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Japan-U.S. Relations: Policy Issues for the Clinton Administration and the 103rd Congress: The Clinton Administration and the 103rd Congress are in the early stages of a major review of U.S. trade, international and security relations with Japan, the principal U.S. ally and trading partner in Asia. A number of recent developments have raised tensions in this mutually beneficial relationship, which is still characterized by deepening economic interdependence and close political and security cooperation. These include the end of the Cold War, which has eliminated a common military threat; the recent renewed rise in Japan's trade surplus after several years of decline; and increasing international assertiveness by Japan, sometimes in conflict with U.S. policy.
Japan's Foreign Aid: Japan has quickly risen to prominence as a donor of official development assistance (ODA), providing volumes of aid on par with the United States since the late 1980s. Originally a tool to bolster Japan's postwar economic recovery, Japanese aid has gradually assumed importance as a foreign policy tool. Faced with increased pressure from the international community to play a greater role in meeting global challenges and lacking the military and diplomatic resources of other nations, Japan has increasingly turned to its foreign aid as a source of world influence.
Japan's Sea Shipment of Plutonium: Japan's sea shipment of a ton of plutonium from France to Japan on Nov. 7, 1992, faced strong public opposition, as did a previous one in 1984, from various public interest groups, independent analysts, and Members of Congress. The shipment arrived safely in Tokyo Jan. 4, 1993. Several more shipments at intervals of about 3 years are expected. While the plutonium is owned by Japanese utilities, it was produced from uranium enriched in the United States and supplied under a U.S.-Japan agreement for nuclear cooperation, revised in 1988. Although the agreement ties some strings to what Japan can do with nuclear imports from the United States, it also in effect gives to Japan a 30-year advance consent to ship plutonium subject to informing the United States.
Japanese and U.S. Industrial Associations: Their Roles in High-Technology Policymaking: In both Japan and in the United States, industrial associations play an important role in enhancing government understanding and interaction with industries and in easing cooperative efforts among firms. This report examines the role of industrial associations and related organizations in high-technology policymaking and in accelerating technological development.
JETRO and International Trade Promotion by Japan: JETRO, the Japan External Trade Organization, has played a key role in Japan's system for trade promotion. It is a public corporation, a quasi-governmental organization, operating under the general supervision of Japan's Ministry of International Trade and Industry (MITI).
Japan-U.S. Trade Negotiations Under the Framework: Status and Alternative Approaches: It has been more than a year since the United States and Japan established their bilateral framework for trade negotiations and other economic relations. The framework set down rules and deadlines to address various economic issues, particularly market access in Japan for U.S. exports and the Japanese global trade surplus. The two sides have failed to reach agreements on any of the major issues. The United States is left with several policy options to resolve the breakdown in trade negotiations.
Japan-U.S. Trade Negotiations: Will the Deadlock Be Broken?: The United States and Japan have been deadlocked for over a year in an effort to reach agreements under the July 1993 Framework for a New Economic Relationship. The overriding obstacle has concerned the issue of how to measure progress under future agreements to open Japan's market further to foreign goods and services.
Japan-U.S. Automotive Framework Talks: The U.S.-Japan framework talks were initiated in July 1993. The automotive negotiations between Japan and the United States focused on sales of U.S. vehicles in Japan; sales of U.S.-made original equipment parts in Japan and to Japanese transplants in the United States; and deregulation of the market for replacement parts in Japan. An unresolved dispute over shock absorbers and other replacement parts resulted in the United States launching a formal investigation of Japanese market barriers to imported car parts under Section 301 on Oct. 1, 1994.
Japan-U.S. Trade and Economic Relations: Bibliography-In-Brief, 1990-1991: The following references to the current periodical literature are taken from CRS, public policy literature file (PPLT). Congressional users may request full text of items by phoning 707-5700. Others users should consult their local library.
Japan-U.S. Trade: A Chronology of Major Events, 1980-1990: Former U.S. Ambassador to Japan Mike Mansfield once classified U.S. Japanese relations as "the most important bilateral relationship in the world, bar none." Over the past decade, tensions between the two nations increased markedly, due largely to U.S. concerns over the sharp rise in the U.S. Japan bilateral trade imbalance and to the growing competitive challenge posed by Japan. This paper provides a chronology of major trade events between the United States and Japan from 1980 through 1990 in order to provide a perspective of major trade issues between the two nations. The appendix provides selected data on trade between the two countries over this period.
