The Action Program and Ongoing U.S.-Japan Trade Conflicts

For a detailed chronological discussion of all the various economic measures introduced through 1983, see the successive yearbooks on U.S.—Japan economic relations published by the Japan Economic Institute of America, now known as the Japan Economic Institute.Google Scholar

Report of the Advisory Committee for External Economic Issues“ (Tokyo, April 9, 1985). The establishment of the Office of Trade Ombudsman in 1982 was also part of the first package.Google Scholar

Japan 1986, An International Comparison (Tokyo: Keizai Koho Center, 1985), p. 36; and “The Japanese Government, External Measures: The U.S. Government’s Assessment of Their Implementation and Impact” (Washington, D.C.: Office of the United States Trade Representative, 1984), p. 2.Google Scholar

Business Week (April 8, 1984), p. 53.Google Scholar

Staff Working Paper, “The Effects of Targeted Import Surcharges” (Washington, D.C.: Congressional Budget Office, 1986); and “Costs and Benefits of Protection” ( Paris: Organization for Economic Cooperation and Development, 1985 ).Google Scholar

This debate had its roots in the past because Japan’s experience with Keynesian demand stimulation methods during the late 1970s was controversial. In response to U.S. pressure, the government adopted the “locomotive” thesis of economic growth, and set a real growth target of 7 percent in 1978. Prime Minister Fukuda encouraged “provisional and exceptional fiscal policies for positive expansion” in order to implement a proposal to help end the world recession caused by increased oil prices. The result was a dramatic increase in Japan’s annual fiscal deficits, from 7 trillion yen to 14 trillion yen in one year. By FY 1985, Japan’s ratio of outstanding long-term debt to GNP was 48.8 percent, and the debt service absorbed about 20 percent of the annual budget. (In FY 1984, the U.S. public debt/GNP was 33.8 percent. See Takuji Matsuzawa, “Keidanren’s Viewpoint on Government Spending and Future Administrative & Fiscal Reform, Keidanren Review (October 1985), p. 3.Google Scholar

The Keidanren (Japan Federation of Economic Organizations) is a private, nonprofit organization representing all branches of economic activity in Japan. It influence national policy formulation. The Keizai Doyukai is an economic organization for national policy studies. It is also a private, nonprofit organization, and is financed entirely through subscriptions; it, too, is quite influential.Google Scholar

In 1986, out of consideration for the sensitivities of neighboring Asian countries, he refrained from visiting the shrine again. A number of his cabinet members, however, made the pilgrimage.Google Scholar

Amakudari,or descent from heaven, is the traditional one-way retirement of government officials to industry. In the past, former high-level officials frequently became top managers in the industries which they regulated while in the bureaucracy. Until the mid-1970s, this was one of the key factors in the close government-business relationship.Google Scholar

Seizaburo Sato and Tetsuhisa Matsuzaki, “Policy Leadership by the Liberral Democrats,” Economic Eye (December 1984), pp. 25–32.Google Scholar

It is interesting to note that never before have so many zoku bosses been appointed simultaneously to ministerial posts as they were in December 1985 when Prime Minister Nakasone reshuffled his cabinet. Among them were then Finance Minister Takeshita, Transport Minister Mitsuzuka, and Agriculture, Forestry and Fisheries Minister Hata, each boss of the respective zoku.Google Scholar

Bureaucrats Rebellion Against Nakasone,“ The Oriental Economist (July 1985), p. 12.Google Scholar

Remarks made at a policy review meeting, Tokyo, June 18, 1985.Google Scholar

The Washington Post (July 31, 1985), p. F-1.Google Scholar

U.S.—Japan Joint Report on Sectoral Discussions,“ by Secretary of State George Shultz and Foreign Minister Shintaro Abe (Washington, D.C.: U.S. Department of State, January 10, 1986).Google Scholar

A report on the progress of the Action Program, released in September 1986 by the joint U.S.—Japan Trade Study Group (TSG), reviewed specific trade issues on a product-by-product and service-by-service basis, comparing observations and conclusions of its 1984 report with the Action Program progress. This study group, consisting of Japanese and American businessmen, found that although a great deal of work still had to be done, a lot of progress has been made in opening the Japanese marketplace to foreign goods and services. See “TSG Progress Report 1986” ( Tokyo, September 1986 ).Google Scholar

The Wall street Journal (August 29, 1986), p. 20.Google Scholar

The value of imports amounted to $100.4 billion, $4.3 billion less than the expected $104.7 billion.Google Scholar

The New York Times (January 18, 1986), p. 36.Google Scholar

The Japan Economic Journal (March 29, 1986), p. 5.Google Scholar

The Wall Street Journal (October 23, 1985), p. 36.Google Scholar

In 1986, Japan had just over 12,000 lawyers; in the United States, there were more than 600,000, with the largest American law firms employing between 400–800 attorneys. From The Washington Post (September 15, 1986 ), p. A10.Google Scholar

The Japan Economic Journal (September 6, 1986), p. 28.Google Scholar