Hagerty: Goal remains the denuclearization of North Korea

William Hagerty, the U.S. ambassador to Japan, made clear that the goal of President Donald Trump’s administration is the denuclearization of North Korea through any means possible.

“The goal has been very simple and it remains the same, and that’s the denuclearization of North Korea,” Hagerty said in an interview with The Asahi Shimbun in Tokyo on Oct. 27. “We’re going to use every tool available to us.”

Hagerty also said that security issues, including “freedom of navigation” in the Pacific Ocean, will be a main theme at the Japan-U.S. summit in early November when Trump visits Japan.

In the economic field, Hagerty said Japanese companies would benefit by making more direct investments in the United States, and that would also help to reduce the U.S. trade deficit. He has met with approximately 70 CEOs of Japanese companies one-on-one since he became ambassador in Augest.

The following is the interview with Hagerty.

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Question: Vice President Mike Pence and Japanese Deputy Prime Minister Taro Aso are currently advancing the U.S.-Japan economic dialogue. What are your expectations from the Japanese side?

A: I’d like to put my perspective into context, if I might, because when I lived here more than two decades ago, the economic and trade situation with Japan was characterized more by friction, whereas today I feel a great sense of cooperation. And that sense of cooperation was manifest in the meeting last week in our bilateral dialogue in Washington, D.C.

There is a warm relationship between the vice president and the deputy prime minister. I think there is no better relationship than the one between Prime Minister (Shinzo) Abe and President (Donald) Trump, in the world today, among two world leaders.

In terms of specific expectations, Vice President Pence made it very clear to me that he is more interested in progress than process. These dialogues can very often get caught up in a great deal of process, and for understandable reasons we need to touch every base.

But what the vice president is looking for is direct and explicit results, and I’m very optimistic on several fronts.

The trade deficit was a topic of the discussion, and the trade deficit has been persistent since I lived here almost three decades ago. I think that the bilateral dialogue will help us work on the trade deficit in a way that will be material and significant.

The area where I see opportunity, first on the side of streamlining and making a better set of rules for how trade is undertaken today, Ambassador (Robert) Lighthizer laid out a number of opportunities there that his team will be pursuing with the Japan side.

There are specific issues with respect to automobiles, with respect to pharmaceuticals and medical devices, and also with respect to agriculture, where I think we will see progress on each of those dimensions.

The other area where I think we can make a significant difference is in foreign direct investment.

Q: Which areas of Japanese investment do you expect the most from, such as the liquid natural gas industry or perhaps infrastructure development and possibly a bullet train system?

A: You’ve mentioned several projects that I think will be very interesting. Liquid natural gas, highly efficient clean coal. We have areas in nuclear energy where we can cooperate, both on the decommissioning of some of the nuclear facilities here but also in new processes and new technologies.

There also is a great deal of interest in the transportation sector, as you know. There’s a project that’s been proposed in Texas, a Shinkansen. There is also a project in the East Coast, a maglev project, and there is a great deal of interest in both of those.

I would say this, from my personal perspective and from Vice President Pence’s personal perspective: We’re also interested in foreign direct investment to a great extent. This is my ninth week in Japan as ambassador. So far, I’ve met with approximately 70 CEOs one-on-one, 70 CEOs of Japanese companies that make foreign direct investment in the United States.

As I speak with them, I talk with them about the enhanced returns on investment that I expect to be coming from the U.S. economy. One, our economy is growing. That’s important. Two, the administration is undertaking significant efforts to streamline the regulatory processes in the United States. By making compliance costs lower, I think we will increase the return on investment.

I am also very optimistic about tax reform, corporate tax relief. The president is very focused on this, and I think he will be talking about this more, but if the tax reform goes through as planned, again, that will enhance return on investment, making the U.S. market more attractive.

By encouraging companies that are investing in the United States to increase their investment, I’m also focused on improving the trade deficit that’s been so persistent, because many companies in Japan produce far more goods here than are sold in the domestic market.

