US-Japan and the Pacific Century

THE US-Japan relationship is becoming increasingly acrimonious. The current mood of mutual disdain and suspicion is discernible in a new book in which Japanese parliamentarian Shintaro Ishihara advocates that Japan ``say no'' to American trade demands. Correspondingly, US Trade Representative Carla Hill has threatened that she will ``crowbar'' Japanese markets open, if necessary. Meanwhile, opinion polls in the US suggest that Japan has replaced the Soviet Union as America's chief international nemesis. And in Japan, a Business Week poll indicates that much of the Japanese public believes that the US has begun an irreversible decline. The ultimate question for Americans and Japanese is whether the current mood heralds the beginning of the end for North Pacific cooperation. According to the former US ambassador to Japan, Mike Mansfield, the US-Japan relationship is the single most important bilateral relationship in the world. Certainly, a breakdown in the relationship could cause a serious crisis for the world's economic system. After all, transpacific trade, at $260 billion a year far surpasses transatlantic trade at $170 billion.

It's true that the US and Japan have worked closely together during the postwar period. Americans should remember that Japan has been one of its most dependable allies. Whether during the Korean or Vietnam conflicts, Japan has consistently backed US initiatives. Japan also has rarely dissented from US policies in international economic organizations at the United Nations.

Japan did not act this way because it had to. Rather, it did so out of genuine support for US policy in Asia. In particular, Japan appreciated US resistance to the attempts of the Soviet Union and China to isolate Japan and dominate Asia. It is now clear that the US commitment to defend East Asia was the sine qua non of Japanese independence and economic reassertion.

However, in 1990, all of this seems distant. With the advent of Gorbachev and the erosion of Chinese influence, the threat from communism is decidedly remote. Around the globe and in East Asia, cold war alliances are being shrugged off.

Today, trade issues, not security concerns, are at the center of the US-Japan relationship. Whereas the US used to be the relationship's dominant partner, Japan has arguably achieved economic superiority. This juxtaposition has led to American resentment of Japan's ability to enter and dominate US markets. This misplaced resentment of Japan's legitimate success is compounded by the valid complaint that Japan has failed to remove impediments to US exports. Structural controls like Japan's strict regulations on government procurement and de facto rules on merchandise distribution have unnecessarily added to Japan's $55 billion trade surplus. Americans are surely correct in their perception that Japan supports free trade at the GATT Uruguay Round but not free trade in their own market.

To its credit, Japan is actively reforming its internal market while cooperating with the US in other areas. For example, Japan has opened up its telecommunications market to foreign bids. Japan has also acted responsibly as the world's largest creditor and has helped the US by financing the federal budget deficit. Moreover, Japan has effectively cooperated with the US by raising its development aid allotment. Japan is now the largest aid-giver in the world, and is budgeted for more than $10 billion in aid during 1990. The 1990 budget also raises defense spending by 6 percent, thus decreasing the need for a defense shield the US can no longer afford.

Clearly, there is a world beyond trade negotiations and the portents are that the US-Japan relationship will continue to evolve towards more cooperation, not less. One of the major factors in such growth will be Europe's movement towards unity. To the extent that Eastern Europe and the Soviet Union become lucrative markets, the primary beneficiary will be Western Europe, not the US or Japan. In the trilateral world of the US, Japan, and Europe, it will be Europe that will have the largest and fastest growing market. If the US and Japan are going to compete with this latter-day ``Holy Roman Empire,'' they must stop the public bickering and start planning. Far from being putative adversaries, the US and Japan have much to gain by preparing in advance for the Pacific Century.

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