director of Foreign Policy in Focus at the Institute for Policy Studies, 2/2009, Korea Economic Institute Academic Paper Series, 4:2, p.8, http://www.keia.org/Publications/AcademicPaperSeries/2009/APS-Feffer.pdf

The evidence, however, that government investments in the military—at a time of plenty or paucity—are the best growth stimulus is quite weak. Military investments produce jobs, generate some spin-off technologies, and take advantage of some spin-on developments. But other government investments contribute more to economic growth. Localization, meanwhile, does not make strict economic sense, given the opportunity costs, although establishing indigenous production for certain capacities, particularly in the software field, is reasonable.82 Arms exports, although they reduce the costs of localization through economies of scale and boosting the operating capacity of defense sector manufacturing, put South Korea in a difficult position of muscling into a highly competitive field. Arms exports often come with strings – such as reciprocal purchases. Moreover given the arms race dynamic in the region—and spending has taken place at a faster clip now than 15 years ago (Table 3)—government investments even into potentially lucrative arms export sectors can be counterproductive. And armaments, as the United States discovered with al Qaeda, have a tricky habit of ending up in the hands of those against whom increased military budgets are intended to protect.

Impact – South Korea Economy Good – East Asian Arms Race

South Korean economic decline causes a destabilizing East Asian arms race and nuclear conflict.

Corey Richardson, Washington-based analyst who covered East Asian security issues as a presidential management fellow with the US Department of Defense, 9/6/2006, Asia Times, http://www.atimes.com/atimes/Korea/HI09Dg02.html

A Korea faced with an economic dilemma of such magnitude would find maintaining its conventional military forces at current levels impossible. At the same time, it would feel more vulnerable than ever, even with US security assurances. For a nation paranoid about the possibility of outside influence or military intervention, strapped for cash, and obsessed about its position in the international hierarchy, the obvious route might be to either incorporate North Korean nuclear devices (if they actually exist), or build their own, something South Korean technicians could easily accomplish. North Korea, after all, has set the example for economically challenged nations looking for the ultimate in deterrence. One might argue that clear and firm US security guarantees for a reunified Korea would be able to dissuade any government from choosing the nuclear option. If making decisions based purely on logic the answer would be probably yes. Unfortunately, the recent Korean leadership has established a record of being motivated more by emotional and nationalistic factors than logical or realistic ones. Antics over Dokdo and the Yasukuni Shrine and alienating the US serve as examples. But the continuation of the "Sunshine Policy" tops those. Instead of admitting they've been sold a dead horse, the Roh administration continued riding the rotting and bloated beast known as the Sunshine Policy, until all that are left today are a pile of bones, a bit of dried skin, and a few tufts of dirty hair. Roh, however, is still in the saddle, if not as firmly after North Korea's recent missile tests. Japan must then consider its options in countering an openly nuclear, reunified Korea without USFK. Already building momentum to change its constitution to clarify its military, it's not inconceivable that Japan would ultimately consider going nuclear to deter Korea. As in South Korea, there is no technological barrier preventing Japan from building nuclear weapons. While the details of the race and escalation of tensions can vary in any number of ways and are not inevitable, that an arms race would occur is probable. Only the perception of threat and vulnerability need be present for this to occur. East Asia could become a nuclear powder keg ready to explode over something as childish as the Dokdo/Takeshima dispute between Korea and Japan, a Diaoyu/Senkakus dispute between China and Japan, or the Koguryo dispute between Korea and China.

Impact – South Korea Economy Good – Key to the G20

Lee’s poised to host the G20 – South Korean growth provides the basis for his leadership.

