URL: http://countrystudies.us/japan/132.htm

<h>Relations with the United States

<p>Japan-United States relations were more uncertain in the early 1990s
   than at any time since World War II. As long-standing military allies
   and increasingly interdependent economic partners, Japan and the
   United States cooperated closely to build a strong, multifaceted
   relationship based on democratic values and interests in world
   stability and development. Japan-United States relations improved
   enormously in the 1970s and 1980s, as the two societies and economies
   became increasingly intertwined. In 1990 their combined gross national
   product (GNP) totaled about one third of the world's GNP. Japan
   received about 11 percent of United States exports (a larger share
   than any other country except Canada), and the United States bought
   about 34 percent of Japan's exports. Japan had US$148 billion in
   direct investment in the United States in 1991, while the United
   States had more than US$17 billion invested in Japan. Some US$100
   billion in United States government securities held by institutions in
   Japan helped finance much of the United States budget deficit.
   Economic exchanges were reinforced by a variety of scientific,
   technical, tourist, and other exchanges. Each society continued to see
   the other as its main ally in Asia and the Pacific. Certain
   developments in the late 1980s damaged bilateral relations.
   Nevertheless, public opinion surveys continued to reveal that
   substantial majorities of Japanese and Americans believed that the
   bilateral relationship was vital to both countries.

<p>Growing interdependence was accompanied by markedly changing
   circumstances at home and abroad that were widely seen to have created
   a crisis in Japan-United States relations in the late 1980s. United
   States government officials continued to emphasize the positive
   aspects of the relationship but warned that there was a need for "a
   new conceptual framework." The Wall Street Journal publicized a series
   of lengthy reports documenting changes in the relationship in the late
   1980s and reviewing the considerable debate in Japan and the United
   States over whether a closely cooperative relationship was possible or
   appropriate for the 1990s. An authoritative review of popular and
   media opinion, published in 1990 by the Washington-based Commission on
   US-Japan Relations for the Twenty-first Century, was concerned with
   preserving a close Japan-United States relationship. It warned of a
   "new orthodoxy" of "suspicion, criticism and considerable self-
   justification," which it said was endangering the fabric of Japan-
   United States relations.

<p>Three sets of factors stand out as the most important in explaining
   the challenges facing Japan-United States relations. They are
   economic, political-military, and domestic in nature.

<p>The relative economic power of Japan and the United States was
   undergoing sweeping change, especially in the 1980s. This change went
   well beyond the implications of the United States trade deficit with
   Japan, which had remained between US$40 billion and US$48 billion
   annually since the mid-1980s. The persisting United States trade and
   budget deficits of the early 1980s led to a series of decisions in the
   middle of the decade that brought a major realignment of the value of
   Japanese and United States currencies. The stronger Japanese currency
   gave Japan the ability to purchase more United States goods and to
   make important investments in the United States. By the late 1980s,
   Japan was the main international creditor.

<p>Japan's growing investment in the United States--it was the second
   largest investor after Britain--led to complaints from some American
   constituencies. Moreover, Japanese industry seemed well positioned to
   use its economic power to invest in the high- technology products in
   which United States manufacturers were still leaders. The United
   States's ability to compete under these circumstances was seen by many
   Japanese and Americans as hampered by heavy personal, government, and
   business debt and a low savings rate.

<p>In the late 1980s, the breakup of the Soviet bloc in Eastern Europe
   and the growing preoccupation of Soviet leaders with massive internal
   political and economic difficulties forced the Japanese and United
   States governments to reassess their longstanding alliance against the
   Soviet threat. Officials of both nations had tended to characterize
   the security alliance as the linchpin of the relationship, which
   should have priority over economic and other disputes. Some Japanese
   and United States officials and commentators continued to emphasize
   the common dangers to Japan- United States interests posed by the
   continued strong Soviet military presence in Asia. They stressed that
   until Moscow followed its moderation in Europe with major
   demobilization and reductions in its forces positioned against the
   United States and Japan in the Pacific, Washington and Tokyo needed to
   remain militarily prepared and vigilant.

