The Japan Institute of International Affairs

Japan's Middle East Policy after the Geneva Interim Agreement with Iran
Nobumasa Akiyama 20 March 2014

It is too optimistic to say that an interim agreement between Iran and EU3+3 on Iran's nuclear development would bring the Middle East closer to a perpetual peace. A final resolution of the Iranian nuclear problem is not an easy goal. There are many deep gaps between Iran and the EU3+3 that must be filled before concluding a final agreement.

However, depending on how the process toward a final solution of the problem is managed and to what extent Iran would preserve its enrichment capability, the region might become more destabilized or strategically complicated. As a result, Japan, which imports more than 80 percent of its oil and approximately 30 percent of its liquid natural gas (LNG) from the Middle East, might have to solve a more complex equation in its energy security strategy. Iran's nuclear issue has a profound strategic implication on Japan's foreign policy beyond non-proliferation.

Improving relations with Iran would certainly contribute to Japan's energy security. With a rapprochement of the EU3+3 with Iran, the international energy market could have an additional supply of oil and gas, and this could also serve to diversify energy supply for the Japanese market. However, there is no free lunch. For engaging Iran, Japan would be required to make a greater commitment to coping with potential geo-political challenges in addition to nuclear proliferation in the Middle East.

First, with regard to non-proliferation, Iran's enrichment capacity may increase the risk of a nuclear cascade in the Middle East. If Iran would succeed in maintaining its enrichment capacity, it could stimulate other countries' desire for latent nuclear capabilities. Regional powers such as Saudi Arabia and Egypt would be greatly alarmed by the relative decline of their power in the competition for superiority in regional power politics. Saudi Arabia, in particular, would face a dual vulnerability: vulnerability vis-a-vis Iran, and vulnerability due to a sense of abandonment by the United States. Their sense of weakness would become a motive in seeking nuclear fuel cycle capabilities. Turkey, which has ambitions of leadership in regional power politics, would also be tempted to pursue a (latent) nuclear option. The competition among major regional powers would heighten the risk of destabilization in the Middle East's security environment.

Further, the development of the negotiation between Iran and EU3+3 may also have the impact on security in East Asia. North Korea is carefully observing how the United States deals with Iran's nuclear issue. It should be a good reference for North Koreans in strategizing its negotiation vis-a-vis the United States. Another implication would be given on the prospect for negotiation between the United States and South Korea on their 123 agreement on nuclear cooperation. If the United States would allow Iran, a former 'enemy,' to possess enrichment capability, South Korea, as a close ally of the United States, thinks that it deserves to have nuclear fuel cycle capabilities including pyro-processing, a kind of reprocessing method that South Korea conducts research along with an US nuclear laboratory.

Given such a prospect, Japan may have to play a more proactive role than ever for maintaining nuclear non-proliferation. Japan under the Abe Cabinet has seemed to have keen interest in doing nuclear business in the Middle East. Mr. Abe made two visits to Turkey this year, concluding a bilateral nuclear cooperation agreement and a deal for a nuclear power plant. Visiting a country twice in one year was unprecedented, and it showed the government's enthusiasm for promoting nuclear deals abroad. Japan also has held talks on nuclear cooperation with Jordan and Saudi Arabia as well as the UAE. Thus, Japan bears a primary obligation to contain the risks of nuclear accidents, terrorism, and proliferation as Japan's nuclear business inevitably contributes to the spread of nuclear risks in the region. Despite the experience of the Fukushima nuclear accident caused by the Great East Japan Earthquake, the level of Japan's technological competence remains high relative to others in the world. Further, Japan has the responsibility to share with the world the important lessons learnt from the accident.

Second, Japan holds a great stake in the region's stability for its own energy security. A possible rapprochement between Iran and the United States might also cause a fundamental change in the geo-political dynamics of the Middle East. It would bring about the decline of Saudi Arabia and Israel, traditional regional allies of the United States, and make them 'losers' in a balance-of-power game in the Middle East. This region-wide security dilemma stemming from the emergence of another big oil supplier might be more harmful than beneficial.

Further, the prospects for US commitment to the region become less clear. The shale revolution may move US public attention and interest away from Middle Eastern geo-political dynamics, possibly undermining US commitment to the Middle East. Although the US 'rebalance' toward Asia does not necessarily mean reduced US interest in the Middle East, it signals a potential shift of US strategic centrality away from the Middle East, raising further concerns among the traditional allies mentioned above. Even this is not the real intention of US policy, ambiguous attitudes or mixed messages from the United States might confuse regional players. They could cause a decline of US influence in the region, and eventually destabilize the region. Destabilization of the geo-political environment in the Middle East would pose a serious risk for Japan's stable energy supply, making it impossible for Japan to be a by-stander in the regional security dynamics.

In light of this, Japan's strategy toward the Middle East may be an important test for linking national interests and global issues in the name of 'proactive contributions to international peace,' a key concept of Abe's foreign policy doctrine. Japan's strategic priority is to prevent the retreat of the United States from the Middle East and to ensure that the United States continues to play a leading role in regional stability. To do so, Japan needs to cooperate with and reassure the United States by helping to fill the gap between what the United States has committed to the region and what the United States has to fulfill its strategic commitment. While contributing to the security of sea lanes of communication for its own energy security, Japan should further engage with moderate Muslim states such as Saudi Arabia, the UAE, and Jordan, and promote strategic partnership with them for regional stability. As a short-term objective, such strategic cooperation and partnerships with traditional regional allies of the United States should serve the aim of reassuring them and managing their insecurity. This would forestall instability triggered by a potential power transition through dialogue, and, possibly, consequent rapprochement with Iran.

In the meantime, Japan should design its long-term engagement strategy for the region to minimize the risk that might be caused by socio-economic structural changes in the region's countries. It should ensure constructive commitment by regional resource-exporting countries to the international energy market as a stabilizing force. Japan's technological advantages and social engineering capabilities would help Saudi Arabia and other Gulf countries develop national development strategies that satisfy the requirement of remaining effectively involved in the international energy market, while meeting the demands arising from demographic changes (the increasing demand for jobs among the young) and domestic energy demand. Smart but robust 'proactive contributions' to non-proliferation and long-term regional stability must be Abe's strategy toward the Middle East.

Nobumasa Akiyama is a professor at Hitotsubashi University and an adjunct senior fellow at the Japan Institute of International Affairs.

The views expressed in this piece are the author's own and should not be attributed to The Association of Japanese Institutes of Strategic Studies.
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