Newsweek, 01/2010, “Selling South Korea”, http://www.newsweek.com/2010/01/28/selling-south-korea.html

Now President Lee Myung-bak wants to turn the end of the economic crisis into an opportunity. He knows the crash has accelerated the decline of American might, as well as the rise of China and other emerging powers, and he aims to exploit the gap between them. His goal is to transform South Korea from a successful but self-involved economic power into a respected global soft power with the clout to mediate between rich and poor nations on global issues such as climate change and financial regulation. In particular, Lee is pushing to revive momentum on a global free-trade deal—stalled in large part due to hostility from poor nations—while defending the poor by pushing for more international supervision of the global financial system. At the same time, he is trying to establish South Korea as a leader in the fight against global warming by agreeing that the country will cut emissions by 30 percent by 2020—one of the most aggressive targets in the world—even though it is not obligated to do so because it is still considered a developing nation under the Kyoto Protocol. To many in South Korea, the selection of Seoul as the site of the November 2010 summit of the G20—the group of 20 leading economic powers—is an acknowledgment of how well it has managed the current economic and environmental crises. "The old order is being dismantled and replaced by the new order," Lee said from the Blue House in a televised New Year's speech. "We have to make our vision the world's vision."

South Korean leadership is key to a successful G20.

Stephen Snyder Director of the Asia Foundation’s Center for US-Korea Policy 9/30/2009 “Korean leadership in the G20 and the U.S.-ROK alliance” http://www.eastasiaforum.org/2009/09/30/korean-leadership-in-the-g20-and-the-us-rok-alliance/ PHK

South Korea’s great challenge and opportunity is to show that the G20 can maintain effectiveness even as the crisis subsides and to ensure that this is not a ‘crisis wasted,’ by carrying through on reforms that will prevent the recurrence of such crises. In the future, challenges for the Pittsburgh meeting include consideration of measures to counter rising unemployment or inflation in the global economy while laying the foundations for sustainable and balanced global growth. South Korea’s proposals going into the meeting include the mobilization of IFIs to produce recommendations for post-crisis global economic management, the establishment of a trust fund to expand access by developing countries to financial assistance in times of financial crisis, kick-starting the Doha round of trade negotiations, and reaffirming ‘standstill’ and ‘rollback’ commitments against protectionism. Mo Jongryn of Yonsei University argues that the rise of the G20 – and South Korea’s assumption of leadership in the G20 – is an opportunity for Asia to show leadership that redresses Asia’s past under-representation in proportion to its economic weight in the international community. He also argues that such an opportunity may be lost unless Asians themselves show more cohesion and distinctive contributions in the face of the economic crisis. The G20 is a venue that gives Asians a seat at the table, but such an opportunity will be wasted unless Asians deliver in providing a distinctive and effective agenda. South Korea must infuse its G20 chairmanship with substantive and effective leadership if the G20 is to cement its role as the main venue for expanded economic coordination. South Korea’s handling of its G20 chairmanship is a make or break opportunity on many different levels. The pressure is on South Korea to show that it can live up to the task by catalyzing global coordination of exit strategies from the crisis and by addressing global imbalances between developing and industrialized countries. Expanded U.S.-ROK alliance coordination to address global economic issues will continue to be a cornerstone of South Korea’s efforts.

Impact – South Korea Economy Good – Key to the G20

The South Korean economy is critical to the success of the G20.

Kim Soo-ae Writer for Korea Magazine 11/05/2009 “Korea in the G20: A new era of leadership” http://www.korea.net/detail.do?guid=26243 PHK

Marcus Noland, deputy director and senior fellow at the Washington-based Peterson Institute for International Economics, told media that Korea’s hosting the summit next year will be an opportunity akin to the Seoul Olympics in 1988. "[This] is an opportunity for Korea to demonstrate its strengths to the rest of the world, and that can only have a positive impact on Korea’s economy in the long run," Noland said. The scholar attributed Korea’s successful bid to the hard work of the Lee administration and the growing stature of the Korean economy. Korea has experienced the world’s fastest recovery and has taken a leading role in setting an agenda that includes green development and anti-protectionism. "Diplomatically, Korea’s hosting of the G-20 next year is a big deal," he said. "Korean policy makers are considered highly capable and the rest of the world is looking for good things to come out of the summit that Korea will host." Korea’s five influential business organizations also hailed the hosting of the summit. "The selection of South Korea as a venue for the G-20 summit next year means the nation’s role is rapidly expanding in the international community," the business groups said in a joint statement. "It was one of the greatest achievements for the nation’s diplomatic history." The business groups included the Federation of Korean Industries and the Korea Chamber of Commerce and Industry. Next year’s G-20 summit schedules are also arranged in order to make optimal use of a scarce resource: the global leaders’ time. In June, Canada was scheduled to host the G-8 summit, and hosting the G-20 within the same time frame is expected to significantly curtail the amount of travel world leaders have to undertake.