The Japanese Health Care System: This report provides (1) a description of the coverage, benefits, financing and administration of the Japanese health insurance plans; (2) a discussion of the way in which reimbursement levels for health care providers are determined; and (3) an analysis of the way in which the provision of health care system is organized in Japan.
Japan-U.S. Trade U.S. Exports of Negotiated Products, 1985-1990: Trade relations between the United States and Japan in the 1980s were marked by U.S. efforts to pressure Japan to absorb increasingly greater amounts of U.S. exports. The United States sought to improve its steadily worsening bilateral trade deficit with Japan by negotiating to lower barriers to U.S. exports through the General Agreement on Tariffs and Trade, the Market Oriented, Sector Selective Talks, the Super 301 process, the Structural Impediments Initiative, and other bilateral fora. The United States succeeded in having Japan take some market-opening measures, and despite fluctuations, U.S. exports to Japan of most of the products which were the subject of negotiations by the two countries between 1985 and 1990 have increased.
Japan-U.S. 1995 Automotive Dispute: Impact of 100 Percent Tariffs on Automobile Dealers by State: There have been varying estimates of the number of U.S. automobile dealerships that would be affected by the Administration's recently announced plan to impose a 100-percent tariff on imported Japanese luxury automobiles. This report examines the assumptions which result in some of the differences. also provides a State-by-State estimate of numbers of dealers potentially affected if the higher tariffs are imposed.
Japan's Response to U.S. Trade Pressures: End of an Era?: Over the past 30 years, U.S. trade negotiators have pressured Japan to open its market to foreign goods and services. These outside pressures, known as gaiatsu in Japan, have been based partly on economically coercive bargaining and partly on invitation. The coercive element, which has entailed threats of retaliatory market constriction should a satisfactory resolution of the market opening dispute not be forthcoming, generally has been a necessary ingredient in obtaining concessions from Japan. The invitational component, which has included requests for U.S. pressures from Japanese interests who favor reforms, generally has facilitated Japanese concessions and made the gaiatsu process unique.
The Federal Reserve's Arrangement for Emergency Loans to Japanese Banks: The U.S. Federal Reserve reportedly has an arrangement with the Bank of Japan to provide emergency loans to Japanese banks operating overseas in exchange for U.S. Treasury securities. The collateralized loans would be extended on short notice for banks facing emergency liquidity needs. The purpose of the arrangement is to forestall the possible sale by Japanese banks of large amounts of U.S. Government securities (thereby raising U.S. interest rates) and to boost confidence in Japan's financial system. The loans would not risk U.S. taxpayers' funds. The Chairmen of both House and Senate Banking Committees have made statements about the arrangement, thus making it a matter oflegislative interest.
Japan's New Era of Coalition Governance: Implications for U.S. Interests and Policy: Recent Japanese political instability has complicated U.S.-Japan relations and posed new challenges to the achievement of important American economic, foreign policy and security objectives. Since July 1993 Japan has been governed by coalitions under three different prime ministers. The first coalition, under Prime Minister Morihiro Hosokawa, pushed through electoral and campaign finance reform legislation of potentially long-term significance, but failed to overcome political, bureaucratic and interest group resistance to its economic and administrative reform agenda. Its successor's have appeared to have progressively less power and will to carry out promised reforms or assume international leadership commensurate with Japan's global economic weight.
Japanese Participation in United Nations Peacekeeping Operations: Japan is positioned to deploy its troops overseas for the first time since World War II. Under a controversial peacekeeping operations (PKO) bill passed by the Japanese Diet (parliament) on June 15, 1992, Japan is allowed to dispatch Self-Defense Forces (SDF) soldiers abroad for noncombat service with United Nations peacekeeping forces (PKF). [1] The politically sensitive PKO legislation comes two years after Japan was stung by international criticism for its failure to send troops to the Persian Gulf, even just for noncombat support. The day after the passage of the bill, Prime Minister Kiichi Miyazawa pledged an early dispatch of SDF personnel to Cambodia.