There is a great opportunity to produce goods in the United States that are consumed in the United States. By doing that, you take a great deal of business risk away. Currency risk obviously goes away. You have logistics cost advantages. And you also, indirectly, rectify the trade deficit. Obviously, if you produce in the United States rather than export to the United States, that will have a significant impact on the trade deficit.

So, I am very optimistic that the president will talk about foreign direct investment when he’s here, and I’m also very optimistic that we’re going to have some very interesting things to discuss, in terms of new projects, that would be taking place in the United States, along those lines.

Q: During President Trump’s visit to Japan that will take place soon, does the U.S. want to propose a bilateral free trade agreement with Japan? As you know, Vice President Pence expressed his strong interest in a U.S.-Japan FTA during the economic dialogue.

The U.S. has already started renegotiations of the North America Free Trade Agreement and other things. Given the fact that the U.S. has already spent so many resources on them, does the U.S. really want to start FTA negotiations with Japan now? And if so, when do you think would be the appropriate time to start?

A: Well, Vice President Pence, as you mentioned, has taken the lead on this. He is the leader from our side on the bilateral dialogue. And I think the overarching point that Vice President Pence made is he wants to see specific progress, again, not process.

And what I expect the president to talk about with the prime minister and maybe talk more openly with the business leaders that he meets with are many ways to deepen and improve the bilateral economic relationship that we have with Japan.

I think there will be a good deal of focus. He’s going to meet with a significant number of Japanese business leaders. That’s our goal. And I think what he will hear is a broad-ranging discussion of the many ways that we can deepen our bilateral economic relationship.

You have mentioned several of them, in terms of investment opportunities, whether it’s foreign direct investment or new projects that would occur in the United States using Japanese technology.

We’ve also talked about areas that have been persistent issues for us, whether it be the transparency of the pharmaceutical pricing and medical device pricing situation here. For United States companies that innovate in that area, they have a high interest in that process that’s under way in Japan right now.

We are also very focused on access issues, whether it be for products like automobiles, and a significant number of issues regarding agriculture.

But in terms of the specific timing, I’ll leave that to the president to talk about that when he’s here, and I think that Ambassador Lighthizer might join the president on the trip. We’ll let you know more specifically as that comes.

Q: So, you don’t know whether or not the president will bring up the FTA issue during the coming summit?

A: I know he’s going to bring up bilateral economic issues. In terms of the specifics of that, I’m not certain what he’ll bring up with the prime minister. I don’t want to jump ahead of the president, if you know what I’m saying.

Q: As you said, the trade deficit is a big problem, and the Trump administration is focused on reducing the bilateral trade deficit. So does the U.S. want to see more defense spending by the Japanese government, including more defense-related imports?

A: Let me be very clear about this. Our interest in defense spending by the Japanese government is not about the trade deficit. It’s not about the trade deficit. What it’s about is advancing capabilities and interoperability. We see the same threats that the government of Japan sees in the region, and we want to extend our force presence. And, by having increased defense expenditures, it’s not a goal of having just expenditures go up; it’s a goal of increasing capability. That’s the goal.

It’s not about the trade deficit. It’s not about an arbitrary number or a percentage of GDP; what it’s about is increasing interoperability and capability, and I think that that will be a topic that President Trump and Prime Minister Abe will discuss.

Q: Concerning the strengthening of defense capability, what kind of military equipment would you expect Japan to purchase? Aegis Ashore or Global Hawk?

A: By the end of 2018, the Japan Air Self-Defense Force will have more F-35 aircraft than any other partner in the world. They will be the first international purchaser of the KC-46A, which is an aerial refueling aircraft.

On the missile defense front, we’re working very closely on the modernization and expansion of the Aegis destroyer platform.

We’re also focused on expanding reconnaissance capability. That’s the Global Hawk and the Hawkeye.

So, all of those things, I think, lend themselves to an enhanced capability and interoperability, and they are, indeed, the most advanced technologies that we have available, and I am so pleased that we are in the process of sharing those.