<p>Increasingly, however, other perceived benefits of close Japan- United
   States security ties were emphasized. The alliance was seen as
   deterring other potentially disruptive forces in East Asia, notably
   the Democratic People's Republic of Korea (North Korea). Ironically,
   some United States officials noted that the alliance helped keep
   Japan's potential military power in check and under the supervision of
   the United States.

<p>The post-Cold War environment strengthened the relative importance of
   economic prowess over military power as the major source of world
   influence in the early 1990s. This shift affected the perceived
   relative standing of Japan, the United States, and other powers.
   Increasingly, Japan was expected to shoulder international aid and
   economic responsibilities that in the past were discharged by the
   United States and other Western countries.

<p>The declining Soviet threat, the rising power of the Japanese economy,
   increasingly close United States interaction (and related disputes)
   with Japan, and other factors led by 1990 to a decided shift in United
   States opinion about Japan and to less marked but nonetheless notable
   shifts in Japanese opinion. In the United States, this shift was
   reflected in questions about which was the more serious, the military
   threat from the Soviet Union or the economic challenge from Japan. In
   a series of polls in 1989 and 1990, most respondents considered the
   challenge from Japan the more serious. Similarly, poll data from early
   1990 showed that most Japanese considered negative United States
   attitudes toward Japan a reflection of United States anger at
   "America's slipping economic position." Meanwhile, Japanese opinion
   was showing greater confidence in Japan's ability to handle its own
   affairs without constant reference--as in the past--to the United
   States. Japan's belief in United States reliability as a world leader
   also lessened.

<p>In both countries, new or "revisionist" views of the Japan- United
   States relationship were promoted. In Japan some commentators argued
   that the United States was weak, dependent on Japan, and unable to
   come to terms with world economic competition. They urged Japan to
   strike out on a more independent course. In the United States,
   prominent commentators warned of a Japanese economic juggernaut, out
   of control of the Japanese government, which needed to be "contained"
   by the United States.

<p>At the same time, it was easy to overstate the changes in opinion in
   both countries. The Japanese still considered the United States
   positively as their closest friend, the principal guardian of their
   external security, their most important economic partner and market,
   and the exemplar of a life-style that had much to offer--and much to
   envy. Moreover, the vast majority of Americans still viewed Japan
   positively, had high respect for Japanese accomplishments, and
   supported the United States defense commitment to Japan.

<p>In the years after World War II, Japan's relations with the United
   States were placed on an equal footing for the first time at the end
   of the occupation by the Allied forces in April 1952. This equality,
   the legal basis of which was laid down in the peace treaty signed by
   forty-eight Allied nations and Japan, was initially largely nominal,
   because in the early postoccupation period Japan required direct
   United States economic assistance. A favorable Japanese balance of
   payments with the United States was achieved in 1954, mainly as a
   result of United States military and aid spending in Japan.

<p>The Japanese people's feeling of dependence lessened gradually as the
   disastrous results of World War II subsided into the background and
   trade with the United States expanded. Self-confidence grew as the
   country applied its resources and organizational skill to regaining
   economic health. This situation gave rise to a general desire for
   greater independence from United States influence. During the 1950s
   and 1960s, this feeling was especially evident in the Japanese
   attitude toward United States military bases on the four main islands
   of Japan and in Okinawa Prefecture, occupying the southern two-thirds
   of the Ryukyu Islands.

<p>The government had to balance left-wing pressure advocating
   dissociation from the United States against the realities of the need
   for military protection. Recognizing the popular desire for the return
   of the Ryukyu Islands and the Bonin Islands (also known as the
   Ogasawara Islands), the United States as early as 1953 voluntarily
   relinquished its control of the Amami group of islands at the northern
   end of the Ryukyu Islands. But the United States made no commitment to
   return Okinawa, which was then under United States military
   administration for an indefinite period as provided in Article 3 of
   the peace treaty. Popular agitation culminated in a unanimous
   resolution adopted by the Diet in June 1956, calling for a return of
   Okinawa to Japan.