Alternative Sources of Wood for Japan: Japan is one of the world's largest wood importers, with two-thirds of its imports as logs (unprocessed timber). Southeast Asia has been the largest log supplier, but supplies (and exports to Japan) have been declining. The United States has become a more important supplier, but concerns about declining domestic timber supplies have led to proposals to prohibit or to tax log exports. Opponents suggest that Japan would simply turn to other sources to replace U.S. logs. One question in this debate is where the alternative sources of logs or wood products might be.
Japan's Ongoing Political Instability: Implications for U.S. Interests: The surprise election of Socialist Party leader Tomiichi Murayama as Prime Minister on June 29, 1994, reflects an ongoing process of change and realignment in Japanese politics that, in the short term, has made the management of U.S.-Japan relations significantly more difficult and impeded the resolution of important issues. Although Murayama has pledged continuity in U.S.-Japan relations, and key cabinet posts have been given to senior LDP leaders with experience in dealing with Washington, his election could have a number of negative implications for U.S. interests. Among other possibilities, the change could temporarily set back the cause of political reform in Japan, further delay the recovery of the Japanese economy from a three-year long slump, pose new obstacles to trade negotiations aimed at more fully opening Japanese markets to U.S. goods and services, and bring into question Tokyo's cooperation under certain scenarios on the issue of North Korea's nuclear weapons program. The likely hiatus in major decisionmaking may continue at least until the next general election.
Japan's Prime Minister: Selection Process, 1991 Candidates, and Implications for the United States: Prime Minister Toshiki Kaifu's concurrent two-year term as president of the Liberal Democratic party (LDP) and Prime Minister of Japan expires at the end of October 1991. The May 1991 death of Shintaro Abe, the front runner to replace him, opened the field to nearly a dozen candidates. These include Kaifu for another term, senior LDP faction leaders Kiichi Miyazawa, Michio Watanabe, and Hiroshi Mitsuzuka, former Prime Minister Noboru Takeshita, and several others. A clear favorite from this group has not emerged, in part because most except Kaifu are rumored to be involved in current and past stock market and banking scandals.
Japan's Politics and Government in Transition: Japan's politics and government are undergoing a historic transition. The 38-year one-party rule of the Liberal Democratic Party (LDP) came to an end on July 18, 1993, when the party was voted out of power, even as it remained the single largest party in the lower house of Japan's bicameral Diet, or parliament. Seven non-communist parties, with little in common save their shared interest in dethroning the LDP, formed a shaky coalition.
Japan's Uncertain Political Transition: Japan's current political instability began in July 1993, when the Liberal Democratic Party (LDP) -- in power since 1955 - was voted out and replaced by a fragile multiparty coalition government under Prime Minister Morihiro Hosokawa. The new government faced turmoil in April 1994, when Hosokawa suddenly resigned amid a personal financial scandal. Then-deputy prime minister/foreign minister Tsutomu Hata succeeded, but only at the head of a minority government after the Socialist party, a key coalition partner, quit the Hata coalition. Although beset by its own internal squabbles, the LDP remained the single largest party in Japan's bicameral Diet, or parliament. In late June, Hata was forced to resign under threat of an LDP-led no-confidence motion.
Japan's Uncertain Political Transition: Japan's current political instability began in July 1993, when the Liberal Democratic Party (LDP) -- in power since 1955 -- was voted out and replaced by a fragile multiparty coalition government under Prime Minister Morihiro Hosokawa. The new government faced turmoil in April 1994, when Hosokawa suddenly resigned amid a personal financial scandal. Then-deputy prime minister/foreign minister Tsutomu Hata succeeded, but only at the head of a minority government after the Socialist party, a key coalition partner, quit the coalition. Although beset by its own internal squabbles, the LDP remained the single largest party in Japan's bicameral Diet, or parliament. In late June, Hata was forced to resign under threat of an LDP-led no confidence motion.