Impact – G20 Good – Doha – Protectionism

Successful G20 meeting in South Korea is key to successfully concluding the Doha round.

Press Trust of India, Largest news agency in India, 6/28/2010, “G-20 leaders for early conclusion of Doha trade deal,” http://www.mydigitalfc.com/policy/g-20-leaders-early-conclusion-doha-trade-deal-683 PHK

In their declaration yesterday after a two-day summit here, the leaders of G-20 nations, including Prime Minister Manmohan Singh, extended support for bringing the Doha Development Round talks of World Trade Organisation to a balanced and ambitious conclusion as soon as possible. The World Trade Organisation, had launched a negotiating round at the Qatari capital in 2001 to reach a new trade agreement for opening the world commerce. But differences over market access and protection to industry by the developed and developing nations have stalled the deal among 153 WTO member countries. Negotiators have missed several deadlines and a new ambition to conclude the agreement within this year appears difficult to achieve. "We direct our representatives, using all negotiating avenues, to pursue this objective and to report on progress at our next meeting in Seoul, where we will discuss the status of the negotiations and the way forward," the declaration said. The Seoul summit is scheduled on November 11-12 this year.

That’s key to hold of protectionism.

Japan Economic Newswire, Asian Economy Newspaper 11/15/2008 “G-20 leaders reject protectionism, pledge to avoid new trade barriers” http://www.tmcnet.com/usubmit/2008/11/15/3791128.htm PHK

Leaders of the G-20 economies also included a commitment to work towards a framework for the year-end target to conclude divisive global trade talks of the WTO's Doha Round, which collapsed in Geneva in July due mainly to discord between the United States on one side and China and India on the other. "We shall strive to reach agreement this year on modalities that leads to a successful conclusion to the WTO's Doha Development Agenda with an ambitious and balanced outcome," the declaration said. But the statement fell short of specifying when the trade ministers will meet again to revive the long-running free trade negotiations. Japanese Finance Minister Shoichi Nakagawa admitted opinion on the WTO negotiations is still divided, but said adverse economic conditions and the challenges in reaching a year-end agreement underscored the need for top-level reaffirmation of a commitment to the trade talks. "(We agreed) now is the time to quickly start WTO (negotiations)," Nakagawa told reporters in Washington, citing fears of exclusionism due to the recent economic and financial turmoil. "Each country confirmed the resolve to work toward holding ministerial- and top-level (talks) for a new round of WTO (negotiations) as early as possible," he said. The sharp tone against protectionism is a key element of the financial summit repeatedly highlighted by Bush, who has been visibly wary of growing calls for more government intervention and tighter regulations on the crippled financial system, particularly by European nations.

Protectionism causes nuclear war.

Michael Spicer, Member of the British Parliament in the House of Commons, 1996, The Challenge from the East and the Rebirth of the West, p. 121

The choice facing the West today is much the same as that which faced the Soviet bloc after World War II: between meeting head-on the challenge of world trade with the adjustments and the benefits that it will bring, or of attempting to shut out markets that are growing and where a dynamic new pace is being set for innovative production. The problem about the second approach is not simply that it won't hold: satellite technology alone will ensure that he consumers will begin to demand those goods that the East is able to provide most cheaply. More fundamentally, it will guarantee the emergence of a fragmented world in which natural fears will be fanned and inflamed. A world divided into rigid trade blocs will be a deeply troubled and unstable place in which suspicion and ultimately envy will possibly erupt into a major war. I do not say that the converse will necessarily be true, that in a free trading world there will be an absence of all strife. Such a proposition would manifestly be absurd. But to trade is to become interdependent, and that is a good step in the direction of world stability. With nuclear weapons at two a penny, stability will be at a premium in the years ahead.