<p>Bilateral talks on revising the 1952 security pact began in 1959, and
   the new Treaty of Mutual Cooperation and Security was signed in
   Washington on January 19, 1960. When the pact was submitted to the
   Diet for ratification on February 5, it became the subject of bitter
   debate over the Japan-United States relationship and the occasion for
   violence in an all-out effort by the leftist opposition to prevent its
   passage. It was finally approved by the House of Representatives on
   May 20. Japan Socialist Party deputies boycotted the lower house
   session and tried to prevent the LDP deputies from entering the
   chamber; they were forcibly removed by the police. Massive
   demonstrations and rioting by students and trade unions followed.
   These outbursts prevented a scheduled visit to Japan by President
   Dwight D. Eisenhower and precipitated the resignation of Prime
   Minister Kishi Nobusuke, but not before the treaty was passed by
   default on June 19, when the House of Councillors failed to vote on
   the issue within the required thirty days after lower house approval.

<p>Under the treaty, both parties assumed an obligation to assist each
   other in case of armed attack on territories under Japanese
   administration. (It was understood, however, that Japan could not come
   to the defense of the United States because it was constitutionally
   forbidden to send armed forces overseas. In particular, the
   constitution forbids the maintenance of "land, sea, and air forces."
   It also expresses the Japanese people's renunciation of "the threat or
   use of force as a means of settling international disputes".
   Accordingly, the Japanese find it difficult to send their
   "self-defense" forces overseas, even for peace-keeping purposes.) The
   scope of the new treaty did not extend to the Ryukyu Islands, but an
   appended minute made clear that in case of an armed attack on the
   islands, both governments would consult and take appropriate action.
   Notes accompanying the treaty provided for prior consultation between
   the two governments before any major change occurred in the deployment
   of United States troops or equipment in Japan. Unlike the 1952
   security pact, the new treaty provided for a ten-year term, after
   which it could be revoked upon one year's notice by either party. The
   treaty included general provisions on the further development of
   international cooperation and on improved future economic cooperation.

<p>Both countries worked closely to fulfill the United States promise,
   under Article 3 of the peace treaty, to return all Japanese
   territories acquired by the United States in war. In June 1968 the
   United States returned the Bonin Islands (including Iwo Jima) to
   Japanese administration control. In 1969 the Okinawa reversion issue
   and Japan's security ties with the United States became the focal
   points of partisan political campaigns. The situation calmed
   considerably when Prime Minister Sato Eisaku visited Washington in
   November 1969, and in a joint communiqué signed by him and President
   Richard M. Nixon, announced the United States agreement to return
   Okinawa to Japan in 1972. In June 1971, after eighteen months of
   negotiations, the two countries signed an agreement providing for the
   return of Okinawa to Japan in 1972.

<p>The Japanese government's firm and voluntary endorsement of the
   security treaty and the settlement of the Okinawa reversion question
   meant that, two major political issues in Japan-United States
   relations were eliminated. But new issues arose. In July 1971, the
   Japanese government was surprised by Nixon's dramatic announcement of
   his forthcoming visit to the People's Republic of China. Many Japanese
   were chagrined by the failure of the United States to consult in
   advance with Japan before making such a fundamental change in foreign
   policy. The following month, the government was again surprised to
   learn that, without prior consultation, the United States had imposed
   a 10 percent surcharge on imports, a decision certain to hinder
   Japan's exports to the United States. Relations between Tokyo and
   Washington were further strained by the monetary crisis involving the
   December 1971 revaluation of the Japanese yen.

<p>These events of 1971 marked the beginning of a new stage in relations,
   a period of adjustment to a changing world situation that was not
   without episodes of strain in both political and economic spheres,
   although the basic relationship remained close. The political issues
   between the two countries were essentially security-related and
   derived from efforts by the United States to induce Japan to
   contribute more to its own defense and to regional security. The
   economic issues tended to stem from the ever-widening United States
   trade and payments deficits with Japan, which began in 1965 when Japan
   reversed its imbalance in trade with the United States and, for the
   first time, achieved an export surplus.

<p>The United States withdrawal from Indochina in 1975 and the end of the
   Second Indochina War meant that the question of Japan's role in the
   security of East Asia and its contributions to its own defense became
   central topics in the dialogue between the two countries. United
   States dissatisfaction with Japanese defense efforts began to surface
   in 1975 when Secretary of Defense James A. Schlesinger publicly
   stigmatized Japan as a passive defense partner.