Japan's Budget: Role in Economic Policymaking: The Japanese economy has been in recession for three years, making it the longest recession in Japan's post-war experience. Groups within and outside Japan are calling on Japan to adopt aggressive fiscal policy measures to boost the Japanese economy and to aid in the recovery of the world economy. Japan has enacted a number of limited measures to stimulate, but it is unlikely to move more aggressively to adopt deficit-financing measures to stimulate its economy for a number of reasons: political and government leaders oppose deficit financing in principle; and under present economic conditions, Japanese officials are more concerned with the effects a fiscal stimulus program will have on the yen, on Japan's trade account, and on its economic recovery.
The Yen/Dollar Exchange Rate: The dollar declined abruptly in value against the yen in the second quarter of 1994, spurring the central banks of seventeen nations to coordinate a series of intervention efforts in the world's currency trading markets. In addition, the dollar's decline sparked discussions of the possible policy moves the United States and other nations might take to stem the fluctuations in the value of the dollar. Economic theory and empirical evidence indicate that the underlying movement of the exchange rate is tied to the long-term, macroeconomic movements of the economy, or to the combined movements of the economies of different countries, such as the United States and Japan. These macroeconomic factors account for at least half of the overall movement of exchange rates.
Japanese and U.S. Economic Involvement in Asia and the Pacific: Comparative Data and Analysis: In a world in which economic and trade performance are fast gaining acceptance as important components of national power and well being, Congress has become increasingly interested in the comparative success of U.S. business in the vast, rapidly growing Asia-Pacific region. For the most part, Congress has tended to view Japan as the main competitor of the United States in Asian markets and the standard against which U.S. success is measured. The stakes for the United States are considerable. Exclusive of Japan, the Asia-Pacific region accounted for $ 92 billion in U.S. exports in 1993 and $ 138 billion in imports, or about 20 percent of total U.S. exports and 24 percent of U.S. global imports. A number of projections indicate that Asia will account for the largest share of world trade growth in the next decade. Japan's growing economic presence has been accompanied by a relative increase in its political influence vis-a-vis that of the United States, a factor of considerable long term significance for U.S. interests, and it would appear the availability of alternative Asian markets has strengthened Japan's resistance to U.S. trade demands.
Japan-U.S. Relations in a Post-Cold War Environment: Emerging Trends and Issues for U.S. Policy: The prospects for Japan-U.S. relations in a rapidly changing minternational environment were explored in depth in a September 27, 1991, CRS seminar entitled "The Future of U.S.-Japan Relations: Global Partnership or Strategic, Rivalry?" A full transcript of the proceedings was published in February 1992 by the House Committee on Ways and Means as a Committee Print. This report summarizes the principal findings of that seminar.
Japan-U.S. Economic Relations: Selected References: This list of readings focuses on the current state of the U.S. economic relationship with Japan. A general, introductory section is followed by citations discussing specific Japanese business practices and trade policies which have an impact on the relationship. The bibliography also describes trade trends in specific sectors (including commentaries on the semiconductor agreement) and concludes with a section on policy options.
July 1992 Japanese Elections: Elections for half of the 252 seats of the upper house of Japan's Diet (parliament) will be held in late July 1992. The ruling Liberal Democratic Party (LDP) appears unlikely to regain the majority it lost in the previous upper house election in July 1989. It appears that continued, but sometimes difficult, cooperation between the LDP and some of the smaller opposition parties is one likely result of the 1992 election. On the other hand, there is a possibility that significant political changes, such as the formation of a coalition government or even a reorganization of the political parties, could result from an opposition victory. As of early June, there are two large sources of uncertainty regarding the upcoming election: first, the LDP could dissolve the lower house and hold a lower house election on the same day as the upper house election, which would alter all calculations of likely outcomes; and second, political scandals which would probably hit the LDP hardest could be brought to light before the election.
Japan's Uncertain Political Transition: Japan's uncertain political transition began in July 1993, when the conservative Liberal Democratic Party (LDP) -- in power since 1955 -- was replaced by a fragile multiparty coalition. Under Prime Minister Morihiro Hosokawa, the coalition faced turmoil in April 1994, when Hosokawa resigned abruptly amid a personal financial scandal. Then-deputy prime minister/foreign minister Tsutomu Hata succeeded, but only at the head of a minority government as the Social Democratic Party (SDP), a key coalition partner, quit the coalition. Though beset by its own internal squabbles, the LDP remained the single largest party in Japan's bicameral Diet, or parliament. In late June, Hata was forced to resign under threat of an LDP-led no-confidence motion.
