Beyond Cold War to Trilateral Cooperation in the Asia-Pacific Region: Scenarios for New Relationships Between Japan, Russia, and the United States

Foreword October 2016

The first version of this Report on Scenarios for New Relationships Between Japan, Russia, and the United States was published 25 years ago. Just after the collapse of the USSR, in anticipation of a visit to Japan by then-Russian President Boris Yeltsin in 1992, we hoped for a breakthrough. Japan and Russia had not signed a formal peace treaty ending World War II for 47 years because of an intractable dispute over the sovereignty of the Northern Territories (to Japanese) or southernmost Kuril Islands (to Russians). 2016 marks the 75^th anniversary the beginning of a war that ended without a treaty.

The goal of our report was to provide the background documentation and analysis that might help pave the way for the resolution of the dispute, and thus create a positive framework for a new post-Cold War triangular relationship in the Asia-Pacific. As the report’s preamble indicates, it was formally presented to the heads of the governments of Japan (Prime Minister Kiichi Miyazawa), the United States (President George Herbert Walker Bush), and Russian President Yeltsin.

Unfortunately, President Yeltsin did not end up visiting Japan until October 1993. At various junctures, Yeltsin promised that he would sign a peace treaty with Japan before the end of the millennium. But in late 1999 he resigned, ceding the presidency and Russia’s relationship with Japan to Vladimir Putin. In the meantime, numerous bilateral and multilateral working groups produced other proposals for resolving the dispute, none going much beyond the ideas presented in this report. For long periods, the territorial dispute and the idea of a peace treaty were pushed to the background as Russia and Japan focused on more practical political and economic engagement. In 2009, the two sides briefly returned to the negotiating table, and then-Prime Minister Putin visited Japan in 2010. Once again, however, Moscow and Tokyo hit an impasse.

The basic contours—and, of course, the history––of the bilateral dispute between Russia and Japan have not changed much since this report was published in 1992. On the other hand, the geopolitical and security trendlines in the Asia-Pacific have changed dramatically, and the triangular relationship between Japan, Russia, and the United States that the report described is no more. The rise of China as a major economic and military power has created a new dynamic in each of the bilateral relationships, as well as in regional and global affairs. Likewise, while the report declared the Cold War “over and buried” in Europe and the Middle East, new standoffs have now emerged in these regions. Russia’s invasion of Georgia in 2008, annexation of Crimea in 2014, proxy war in Ukraine’s Donbas region, and military intervention in Syria’s civil war in 2015 have upended the expectations of the 1990s.

The specter of an old-style Russia has replaced the prospect of a democratizing Russia seeking to cast off the pernicious legacies of World War II and the Cold War and integrate with Western institutions. Since the annexation of Crimea, many in the West have viewed Russia as a revisionist power set on over-turning the post-Cold War security order described in the original report, and an irredentist state laying claim to lost territories and spheres of influence. Consequentially, NATO is trying to revive itself as a military alliance to defend its members against Moscow.  In this context, the resolution of the Russo-Japanese dispute and the normalization of bilateral relations seem further away than ever. Nevertheless, the report’s prescriptions from 1992 remain valid, and President Putin has proposed returning to the 1956 Soviet-Japanese Joint Declaration on the territorial dispute (detailed and explained in the report) as the basis for a settlement.

In the 1990s, it was hoped that Japan, Russia, and the United States would develop a common view of Asia-Pacific security as concerns about each other’s Cold War military postures diminished. The scholars engaged in the study believed that the successful resolution of the dispute could become a pillar of regional stability and prevent an eventual power vacuum that, they presciently concluded, a “more aggressive China or insecure Japan could feel obliged to fill.” In 2016, a renewed effort to resolve the dispute by both Russia and Japan has occurred against this very scenario. Instead of opening the way for more Japanese economic investment in Russia as the 1992 report advocated, however, a resolution of the territorial dispute would now be an investment in Russia and Japan’s security.