Impact – G20 Good – Doha – Japan Economy

Successful G20 meeting in South Korea is key to successfully concluding the Doha round.

Press Trust of India, Largest news agency in India, 6/28/2010, “G-20 leaders for early conclusion of Doha trade deal,” http://www.mydigitalfc.com/policy/g-20-leaders-early-conclusion-doha-trade-deal-683 PHK

In their declaration yesterday after a two-day summit here, the leaders of G-20 nations, including Prime Minister Manmohan Singh, extended support for bringing the Doha Development Round talks of World Trade Organisation to a balanced and ambitious conclusion as soon as possible. The World Trade Organisation, had launched a negotiating round at the Qatari capital in 2001 to reach a new trade agreement for opening the world commerce. But differences over market access and protection to industry by the developed and developing nations have stalled the deal among 153 WTO member countries. Negotiators have missed several deadlines and a new ambition to conclude the agreement within this year appears difficult to achieve. "We direct our representatives, using all negotiating avenues, to pursue this objective and to report on progress at our next meeting in Seoul, where we will discuss the status of the negotiations and the way forward," the declaration said. The Seoul summit is scheduled on November 11-12 this year.

Doha will keep the Japanese economy afloat

Pascal Lamy, director-general of the World Trade Organization, 2/25/2009, Lamy Underscores Doha Round Benefits for Japan, p. 3 PHK

WTO and the Doha Round are vital for Japan This is the time to invest in the WTO and strengthen the global rules-based system which has so carefully been constructed over the last 60 years. Strengthening the multilateral trading system is in Japan's interest, given Japan's high dependence on trade for its economic growth. I was just looking at the figures which show that over the last five years up to 2007, the share of Japan's exports on its GDP grew faster than that of imports. The Japanese economy has thus become more dependent on net exports. The WTO remains Japan's most important platform for securing a favourable global trading environment and the Doha Round continues to be the most efficient means to achieve large-scale market opening for Japan. What can a successful conclusion of the Doha Round bring to Japan? I know that this is a question that many of you ask. First, it will bring better market access conditions for Japan. Average tariffs would be halved as a result of the round. This would mean saving in tariffs of over US$ 150 billion annually once the Doha Round is fully implemented. This is without the new trade flows which would be created as a result of tariff cuts. Services is another area which holds promise for Japan. The signalling conference that we hosted last July gave encouraging signs of the potential this negotiation holds in this important area; not to mention trade facilitation or disciplines on anti-dumping, on which Japan has spent a lot of its energy.

Japan economy directly related to US economy and global economy

Emma Chanlett-Avery, Coordinator Specialist in Asian Affairs, 11/25/2009 Japan-U.S. Relations: Issues for Congress. PHK

Japan is one of the United States’ most important economic partners. Outside of North America, it is the United States’ second-largest export market and second-largest source of imports. Japanese firms are the United States’ second-largest source of foreign direct investment, and Japanese investors are the second-largest foreign holders of U.S. treasuries, helping to finance the U.S. deficit and reduce upward pressure on U.S. interest rates. Bilateral trade friction has decreased in recent years, partly because U.S. concern about the trade deficit with Japan has been replaced by concern about a much larger deficit with China. The exception was U.S. criticism over Japan’s decision in 2003 to ban imports of U.S. beef, which have since resumed. However, the economic problems in Japan and United States associated with the credit crisis and the related economic recession and how the two countries deal with those problems will likely dominate their bilateral economic agenda for the foreseeable future. Japan has been hit particularly hard by the financial crisis and subsequent recession. Japan’s gross domestic product (GDP) declined 0.7% in 2008 and is projected to decline by 6.2% by the end of 2009 with a modest rebound expected in 2010. At the same time, the United States is showing some signs of recovery, at least according to some indicators.