Japan and an East Asian Trading Bloc: The 1990s are likely to be known as the decade of the trading blocs, although these neo-blocs differ considerably from those of the 1930s. Countries are linking to liberalize the flow of trade and investments across their borders without necessarily raising external barriers. The European Community and the European Free Trade Association are linking to create a European Economic Area, and the United States and Canada have joined in negotiations with Mexico to conclude a North America Free Trade Agreement. In Asia, nations have been studying the idea of a similar arrangement for themselves.
Congress and Trade Policy Toward Japan: Congressional policymaking with respect to trade with Japan is driven by strong domestic interests, appeals to broad political principles, and numerous horror stories. The $43 billion U.S. trade deficit with Japan continues to be a focus of attention, but the deficit is an issue because it reflects aggressive competition between Japanese companies and U.S. industries.
APEC and Free Trade in the Asia Pacific: This report discusses the summit held by President Bill Clinton and other leaders of the Asia Pacific Economic Cooperation (APEC) on November 19, 1995. The report discusses the primary reason for the summit, an Action Agenda intended to lead to free and open trade and investment among its members. The report also discusses how APEC countries were divided on certain issues going into this summit.
Financial Services Trade with Japan: The 1995 U.S.-Japan Financial Services Agreement further liberalizes aspects of Japan's financial markets, particularly in asset management, corporate securities, cross-border financial services, and in providing greater transparency for administrative procedures. Implementation will have to be monitored, however, and some issues still remain unresolved.
Japanese Trade Balance and Exchange Rate: Seeing Through the Numbers: Measured in dollars, Japan's global trade surplus stands at a record level. Also in recent months the Japanese yen has appreciated markedly against the dollar. The two events seem to foster a sizable degree of concern among many Americans, perhaps, taken to be evidence of Japan's economic success and the United States' economic failure. Things need not be as they seem, however.
Japan-U.S. Automobile and Parts Trade Dispute: On May 9, 1995, the United States initiated action designed to resolve a dispute with Japan dealing with automobiles and auto parts. In an effort to move negotiations along and resolve a U.S. unfair trade practices case (Section 301) dealing with barriers in the aftermarket for auto parts in Japan, the United States has threatened to impose 100 percent tariffs on imports of thirteen Japanese luxury passenger cars (Honda Acura, Nissan Infiniti, Toyota Lexus, Mazda 929 and Millenia, and Mitsubishi Diamante). The decision will be made by June 28, 1995. The United States also is pursuing a broad unfair trading case dealing with access to Japan's automotive market at the World Trade Organization. Japan, meanwhile, has also initiated a case at the WTO challenging the legality of the threatened increase in U.S. tariffs. Consultations under the WTO on these issues began in Geneva on June 12, 1995.
Japan-Taiwan Economic Relations: Implications for the U.S.: Taiwan and Japan might seem to be two similar island economies when viewed from this side of the Pacific, but they are strikingly dissimilar. Over the twentieth century, their relationship with one another has shifted from colonial to mutual growth and recognition to the current anomaly of an intense economic interchange accompanied by severed diplomatic ties. Between Taiwan and Japan, the private sector is taking the lead in developing a relationship that is both mutually beneficial and strained.
Commercial Relations with Russia: Prospects for a Common United States-Japanese Policy: Discussions in Japan in May 1992 related to potential agreements at the September 1992 Russian-Japanese summit were keyed to the central question, Will the barriers to significant commercial cooperation involving Russia, Japan and the United States in Russian Siberia be removed? [1] From these discussions among key Japanese industrialists, bankers, government officials and academics who influence policy, came a tentative "yes", if four conditions are met. A positive outcome would thus seem more likely than at any previous time. Such an outcome would likely promote profitable trade and investment, creating jobs in U.S. enterprises and serve as a vehicle for mutually beneficial U.S.-Japanese cooperation.