In 2013, fears of a military confrontation with China over another set of disputed islands, the Senkaku Islands in the East China Sea, became particularly acute in Japan. Tokyo has been especially concerned that the close economic and political partnership that Russia and China have developed since 2001 might lead to closer military cooperation, and that Russian arms sales to China will strengthen the Chinese military in ways that could seriously threaten Japan. Tokyo began to look for options to complement its alliance with the United States to bolster its security against Chinese aggression in the Asia-Pacific, including exploring ways of diluting the Russian-Chinese rapprochement before it reached a strategic tipping point. Senior Japanese officials alerted American policymakers and experts to the rising threat from the Sino-Russian relationship and in private meetings with U.S. counterparts described China as “the biggest existential threat to Japan since 1945.”

Moscow is also wary of China’s regional ambitions, in spite of its partnership with Beijing. China’s expanding naval activities in and beyond the Pacific Ocean have increasingly intruded on Russia’s maritime domain. In 2012, for example, a Chinese icebreaker passed through the Sea of Okhotsk on its way to conduct China’s first Arctic expedition. In 2013, after a joint exercise with the Russian navy, Chinese naval vessels startled Moscow by sailing home through the Sea of Okhotsk and the Kuril Islands chain. Russia subsequently successfully petitioned the UN to recognize the entire seabed of the Sea of Okhotsk as an extension of the Russian continental shelf, and closed the sea to fishing by both China and Japan in 2014.

In the rapidly evolving geopolitics of Asia, both Russia and Japan now view improving their bilateral relationship as a hedge against China, putting the resolution of the territorial dispute and the conclusion of a peace treaty back on the top of their shared agenda. To jumpstart negotiations, in 2013 Prime Minister Shinzo Abe became the first Japanese leader to make an official visit to Russia in over a decade. Since then, Russian President Putin and Prime Minister Abe have met numerous times on the sidelines of large international events, steadily stepping up their personal encounters and diplomatic engagement. Earlier this year, Moscow and Tokyo began to prepare the ground for yet another much-anticipated, potentially momentous visit by the Russian President to Japan in December 2016. This activity has prompted the decision to re-release this report, as a reference point for policymakers, scholars and experts.

To restate again the principal conclusion of the report: the single most important step is to transform the issue by moving past a zero-sum game focused entirely on control of islands and instead seeking outcomes in which all parties are net winners. This is now premised on the belief that dealing with the very real challenges posed by a rising China is more important than owning a few small islands (which, after all, could soon succumb to rising sea levels).

For Russia, this means transforming the issue to focus on its national interests. The question should not be “how many islands will Russia return to Japan?”, but rather “should Russia seek to negotiate a comprehensive agreement with Japan that resolves this dispute in a way that enhances Russia’s security, political standing, and economic well-being?”

For Japan, the question should be “how much does Japan really care about the recovery of these disputed islands and how forthcoming is Japan prepared to be in making the advantages for Russians in any resolution outweigh the costs?”

Identifying the terms under which the two parties might compromise in an agreement that meets the minimum essential interests of each is not that hard.  To underscore this point, the report identifies 66 possible scenarios for successful resolution of the dispute. There have already been some encouraging signs in this regard, as Japan has reportedly proposed that the two countries jointly administer some of the islands.

Mobilizing the political will to accept a compromise is another matter.  Inside both nations, interested parties demand much more than minimum essential interests.  And the issue has now been wrapped in symbolism in both nations that would be difficult to penetrate. Nonetheless, the continuing rise of a more powerful and more assertive China is increasingly changing the geopolitical chess board for Moscow and Tokyo. We hope that this report will, once again, prove useful for the governments of Japan, Russia, and the United States as they reconsider how to overcome the current impasse.

—Graham Allison and Fiona Hill

October 2016

EXECUTIVE SUMMARY

This Report addresses the question of how the dispute between Japan and Russia can be resolved to achieve fully normalized relations between these two great nations. The principal obstacle to normalization is a group of four small islands that stand as relics of World War II and symbols of the Cold War.

The most important conclusion of this Study can be stated succinctly: there exist many ways to resolve this dispute —if the leaders of the governments are determined to do so. This report outlines 66 scenarios for successful resolution and discusses in detail three scenarios for achieving full normalization in the next 12 months: an accelerated Yeltsin five-stage plan; a bilateral compromise; and a comprehensive trilateral agreement.

