Rethinking the Bilateral Relationship: U.S. Policy Toward Japan

Abstract

This paper argues that the Bush Administration should seize the opportunity presented by the end of the Cold War to re-examine U.S. policies in the Asia-Pacific region, particularly our relationship with Japan. A new policy framework for U.S.-Japan relations should be established with a "dual-track" strategy that disentangles the security considerations of the Asia-Pacific region from the economic issues that have debilitated us in trade negotiations with Japan for the semiconductor industry as well as other strategic industries. By delinking these two concerns the U.S. can pursue a more coherent trade policy that offers real solutions to Japan's adversarial trade strategy and

increases our bargaining power during bilateral trade ne- gotiations.

In particular, a "dual-track" strategy will involve: (i)

removing Japan's advantage in trade negotiations by dis- entangling security and economic issues; (ii) establishing a

Helsinki-like process to address security issues in the Asia- Pacific region; (iii) creating an arms control-like negotiat- ing process for trade disputes; (iv) revising U.S. trade

policy and adjusting U.S. trade strategy to defend strategic

industries from Japan's adversarial trade practices to en- sure future international competitiveness; and (v) getting

our domestic house in order to create a border of strong defense by supporting strategic industries through macroeconomic policies.