<p>United States pressures continued and intensified, particularly as
   events in Iran and elsewhere in the Middle East after 1979 caused the
   United States to relocate more than 50 percent of its naval strength
   from East Asian waters to the Indian Ocean. Japan was repeatedly
   pressed not only to increase its defense expenditures and build up its
   antisubmarine and naval patrol capabilities but also to play a more
   active and positive security role generally.

<p>The Japanese government, constrained by constitutional limitations and
   strongly pacifist public opinion, responded slowly to pressures for a
   more rapid buildup of its Self-Defense Forces (SDF). It steadily
   increased its budgetary outlays for those forces, however, and
   indicated its willingness to shoulder more of the cost of maintaining
   the United States military bases in Japan. In 1976 the United States
   and Japan formally established a subcommittee for defense cooperation,
   in the framework of a bilateral Security Consultative Committee
   provided for under the 1960 security treaty. This subcommittee, in
   turn, drew up new Guidelines for Japan-United States Defense
   Cooperation, under which military planners of the two countries have
   conducted studies relating to joint military action in the event of an
   armed attack on Japan.

<p>On the economic front, Japan sought to ease trade frictions by
   agreeing to Orderly Marketing Arrangements, which limited exports on
   products whose influx into the United States was creating political
   problems. In 1977 an Orderly Marketing Arrangement limiting Japanese
   color television exports to the United States was signed, following
   the pattern of an earlier disposition of the textile problem. Steel
   exports to the United States were also curtailed, but the problems
   continued as disputes flared over United States restrictions on
   Japanese development of nuclear fuel- reprocessing facilities,
   Japanese restrictions on certain agricultural imports, such as beef
   and oranges, and liberalization of capital investment and government
   procurement within Japan.

<p>To respond to the call, from its allies and from within the country as
   well, for a greater and more responsible role in the world, Japan
   developed what Ohira Masayoshi, after he became prime minister in
   December 1978, called a "comprehensive security and defense strategy
   to safeguard peace." Under this policy, Japan sought to place its
   relations with the United States on a new footing--one of close
   cooperation but on a more reciprocal and autonomous basis, and on a
   global scale.

<p>This policy was put to the test in November 1979, when radical
   Iranians seized the United States embassy in Tehran, taking sixty
   hostages. Japan reacted by condemning the action as a violation of
   international law. At the same time, Japanese trading firms and oil
   companies reportedly purchased Iranian oil that had become available
   when the United States banned oil imported from Iran. This action
   brought sharp criticism from the United States of Japanese government
   "insensitivity" for allowing the oil purchases and led to a Japanese
   apology and agreement to participate in sanctions against Iran in
   concert with other United States allies.

<p>Following that incident, the Japanese government took greater care to
   support United States international policies designed to preserve
   stability and promote prosperity. Japan was prompt and effective in
   announcing and implementing sanctions against the Soviet Union
   following the Soviet invasion of Afghanistan in December 1979. In
   1981, in response to United States requests, it accepted greater
   responsibility for defense of seas around Japan, pledged greater
   support for United States forces in Japan, and persisted with a steady
   buildup of the SDF.

<p>A qualitatively new stage of Japan-United States cooperation in world
   affairs appeared to be reached in late 1982 with the election of Prime
   Minister Nakasone Yasuhiro. Officials of the Ronald Reagan
   administration worked closely with their Japanese counterparts to
   develop a personal relationship between the two leaders based on their
   common security and international outlook. Nakasone reassured United
   States leaders of Japan's determination against the Soviet threat,
   closely coordinated policies with the United States toward such Asian
   trouble spots as the Korean Peninsula and Southeast Asia, and worked
   cooperatively with the United States in developing China policy. The
   Japanese government welcomed the increase of United States forces in
   Japan and the western Pacific, continued the steady buildup of the
   SDF, and positioned Japan firmly on the side of the United States
   against the threat of Soviet international expansion. Japan continued
   to cooperate closely with United States policy in these areas
   following Nakasone's term of office, although the political leadership
   scandals in Japan in the late 1980s made it difficult for newly
   elected President George Bush to establish the same kind of close
   personal ties that marked the Reagan years.