The single most important recommendation of this Report can also be stated in a one line injunction: transform the issue. As President Yeltsin approached the scheduled visit to Japan in September, the dominant question was: “How many islands will Yeltsin return to Japan in Tokyo?” Confronting that definition of the issue in September, President Yeltsin canceled his visit. To have allowed the issue of normalizing relations between two great nations to be reduced to the question of how many islands Yeltsin would return to Japan when he visited Tokyo must count as a major failure of diplomacy. Posed in such crude zero-sum terms, the answer is pre-determined. Particularly in its current condition, Russia will not give up anything to anyone unilaterally—nor should it be expected to.

In the wake of the canceled visit, resolution of this issue will be more difficult, not less. But the challenge for diplomats in Japan, Russia, and friendly countries like the US remains the same: to transform the conception and dominant face of this issue. The defining question for Russia should become: “Should Russia seek to negotiate a comprehensive agreement with Japan that resolves this dispute in a way that enhances Russia’s security, political standing, and economic well-being” Russians should have to choose between a probable package that advances Russian interests in every dimension on the one hand, and continued stalemate on the other.

For Japan, the defining question should become: “How much does Japan really care about the recovery of these disputed islands and how forthcoming is Japan prepared to be in making the advantages for Russians in any resolution outweigh the costs?”

For the US, given the profound miscommunication revealed in events surrounding the canceled visit, the issue should be whether the parties need, and the priority of the issue merits, the kind of intense involvement the US demonstrated in resurrecting the Middle East peace talks.

In more technical terms, the question must become: Can this zero-sum game be transformed into a positive-sum game? Our Report identifies a number of scenarios in which all parties are net winners.

Beyond the major conclusion and major recommendation stated above, other significant conclusions and recommendations include:

The history of this dispute is more complex than recognized in the official positions of any of the three governments. In the course of our study, we encountered many blank spots, exaggerations, and misconceptions in all three countries. As a result of decades of Stalinist and Communist propaganda, most Russians believe that the four disputed islands are Russian and were historically Russian—despite the fact that never in Russia’s 1000 year history did Russia have title or control of these islands, save in the 47 years since Stalin seized them. In claiming all four islands, Japan often neglects or obscures the clouds over its title to the two larger islands, Iturup, and Kunashir. These derive from ambiguities about which islands were renounced in the 1951 Peace Treaty; subsequent interpretations of Japan’s administrative practice during the period prior to 1945 in which it controlled the Kuril islands; and the willingness of many in the Japanese government, including the then Foreign Minister Shigemitsu, to recognize Russia’s sovereignty over the two larger islands in the period leading up to the 1956 Joint Declaration. Nor is the US an innocent bystander. Conspiracy theorists exaggerate in seeking to give Franklin Roosevelt credit, or blame, for luring Stalin into the trap of seizing the islands at Yalta. But Secretary of State John Foster Dulles did deliberately frustrate resolution of the dispute in 1956 in order to solidify Japan’s role as the Asian pillar of the Cold War confrontation against Soviet Communism. This history cannot be erased. It must be confronted and overcome.

The obstacles to normalization of relations between Japan and Russia are formidable and not to be underestimated. The disputed territories have high salience in the domestic policies of both countries. the situation is complex and rapidly changing. Overcoming these difficulties in the relationship over the next 12 months, or even over the next several years, will not be easy. Nevertheless, failing to overcome these obstacles in the months, not years, ahead is also fraught with many dangers for Japan, Russia, the US, and the world. Having assessed the balance of interests and risks, we believe that the net costs of hesitation by the governments to move boldly to a resolution sufficient to normalize relations is much higher than the costs and risks of seeking a bold resolution now.

For Russia, the challenge in transforming the issue is to focus on Russia’s national interests. President Yeltsin will not give away anything, nor should he make unilateral concessions. His goal must be to defend and advance Russia’s national interests in a manner consistent with the principles of law and justice that he has stated for the new democratic Russia.