Impact – G20 Good – Green Growth Strategy

Korean leadership and a successful G20 are key to the Green Growth Strategy.

Angel Gurría, OECD Secretary-General 11/17/2009 “The Korean G-20 leadership: Assessing the key issues for 2010 - New sources of sustainable and balanced growth” http://www.oecd.org/document/18/0,3343,en_33873108_33873555_44080146_1_1_1_1,00&&en-USS_01DBC.html PHK

A year ago the global economy was on the brink. Today, thanks to massive macroeconomic support and swift actions to stabilise financial markets a recovery is now underway. Avoiding the worst outcome required courage and leadership at the national level. But it also required increased cooperation in the international context and the emergence of the G20 as a premier forum for economic discussions and action. These are good news for the world economy. Having been one of the founders of the G20 more than ten years ago, I believe this is the right setting to discuss global issues. The fact that Korea will be chairing the next Summit is a great source of confidence. Former Korean Prime Minister Han Chaired the 2009 Ministerial Meeting of the OECD. We enjoyed working with such a committed and well organised team and reached meaningful outcomes. Under the Korean leadership, we launched our Green Growth Strategy, which aims to achieve a sustainable recovery based on a low carbon economy. It can surely become one of the pillars of a robust G20 agenda.

Green Growth is key to the economy and solves warming.

Angel Gurría, OECD Secretary-General 11/17/2009 “The Korean G-20 leadership: Assessing the key issues for 2010 - New sources of sustainable and balanced growth” http://www.oecd.org/document/18/0,3343,en_33873108_33873555_44080146_1_1_1_1,00&&en-USS_01DBC.html PHK

Green growth has emerged as a strategic priority for countries worldwide, putting forward a new paradigm that would enable economic growth and development, prevent environmental degradation and enhance quality of life. Green growth is about promoting economic growth and development while reducing pollution and greenhouse gas emissions, promoting the efficient use of natural resources, and maintaining biodiversity. It means making investments in the environment a driver for growth and development. We are convinced that the conversion of our economies into low carbon economies can be an important source of growth and employment. The OECD was mandated to develop a Green Growth Strategy to help governments identify the policies, the incentives and the frameworks that can achieve clean, resource efficient, low carbon economic growth and development. Achieving the objectives of green growth will require a broad and flexible mix of instruments that cut across several policy areas (e.g. investment, taxes, innovation, technology, trade, employment and education), and applied in a way that ensures coherence and avoids costly overlaps. Countries will need structural reforms to achieve green growth. Green tax reforms and price based approaches -- such as carbon taxes, auctioned permits in cap and trade schemes as well as the removal of harmful fossil fuel subsidies, are one element of necessary policy reforms. Taxes and auctioned permits can also help to bring in revenues to invest in energy efficiency to offset reductions in other taxes or to contribute to fiscal consolidation. Carbon taxes are also under consideration or planned in many countries as well as other environmentally-related taxes. It is also encouraging to see many governments placing “green” investments at the heart of their own crisis-response strategies, as well as looking at the international co-operation needed for green investments globally. Tackling climate change is a fundamental part of achieving green growth. And financing the fight against climate change will be a key element of a successful commitment in Copenhagen. The OECD has built up considerable experience in this area. We are examining how to scale-up public and private financing flows, as well as working on robust and transparent measurement, reporting and verification systems for finance that will be needed to ensure accountability. The Development Assistance Committee at the OECD has been tracking bilateral aid flows for climate change mitigation for over a decade, and will initiate the same monitoring for adaptation. Ladies and gentlemen: The global economy is on the threshold of a major transformation. G20 leaders have fully committed to supporting new sources of balanced and sustainable growth. No single country or group of countries will succeed on their own; this is a task where we all have to join forces. And though governments must lead the way, they need the support of international organisations and professional groupings like the IIF and of civil society representatives. The OECD is ready to support this endeavour. Our strong track record of evidence-based analysis and policy advice, and the wealth of information and knowledge accumulated over many decades are at the full disposal of all G20 governments. Only together can we rise to the challenge and tap the sources of a stronger, cleaner and fairer world economy of tomorrow. Thank you for your attention.