Japan's Uncertain Political Transition: Japan's political uncertainty continues as it has since July 1993, when the conservative Liberal Democratic Party (LDP) -- in power since 1955 -- was replaced by a fragile multiparty coalition. Under Prime Minister Morihiro Hosokawa, the coalition faced turmoil in April 1994, when he resigned amid a personal financial scandal. Then-deputy prime minister/foreign minister Tsutomu Hata succeeded, but only at the head of a minority government as the Social Democratic Party (SDP), a key coalition partner, quit the coalition. Though beset by its own internal squabbles, the LDP remained the single largest party in Japan's bicameral Diet, or parliament. In late June, Hata was forced to resign under threat of an LDP-led no-confidence motion.
Japan's Science and Technology Strategies and Policies: Japan,s rise as a leading economic power has been attributed to many factors. Increasingly, attention has focused on Japan,s ability to apply innovative technologies to develop new products. Technology development and applications are at the core of a system in which the government and the private sector facilitate industrial policies and practices. Japanese research and development efforts increasingly stress what one Japanese policymaker calls the "fusion" solution, or combining advances in different technologies to generate new products and innovations.
Japan-U.S. Relations: Issues for Congress in the 1990s: Japan-U.S. relations are more uncertain and subject to greater strain today than at any time since World War II. Longstanding military allies and increasingly interdependent economic partners, Japan and the United States have worked closely together to build a strong, multifaceted relationship based on democratic values and interests in world stability and development. But Japan today is our foremost economic and technological competitor. The Cold War thaw, discord in U.S.-Japanese relations over the Iraq-Kuwait crisis of 1990-1991, a protracted U.S. recession, and exigencies of U.S. election-year politics raised new questions about the appropriate U.S. policy toward this Asian ally.
Japan-U.S. Trade: The Construction Services Issue: This report discusses the issues of the U.S.-Japanese trade relations of the Reagan and Bush Administrations, and the Clinton Administration.
Japanese-U.S. Trade Relations: Cooperation or Confrontation?: With Japan the United States has had one of its most important, and, at the same time, one of its most difficult, trading rela- tionships. Japan ranks second to Canada as the largest U.S. export market. It is also the largest single source of imports to the United States.
U.S. Trade Policy Towards Japan: Where Do We Go From Here?: A reevaluation of U.S. trade policy towards Japan and how we negotiate our trade difficulties is now taking place in the Congress, the executive branch, academia, and the business community. From the various reviews are emerging critiques and proposals for new policy approaches.
Japan: Prospects for Greater Market Openness: Japan has made considerable progress in opening its economy to imports, but significant obstacles remain. This report analyzes the underlying causes of Japan's market protection and assesses the prospects for Japan moving in the direction of greater market openness.
Allied Burdensharing in Transition: Status and Implications for the United States: This report describes recent changes in U.S. burdensharing relationships with NATO, Japan and South Korea and, in the process, identifies some implications for U.S. foreign policy.
Japan-U.S. Trade: The Structural Impediments Initiative: On May 25, 1989, President Bush proposed that the United States undertake the Structural Impediments Initiative (SII), a series of discussions with Japan to address certain fundamental Japanese economic policies and business practices that the United States claims impede U.S. exports and investments. The SII was, in part, a Bush Administration response to the stubborn U.S. trade deficit and other problems that have caused friction in the U.S. trading relationship with Japan. It was also a response to congressional pressure to deal more aggressively with Japanese unfair trade practices and to calls from critics to adopt a "managed" trade policy toward Japan.
Climate Change: The EU Emissions Trading Scheme (ETS) Enters Kyoto Compliance: This report discusses the development in global warming as a global issue. Topics include issues that have arisen regarding the ETS and considerations for cap-and-trade.
Potential F-22 Raptor Export to Japan: This report discusses issues surrounding Japan's interest in purchasing the F-22A Raptor aircraft from the United States. Although the export of the plane is now prohibited by U.S. law, Congress has recently and may again consider repealing this ban.
Japan-U.S. Relations: Issues for Congress: This report discusses the relationship between the United States and Japan, including Japanese efforts to support the U.S. in the wake of the September 11th, 2001 terrorist attacks and the two countries' economic ties, especially with regards to the recent economic downturn.

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