In focusing on these interests, he must recognize certain vulnerabilities:

• Stalin’s errors leave Russia without internationally- recognized sovereignty over southern Sakhalin and the eighteen undisputed islands of the Kuril chain.
• In seizing and holding the four disputed islands and refusing to sign the 1951 San Francisco Peace Treaty, Stalin fell into a trap and allowed the door to be locked.
• The Soviet Union agreed in the 1956 Joint Declaration to return the two smaller islands of Shikotan and the Habomais to Japan, after the conclusion of a bilateral peace treaty.
• Japan has some basis for its claim to sovereignty over the larger two islands.

At this point, resolving the dispute will require both Japan and Russia to compromise. Russia should insist upon conditions that protect it against material loss and that assure Russia significant net gains in its territorial claims to the remaining territories, its national security, and its economic well-being. Specifically, these might include:

• Guarantees that Russia will retain all present right to fish, to natural resources, and to the 200 mile economic zone around the disputed islands.
• Guarantees that Russia will retain all current rights to free and safe passage of ships through the straits between Iturup and Kunashir, and between Iturup and Urup.
• Gains in territorial terms from Japan’s recognition of Russia’s sovereignty over southern Sakhalin and the eighteen Kuril islands, renunciation in perpetuity of all claims to this Russian territory, and denunciation of revanchrist elements in Japan who assert such claims—including the Japanese Communist Party.
• Gains in national security from (1) guarantees that the disputed islands will remain forever demilitarized; (2) reciprocate reductions in American and Japanese forces in the area for Russia’s current and inevitable reductions; and (3) a new role for Russia as a “cooperation partner” with Japan and the US in their Security Treaty.
• Significant economic gains from (1) Japanese payment from all costs of relocating troops now stationed on the islands; (2) Japanese assumption of a lead role in a massive program of long-term G-7 aid for Russian reform beginning with the Japanese contribution of $5 billion per year over the next decade.
• The question for the Yeltsin government should become: if such a package were available, would it prefer this comprehensive agreement to the current stalemate?

To transform the issue, the Japanese will also have to stretch. Japan has been uncompromising in its demand that the islands are Japanese, that they were occupied illegally by Russia in 1945, and that they must be returned. But it has now recognized that continuing to repeat the demand for their return is insufficient. In the past year, Japan has demonstrated more flexibility in its approach to the issue. Still more will be required.

The challenge for the Japanese government is to decide that Japan is prepared to provide net gains for Russia in all significant currencies and to communicate these benefits with sufficient credibility to encourage Russia’s reconceptualization of this issue. This should include communication of Japan’s willingness to be quite flexible on everything beyond the principle of sovereignty, including timing, modalities, and conditions.

• Starting discussion now of a program for improving the lives of the islanders in the transitional period after Japan’s sovereignty is recognized.
• Communicating unambiguously Japan’s readiness to become a lead donor in a G-7 long-term program of support for Russian reform in which Japan would provide $5 billion per year over the next decade.
• Making clear Japan’s commitment to make the process of normalizing relations between these two great nations a positive sum game in which Russia suffers no net loss but rather the opposite: significant net gains in every important category, including security, politics, and economics.
• Communicating clearly that Russia’s reaffirmation of 1956 and a willingness to negotiate about all outstanding issues will be a sufficient first stage in a process that can, over the months ahead, lead to a solution.

The US is not just a third party. It is implicated in creating the impasse. As the “global partner” of one of the parties and an “emerging partner” of the other, its interests will be affected by the resolution.

The US calculation for transformation thus includes:

• Substantial financial and technical assistance to sustain Russian reform and prevent collapse back into authoritarianism or civil war are among America’s highest priority interests. The national security consequences of a disintegrating superpower’s nuclear arsenal are unthinkable.
• If there is to be substantial financial assistance to Russian reform, Japan must become a major donor. It is the only major surplus economy in the world.
• Japan has the capacity and the latent willingness to provide financial support for Russia. if but not if the territorial issue is successfully restored.
• The US has a great opportunity to serve as a catalyst in helping each nation transform the issue and to serve as honest broker and guarantor in the process of successful resolution.