Q: Although the Trump administration reiterated the importance of Asia for the United States, it has not published a strategic vision for the region like the “rebalance to Asia” policy of the Barack Obama administration. Where does Japan fit in with regard to U.S. strategy in the region? Does the Trump administration have plans to provide a comprehensive strategy toward Asia?

A: If I think about the trip that’s coming up, the president is going to spend more time in Asia than any place he’s ever gone. This will be the longest trip that he’s taken as president. I think that that underscores the importance that this administration places on this part of the world, and I’m very pleased that the first stop is Japan.

The free and open Indo-Pacific region, I might refer you to a speech that the secretary of state gave maybe 10 days ago, back in Washington, at CSIS, where he went through a specific number of opportunities that he sees in the region. But, as I look at it, I think you’re going to see expanded cooperation, with the U.S.-Japan alliance as a cornerstone but also bringing India, Australia and other countries into the discussion, and we view it as very strategic.

I would also just like to talk about the president’s trip for a minute. The first stop is Japan, of course, where we’ll focus very much on our alliance, and I think the “free and open Indo-Pacific” will be a big topic.

The president will go to the Republic of Korea from here, and there he’s going to talk about the enduring strength of the U.S.-ROK alliance, and that’s become even stronger in the face of the threats from North Korea.

The next stop will be Beijing, and there he’s going to have a series of both commercial and cultural events, but I feel certain that he will be talking with President Xi (Jinping) about China’s commitments to exert more pressure on the North Korean regime, and also ways to rebalance our economic relations. That’s what I would expect in Beijing.

The president will then go on to Vietnam, and there he’s going to attend the APEC CEOs summit. And I think there he’ll be talking more broadly about our desire to pursue an equitable, sustainable, international economic system, a system that’s underscored by market principles, and underscoring the fact that this region of the world, that Southeast Asia, plays a critical part in America’s view of prosperity, of economic prosperity.

I think it will be a positive and uplifting message that he delivers, and what I think will become very clear at the summit is that America is open for business, trade, and dialogue in this region.

He then makes the final stop in the region, in Manila, to the Philippines, where they celebrate the 40th anniversary of the ASEAN. And there, I think he will, again, talk about the importance of our relationship and the importance of this region in the U.S. overall global strategy. So I’m very optimistic that his trip will have the effect of not only using words, but deeds, to demonstrate the commitment that we have to the region.

Q: As we see North Korea continue with provocative actions, such as nuclear tests and missile launches over Japan, the United States has already said that “all options are on the table,” implying military action but also direct negotiations with the DPRK. However, experts like former Secretary of Defense Robert Gates have said that you cannot get the DPRK to give up their nuclear weapons. What is the goal of the United States and what is the best approach to take toward North Korea?

A: The goal has been very simple and it remains the same, and that’s the denuclearization of North Korea.

Q: However, some experts point out it will be difficult to get North Korea to dismantle, but not suspend, its nuclear program.

A: I’m aware of the expert opinions, but I will go back to our goal, which is denuclearization, and we’re going to use every tool available to us. And to be clear, this is a process that’s gone on for more than 20 years, back to the mid-1990s. We have gone through a process of dialogue. We’ve gone through a process of providing economic incentives. We’ve gone through a process of “strategic patience.”

What has remained true through all of that is that the North Korean regime has never stopped their effort to develop a nuclear capability. So, where we are today is moving away from that, moving away from dialogue, and focusing on diplomatic solutions. And I think it’s the most substantial shift that we’ve seen in decades.

What has happened is that, on a unanimous basis, the United Nations Security Council has stepped up, increasingly stepped up, pressure, through sanctions. Russia and China are standing by our side with these sanctions. We have unanimity. And that is a major shift in the direction of putting pressure to cease the nuclear ambitions of North Korea.

So, I am not so naive to think that it’s going to happen immediately, but I think that the pressure will continue to mount, it will continue to have its impact.

I think the president’s presence here in the region will make a significant difference. I think that China can play a very significant role, and I suspect that that will be part of the conversation between President Xi and President Trump.

