## Relations with the United States

Japan Table of Contents

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Japan Table of Contents

Source: U.S. Library of Congress