We urge all parties to set ambitious objectives for the months ahead. A problem that has festered for 47 years will not be solved in 47 days. But time is not necessarily an ally in this case. Russia needs now the kind of financial and technical assistance only Japan can provide. A year or two down the road, who can guarantee that Russia will be Russia, or that democratic reformers will be seeking cooperative relations with the industrial democracies? Moreover, Japan’s assumption of the G-7 chair in January 1993 and preparation for the G-7 summit in Tokyo in July 1993 to which President Yeltsin will doubtless be invited establishes a deadline for decisions.

The objective for the next several months should be to prepare the ground for the first meeting between Yeltsin and Miyazawa in January and February. For Russia, preparation has both an internal and external dimension. Internally, this should include a concerted domestic campaign to confront the facts about this issue by publishing documents and promoting discussion that will expand the space for compromise. Externally, preparation must include an effort to rebuild basic working relations with Japan and engagement of the US as an active broker. For Japan, adequate preparation for a Yeltsin visit will also require work at home as well as explaining that resolution will be a multi-year, step by step process. More frank discussion about the contrast between the failure of the “all or nothing” approach pursued by some in Japan, and the success of more subtle strategies adopted by Germany before reunification, for example, should help drive home the point. In its external relations with Russia, Japan should decide and communicate clearly both bilaterally and through the US that (1) reaffirmation of 1956 and a willingness to negotiate about all other issues is a sufficient first step for a successful visit, and (2) Japan is determined to resolve this issue in a way that advances Russia’s net national interests.

The most direct road to resolution begins with the basic formula 2 + alpha: “2” being the two smaller islands Russia promised to return to Japan in 1956; “alpha” being the additional considerations regarding modality, timing, conditions, and compensation. The objective for a Yeltsin visit to Japan in early 1993 should be a major, successful first step. This should include Russia’s reaffirmation of the 1956 Joint Declaration and a proposal to negotiate about all remaining issues according to an agreed timetable, on the one hand, and Japan’s applause of that act and a significant response that communicates Japan’s commitment to a resolution that yields net advantages for Russia on the other. Both in the months leading up to that visit, and on that occasion, each leader must seek to reinforce the message with related initiatives including a sincere apology by Russia for the suffering the Soviet Union inflicted on Japanese POW’s and an apology by Japan for Japanese aggression which caused Russia suffering on several occasions, including intervention in Siberia during the Civil War.

The visit should be followed up immediately by high-level negotiations, assisted by a US emissary, in which specific terms and conditions for a comprehensive agreement on the principles of mutual advantage are hammered out. In the best case, Japan, Russia, and the US would announce in June 1993, prior to the July G-7 summit, a comprehensive agreement between the new trilateral partners in the Asia-Pacific. This would include redefinitions of the trilateral parties’ security relationship (including internationally-recognized borders, reductions in trilateral military forces, and an emerging security arrangement between these parties based on the existing US-Japan Security Treaty); economic initiatives (including the Japanese-led G-7 multi-billion dollar program of Economic Cooperation and Assistance); new political relations; the signing of a Japanese-Russian peace treaty; return of the two smaller islands; Russia’s acknowledgement process for return of the two larger islands over a decade or more.

All parties should reflect on the lessons of the postponement of the Yeltsin visit. The cancellation constituted a compound diplomatic failure: multiple fractures caused by diplomatic faults in all three governments. Fortunately, the postponement was more a disappointment than a setback. Consider what the possibilities would be now if the trip had gone forward and ended in failure. The domestic obstacles to flexible pursuit of Japanese and Russian interests in resolution are more powerful in the aftermath of cancellation than before. Successful resolution will require that they be addressed and outmaneuvered. If the Japanese and Russian governments are prepared to go forward on the basis of the principles we urge in this Report, they must communicate this fact to each other more clearly and credibly than they did in the weeks and months before the scheduled September visit. If the parties choose to engage the US. To help overcome the mistrust and suspicion that makes effective communication so difficult, the US will have to involve both parties in thorough discussions about how far and how fast each is able to go. In preparation for the Yeltsin visit, trusted representatives of the governments should have formulated and agreed upon principles, a framework, and specific actions each would take to make the visit a highly successful first step towards a solution.

The most important role for the US prior to a Japanese-Russian Summit is as a catalyst in helping each come to a larger conception of the issue, reassuring each about the sincerity and seriousness of the other, and being available as a partner in the process that follows.