So, what we’ve seen is a major shift toward a series of diplomatic options that are having great effect, in my view, and I think the president is very clear that all options remain on the table.

Q: If North Korea possesses nuclear weapons, the Asian security environment will be changed and will encourage voices calling for Japan and South Korea to explore the possibility of obtaining their own independent nuclear weapons. What is your opinion on Japan possessing its own nuclear weapons or changing its three non-nuclear principles?

When President Trump met with Prime Minister Abe in September in New York, he said that the United States will defend Japan with the full range of its military capabilities. Does this mean that an extended deterrence, or the so-called “nuclear umbrella,” will continue to hold in the future?

A: On extended deterrence, the answer is an unqualified yes. With respect to the issue of nuclear capabilities in other countries, like Japan and South Korea, I remind you, Japan and the U.S. are partners in upholding the Nonproliferation Treaty, and that has not changed.

But I am very confident and comfortable in the fact that our extended deterrence remains our policy, and the president has indicated no change in that position. And so I think, as I said, that’s an unqualified yes in terms of Japan’s ability to rely on us.

Q: From a security or defense cooperation perspective, what do you expect from the summit between the United States and Japan next week?

A: I think that security will be a front and center topic in the discussions. Japan and the United States share the same concerns with regard to the security in the region. We share the same principles. And we have the same goals, in terms of denuclearization of the region.

So, I think that it will be one of the foremost topics of discussion between President Trump and Prime Minister Abe, and I also think that it will be the area of absolute maximum alignment in their viewpoint.

Q: The Trump administration has a plan to increase the number of U.S. naval ships from 276 to 355. Do you have a vision to deploy more naval and Air Force assets to this region? I would also like to hear your view on how the Trump administration’s Asia policy is different from Obama’s policy.

A: I think the first point of differentiation, if you don’t mind me going back, is that we have moved beyond “strategic patience.” And what we’ve done is focused very heavily on getting unanimous consent on the world stage, at the U.N.

My colleague, Nikki Haley, and her counterpart from Japan, have worked tirelessly in New York to bring along sanction upon sanction. My friend, Steven Mnuchin, the secretary of treasury, is working very hard with his counterparts in China to make certain that the sanctions are upheld. They’re talking with the banks. They’re making it a very simple choice: “You can do business with North Korea or you can do business with the United States.” I think you know what the answer is going to be.

But what we’re doing, in a very aligned fashion, is we’re stepping up pressure on a global basis, and we have cooperation on a global basis. That is a major force shift forward.

The other thing that I think we all know is that no option has been taken off the table. So, you’re pointing toward military options, and the full range of options, both conventional and nuclear, are available. The president has not limited that in any way.

My expectation is that we will continue to work with Japan on increasing the Japanese capability and interoperability as we continue to focus on our own. As you know, our budget is going up, and I think that’s going to be true on a global basis. You’re going to see our military capability rise both in the Pacific region and on a global basis.

I am very reluctant to get into a specific strategy topic for publication, as you can imagine. But I think it’s obvious as we increase our asset base that that’s going to be felt on a global basis in increased presence, yes.

Q: As ambassador, do you have any thoughts on visiting the two atomic bombed cities of Hiroshima and Nagasaki, as your predecessor did, attending the Peace Memorial ceremonies held in August? And do you think there is any possibility that President Trump would visit Hiroshima, as President Obama did?

At the end of last year, Prime Minister Abe visited Pearl Harbor to pay his respects to the dead there. What are your thoughts on the significance of American and Japanese leaders reconciling and overcoming history this way?

A: Can I make this a little personal? My residence has played host to a number of important visitors over the years. Today, when I stand in these rooms, I reflect on this history and the foundation we laid to create the strongest bilateral partnership that exists today.

Together, we changed the world, by making the decision to work together and to become allies and friends. That happened in that house where we live. When I reflect on this history, it touches me every day.

The world changed, and it changed in a very positive way for our countries, when the decision was made to work together to build Japan and build our bilateral alliance in the most constructive manner possible.