Impact – G20 Good – Green Growth Strategy

Warming causes extinction.

Peter Ward, professor of Geological Sciences at University of Washington, 2008. “Under a Green Sky: Global Warming, the Mass Extinctions of the Past, and What They Tell Us About Our Future”, p. 165

Greenhouse gases strongly affect planetary temperature. As carbon dioxide levels rise, so will planetary temperature. Because the heat budget of the Earth is complicated by the effects of the oceans, land, and especially currents (water and air), there is not a linear relationship between carbon dioxide rise and global temperature. The rule of thumb used by climatologists is that each doubling of the carbon dioxide level can be expected to increase global temperatures by about 2 degrees Celsius. Thus the projected carbon dioxide level even for a century from now would be expected to increase the global temperature between 3 degrees and 4 degrees Celsius. Today that temperature is estimated to be between 15 degrees and 16 degrees Celsius. It would climb to just beneath 20 degrees Celsius. The effect of that would be Earth-changing, conceivably bringing about the greatest mass death of humans in all of history.

Impact – AT: South Korean Economy Resilient

Even a minor shock could doom South Korea’s economy.

Aidan Foster-Carter, honorary senior research fellow in sociology and modern Korea at Leeds University, 7/23/2010, Asia Times, http://www.atimes.com/atimes/Korea/LG23Dg01.html

This phase will make an excellent case study for students of politics and media. On many counts, this was smart. By defusing tensions, it bought time for a considered response. The risks were many. Short of the apocalypse of a new Korean war, which a hasty reaction could have risked - as it was, the Cheonan's sister ship Sokcho did fire at something, supposedly a flock of birds - in a large open economy like South Korea even slight fears can roil markets and spook investors. Besides, at this stage there was genuine room for doubt as to the cause. The Cheonan might have hit a mine, or a reef; or its own ordnance could have exploded.

Aff – No Impact – South Korean Economy Resilient

South Korea’s economy is among the most resilient in the world.

Global Finance Magazine, Thomas Clouse, 3/2010, “South Korea; Rate Decision Sparks Fears Of Political Meddling”, Lexis, AT

Few economies have proven as resilient over the past 18 months as that of South Korea. In the wake of Lehman Brothers' collapse, foreign investors fled, exports plunged, the Korean won sank, and the economy contracted sharply. The central bank cut rates quickly and often in the months that followed, while the government introduced stimulus measures. By the third quarter of last year, private spending had increased, exports were up significantly, and the economy grew by a seven-year-high quarterly rate of 3.2%. Many economists predicted that South Korea would be the first Asian country to begin rolling back its accommodative monetary policy. Korea's central bank decided last month, however, to keep the seven-day repurchase rate, the country's key interest rate, at 2% for the 12th month in a row. The bank based its decision on the fact that GDP growth slowed to 0.2% in the fourth quarter, and January unemployment rose to 5%, its highest rate since March of 2001. Public debt crises in Europe further clouded Korea's economic outlook, the bank says. Other figures offered more optimistic evidence, though. Exports grew by 47.1% year on year in January, while industrial production expanded by 33.9% year on year in December. Both figures were at their highest level in more than a decade. In addition, the fourth-quarter year-on-year growth stood at 6%. With these indicators in mind, some observers are suggesting political considerations could be weighing on the central bank's decision to keep rates low.

South Korea’s economy’s resilient.

David Jolly, NYT (New York Times), 6/26/2009, http://www.nytimes.com/2009/06/27/business/global/27spot.html

He said South Korea was the only member of the O.E.C.D. to post positive growth in the first quarter of 2009 from the last quarter of 2008. Mr. Han said the country had been relatively resilient because “our economic fundamentals are very sound” — the country’s ratio of debt to gross domestic product, at just over 30 percent, is well below the O.E.C.D. average of 83 percent — “and we learned our lessons in the Asian crisis 10 years ago.”

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