The balance of forces within Japan and Russia today—domestic politics, government politics, and bureaucratic politics—clearly favors continued stalemate rather than solution. If our study were an exercise in forecasting rather than analysis of solutions, we would predict that this unresolved dispute is likely to be around for scholars to study for several years to come. Nonetheless, if the findings of our analysis are correct, they call into question the main lines of defense offered by the governments involved for their failure to resolve this dispute. Specifically, the interests of the parties are not irreconcilable. The principles on which each appropriates resolution are not insurmountable. This dispute will persist unresolved, if it does, for lack of leadership, imagination, courage, determination, and follow through.

Read the full report with the PDF below.

The Appendicies F-N document is available here as a separate PDF.

Foreword October 2016The first version of this Report on Scenarios for New Relationships Between Japan, Russia, and the United States was published 25 years ago. Just after the collapse of the USSR, in anticipation of a visit to Japan by then-Russian President Boris Yeltsin in 1992, we hoped for a breakthrough. Japan and Russia had not signed a formal peace treaty ending World War II for 47 years because of an intractable dispute over the sovereignty of the Northern Territories (to Japanese) or southernmost Kuril Islands (to Russians). 2016 marks the 75th anniversary the beginning of a war that ended without a treaty.The goal of our report was to provide the background documentation and analysis that might help pave the way for the resolution of the dispute, and thus create a positive framework for a new post-Cold War triangular relationship in the Asia-Pacific. As the report’s preamble indicates, it was formally presented to the heads of the governments of Japan (Prime Minister Kiichi Miyazawa), the United States (President George Herbert Walker Bush), and Russian President Yeltsin.Unfortunately, President Yeltsin did not end up visiting Japan until October 1993. At various junctures, Yeltsin promised that he would sign a peace treaty with Japan before the end of the millennium. But in late 1999 he resigned, ceding the presidency and Russia’s relationship with Japan to Vladimir Putin. In the meantime, numerous bilateral and multilateral working groups produced other proposals for resolving the dispute, none going much beyond the ideas presented in this report. For long periods, the territorial dispute and the idea of a peace treaty were pushed to the background as Russia and Japan focused on more practical political and economic engagement. In 2009, the two sides briefly returned to the negotiating table, and then-Prime Minister Putin visited Japan in 2010. Once again, however, Moscow and Tokyo hit an impasse.The basic contours—and, of course, the history––of the bilateral dispute between Russia and Japan have not changed much since this report was published in 1992. On the other hand, the geopolitical and security trendlines in the Asia-Pacific have changed dramatically, and the triangular relationship between Japan, Russia, and the United States that the report described is no more. The rise of China as a major economic and military power has created a new dynamic in each of the bilateral relationships, as well as in regional and global affairs. Likewise, while the report declared the Cold War “over and buried” in Europe and the Middle East, new standoffs have now emerged in these regions. Russia’s invasion of Georgia in 2008, annexation of Crimea in 2014, proxy war in Ukraine’s Donbas region, and military intervention in Syria’s civil war in 2015 have upended the expectations of the 1990s.The specter of an old-style Russia has replaced the prospect of a democratizing Russia seeking to cast off the pernicious legacies of World War II and the Cold War and integrate with Western institutions. Since the annexation of Crimea, many in the West have viewed Russia as a revisionist power set on over-turning the post-Cold War security order described in the original report, and an irredentist state laying claim to lost territories and spheres of influence. Consequentially, NATO is trying to revive itself as a military alliance to defend its members against Moscow.  In this context, the resolution of the Russo-Japanese dispute and the normalization of bilateral relations seem further away than ever. Nevertheless, the report’s prescriptions from 1992 remain valid, and President Putin has proposed returning to the 1956 Soviet-Japanese Joint Declaration on the territorial dispute (detailed and explained in the report) as the basis for a settlement. In the 1990s, it was hoped that Japan, Russia, and the United States would develop a common view of Asia-Pacific security as concerns about each other’s Cold War military postures diminished. The scholars engaged in the study believed that the successful resolution of the dispute could become a pillar of regional stability and prevent an eventual power vacuum that, they presciently