<p>A specific example of Japan's close cooperation with the United States
   included its quick response to the United States call for greater host
   nation support from Japan following the rapid realignment of
   Japan-United States currencies in the mid-1980s. The currency
   realignment resulted in a rapid rise of United States costs in Japan,
   which the Japanese government, upon United States request, was willing
   to offset. Another set of examples was provided by Japan's willingness
   to respond to United States requests for foreign assistance to
   countries considered of strategic importance to the West. During the
   1980s, United States officials voiced appreciation for Japan's
   "strategic aid" to countries such as Pakistan, Turkey, Egypt, and
   Jamaica. Prime Minister Kaifu Toshiki's pledges of support for East
   European and Middle Eastern countries in 1990 fit the pattern of
   Japan's willingness to share greater responsibility for world
   stability.

<p>Despite complaints from some Japanese businesses and diplomats, the
   Japanese government remained in basic agreement with United States
   policy toward China and Indochina. The government held back from
   large-scale aid efforts until conditions in China and Indochina were
   seen as more compatible with Japanese and United States interests. Of
   course, there also were instances of limited Japanese cooperation.
   Japan's response to the United States decision to help to protect
   tankers in the Persian Gulf during the Iran-Iraq War (1980-88) was
   subject to mixed reviews. Some United States officials stressed the
   positive, noting that Japan was unable to send military forces because
   of constitutional reasons but compensated by supporting the
   construction of a navigation system in the Persian Gulf, providing
   greater host nation support for United States forces in Japan, and
   providing loans to Oman and Jordan. Japan's refusal to join even in a
   mine-sweeping effort in the Persian Gulf was an indication to some
   United States officials of Tokyo's unwillingness to cooperate with the
   United States in areas of sensitivity to Japanese leaders at home or
   abroad.

<p>The main area of noncooperation with the United States in the 1980s
   was Japanese resistance to repeated United States efforts to get Japan
   to open its market more to foreign goods and to change other economic
   practices seen as adverse to United States economic interests. A
   common pattern was followed. The Japanese government was sensitive to
   political pressures from important domestic constituencies that would
   be hurt by greater openness. In general, these constituencies were of
   two types--those representing inefficient or "declining" producers,
   manufacturers, and distributors, who could not compete if faced with
   full foreign competition; and those up-and-coming industries that the
   Japanese government wished to protect from foreign competition until
   they could compete effectively on world markets. To deal with domestic
   pressures while trying to avoid a break with the United States, the
   Japanese government engaged in protracted negotiations. This tactic
   bought time for declining industries to restructure themselves and new
   industries to grow stronger. Agreements reached dealt with some
   aspects of the problems, but it was common for trade or economic
   issues to be dragged out in talks over several years, involving more
   than one market-opening agreement. Such agreements were sometimes
   vague and subject to conflicting interpretations in Japan and the
   United States.

<p>During the 1970s and 1980s, United States administrations had favored
   an issue-by-issue approach in negotiating such economic disputes with
   Japan. This approach ostensibly limited the areas of dispute. But it
   resulted in widespread negative publicity, at a time when changing
   economic and security circumstances were causing both countries to
   reevaluate the relationship. Notable outpourings of United States
   congressional and media rhetoric critical of Japan accompanied the
   disclosure in 1987 that Toshiba had illegally sold sophisticated
   machinery of United States origin to the Soviet Union, which
   reportedly allowed Moscow to make submarines quiet enough to avoid
   United States detection, and the United States congressional debate in
   1989 over the Japan-United States agreement to develop a new fighter
   aircraft--the FSX--for Japan's Air Self- Defense Force.

<p>A new approach was added in 1989. The so-called Structural Impediments
   Initiative was a series of talks designed to deal with domestic
   structural problems limiting trade on both sides. After several rounds
   of often contentious talks, agreements were reached in April and July
   1990 that promised major changes in such sensitive areas as Japanese
   retailing practices, land use, and investment in public works. The
   United States pledged to deal more effectively with its budget deficit
   and to increase domestic savings. United States supporters saw the
   Structural Impediments Initiative talks as addressing fundamental
   causes of Japan-United States economic friction. Skeptics pointed to
   them as ways for officials to buy time and avoid an acute crisis in
   Japan-United States relations. The Bill Clinton administration decided
   to end the Structural Impediments Initiative in the summer of 1993 as
   a framework for dealing with United States-Japan bilateral relations.

