JAPAN – Finding the Dawn

By Geoff Uttmark

When Secretary of State Colin Powell visited Japan earlier this summer, the bi-lateral trade relationship that has come to symbolize both the similarities and differences between the world’s largest and second largest economies was undoubtedly high on his agenda. The U.S. – Japan Economic Partnership for Growth entered into by President Bush and Prime Minister Junichiro Koizumi on June 30th is only the latest of a long line of trade initiatives that date back to Admiral Mathew Perry’s visit to Tokyo Bay in 1853. The trade relationship between The Pacific Rivals* was contentious then, since Perry was an uninvited guest, and it is often still contentious today, given annual U.S. trade deficits with Japan of $70 to $80 billion. Never mind that the Japanese, on a per capita basis, actually consume more U.S. goods and services than vice versa. Details like this rarely influence populist rhetoric. But at senior policy-making levels on both sides of the Pacific there is acute awareness that together Japan and the U.S. account for fully 42 percent of all global production with economies that are fiscally, economically and strategically interdependent at many levels. The U.S., for instance, is Japan’s leading trading partner while Japan is the number one destination for U.S. agricultural exports and third overall for all U.S. exports. Beyond the bilateral relationship, Japan sits geographically atop the Indo – Asia – Australia triangle (Figure 1) within which the aggregate value of her foreign trade is equal to her trade with the U.S. The strong linkage of economic, strategic and financial interests is undoubtedly one reason why the Secretary of State headed for Japan instead of the Secretary of Commerce.

This is only an excerpt of JAPAN – Finding the Dawn

Content is restricted to subscribers. To continue reading please Log-In or view our subscription options.