concluded, a “more aggressive China or insecure Japan could feel obliged to fill.” In 2016, a renewed effort to resolve the dispute by both Russia and Japan has occurred against this very scenario. Instead of opening the way for more Japanese economic investment in Russia as the 1992 report advocated, however, a resolution of the territorial dispute would now be an investment in Russia and Japan’s security.In 2013, fears of a military confrontation with China over another set of disputed islands, the Senkaku Islands in the East China Sea, became particularly acute in Japan. Tokyo has been especially concerned that the close economic and political partnership that Russia and China have developed since 2001 might lead to closer military cooperation, and that Russian arms sales to China will strengthen the Chinese military in ways that could seriously threaten Japan. Tokyo began to look for options to complement its alliance with the United States to bolster its security against Chinese aggression in the Asia-Pacific, including exploring ways of diluting the Russian-Chinese rapprochement before it reached a strategic tipping point. Senior Japanese officials alerted American policymakers and experts to the rising threat from the Sino-Russian relationship and in private meetings with U.S. counterparts described China as “the biggest existential threat to Japan since 1945.”Moscow is also wary of China’s regional ambitions, in spite of its partnership with Beijing. China’s expanding naval activities in and beyond the Pacific Ocean have increasingly intruded on Russia’s maritime domain. In 2012, for example, a Chinese icebreaker passed through the Sea of Okhotsk on its way to conduct China’s first Arctic expedition. In 2013, after a joint exercise with the Russian navy, Chinese naval vessels startled Moscow by sailing home through the Sea of Okhotsk and the Kuril Islands chain. Russia subsequently successfully petitioned the UN to recognize the entire seabed of the Sea of Okhotsk as an extension of the Russian continental shelf, and closed the sea to fishing by both China and Japan in 2014.In the rapidly evolving geopolitics of Asia, both Russia and Japan now view improving their bilateral relationship as a hedge against China, putting the resolution of the territorial dispute and the conclusion of a peace treaty back on the top of their shared agenda. To jumpstart negotiations, in 2013 Prime Minister Shinzo Abe became the first Japanese leader to make an official visit to Russia in over a decade. Since then, Russian President Putin and Prime Minister Abe have met numerous times on the sidelines of large international events, steadily stepping up their personal encounters and diplomatic engagement. Earlier this year, Moscow and Tokyo began to prepare the ground for yet another much-anticipated, potentially momentous visit by the Russian President to Japan in December 2016. This activity has prompted the decision to re-release this report, as a reference point for policymakers, scholars and experts.To restate again the principal conclusion of the report: the single most important step is to transform the issue by moving past a zero-sum game focused entirely on control of islands and instead seeking outcomes in which all parties are net winners. This is now premised on the belief that dealing with the very real challenges posed by a rising China is more important than owning a few small islands (which, after all, could soon succumb to rising sea levels).For Russia, this means transforming the issue to focus on its national interests. The question should not be “how many islands will Russia return to Japan?”, but rather “should Russia seek to negotiate a comprehensive agreement with Japan that resolves this dispute in a way that enhances Russia’s security, political standing, and economic well-being?”For Japan, the question should be “how much does Japan really care about the recovery of these disputed islands and how forthcoming is Japan prepared to be in making the advantages for Russians in any resolution outweigh the costs?”Identifying the terms under which the two parties might compromise in an agreement that meets the minimum essential interests of each is not that hard.  To underscore this point, the report identifies 66 possible scenarios for successful resolution of the dispute. There have already been some encouraging signs in this regard, as Japan has reportedly proposed that the two countries jointly administer some of the islands.Mobilizing the political will to accept a compromise is another matter.  Inside both nations, interested parties demand much more than minimum essential interests.  And the issue has now been wrapped in symbolism in both nations that would be difficult to penetrate. Nonetheless, the continuing rise of a more powerful and more assertive China is increasingly changing the geopolitical chess board for Moscow and Tokyo. We hope that this report will, once again, prove useful for the governments of Japan, Russia, and the United States as they reconsider how to overcome the current impasse.—Graham Allison and Fiona HillOctober 2016