I think it was maybe the third weekend that we were here, I took my children to Ueno Park. There is a flame that burns there, and I tried to explain to my children why that flame was there. It’s in respect of the lives lost in Hiroshima and Nagasaki.

I was fortunate to have the mayor of Nagasaki and the vice mayor of Hiroshima come to visit me several weeks ago. We talked about the annual peace ceremonies, and I told them that it’s a big priority of mine to visit both cities. So, I’m looking forward to doing that.

My predecessors, Ambassador Roos and Ambassador Kennedy, have both done that, and I look forward to doing the same, to show my respect.

With respect to the president’s schedule, I know that was one of the questions that you have, he has a very tight schedule moving through Asia, so I don’t know that that’s possible to make a trip anywhere outside of Tokyo on this trip. But, as his representative in Japan, I look forward to visiting both cities.

Q: President Trump often has phone calls with Prime Minister Abe, and, as you know, they are going to golf together in Japan. From your perspective, how important is this kind of special relationship for President Trump?

A: It’s very important. I have described it as a series of firsts. If you let me tell a little story, the very first phone call that President Trump received from a head of state was from Prime Minister Abe. The very first visit that he had from a head of state was a few weeks after the election, at Trump Tower, from Prime Minister Abe. I was there. It made a huge impression on the president, that the prime minister made the effort to come over.

And I think that led the president to say, “I want the first summit that I hold with a foreign leader to be with Prime Minister Abe,” which as you know is true.

I think it’s very important to have the highest level of trust, and spending time together, whether it be playing golf or doing any other type of activity, I think it’s important for them to have that type of personal quality time together.

So, I think it’s very important that the personal relationship is deep. I admire both men for working on that and continuing to deepen their relationship.

Q: President Trump underscores the importance of an open and free Indo-Pacific region. What does he mean by “an open and free Indo-Pacific region,” and how important is it, especially with China rapidly expanding its military power in this region?

A: In the 30 years since I have been here, there has been a pretty significant change. Not quite 30 years. But when I was here more than 25 years ago, comparing that to today, if you asked me what’s the biggest change in our thinking about the region, it’s China.

China was not as significant a factor in our thinking, 25-plus years ago. That has changed. They have expanded their military capabilities, and their economic force and projection has expanded dramatically, too. So, China factors much more significantly in the thought process of America, and I’m certain that’s true with respect to Japan.

One thing that we believe in strongly is free and open navigation of the seas, and some of China’s activity in the South China Sea has been of great concern, both to the U.S. and Japan. So, I think that those concerns are highlighted in the conversation about a free and open Indo-Pacific.

I want to allow the president and Prime Minister Abe, though, to make the statements on this. I don’t want to try to go beyond what Secretary (Rex) Tillerson said in his speech, that I would refer you to, and I would encourage you to “stay tuned” because I think that is going to be a topic here.

Q: Many security experts are concerned about some unexpected incident from North Korea, like a missile part landing on Hokkaido. The U.S. may need to take some action, which could escalate into a war. Are you worried about such things?

A: We are worried about every contingency, and I think that we have the best military minds on the planet focused on those contingencies. But I would say this: The president has surrounded himself with a very stable team, on the U.S. side, and the president and his advisers understand the consequences of war.

I will mention his advisers. Gen. (John) Kelly, the chief of staff. Gen. (Joseph) Dunford, the chairman of the Joint Chiefs of Staff. Gen. H.R. McMaster, his national security adviser. Gen. Mattis, his secretary of defense. Those men have all served in situations where they understand the cost of war, and I think that any decision that’s taken will be taken in a very deliberate fashion.

Secretary of State Tillerson has very broad experience on a global basis. He’s a very serious person. The president is in constant consultation with his team, and I think he benefits from the experience that the military men bring to the discussion. And I know that he takes their advice under the strongest consideration.

So, I hope that answer helps your concern.

We’re concerned about every contingency and we are planning for every contingency.

(This article is based on an interview by Takeshi Yamawaki, senior staff writer and Taketsugu Sato, senior national security correspondent.)