That newfound fascination with China may be the best thing that could happen to the stormy marriage between Japan and the United States. At the least, it provides an alternative to a dangerous obsession. Japan’s unwillingness to lower trade barriers and its inability to shrink its trade surplus have dominated U. S. headlines for a decade. Bill Clinton’s promise to make trade policy “results oriented” (translation: to set numerical targets for U. S. products in the Japanese market) is only the latest U.S. campaign to stir up hard feelings in Japan. But as results-oriented trade policy runs up on the same rocks that have sunk many a previous initiative, China offers a welcome distraction. .Japan? Japan can wait.
It’s not that Japan no longer matters. Far from it. The United States trades four times as much with Japan as with China, and U.S. investment there is many times larger. In economic terms, Japan. the world’s second-largest economy, remains a far more important force. And the trade frictions that plague the relationship haven’t vanished: Japan’s surplus in goods trade with the United States will hit a record $60 billion this year, and U.S. companies from insurance to paper manufacturing still complain that Tokyo’s door is closed. But with China’s full-fledged emergence on the world stage, along with the headlong growth of such populous nations as Vietnam and Indonesia, Washington suddenly finds that it has other fish to fry in Asia. “That reduces the relative significance of our bilateral relationship,” says New York University political scientist David Denoon. “That’s good for Japan, and it’s good for us.”
Shifting focus makes sense. Despite its massive size, Japan is a mature economy; in the future, it probably won’t grow much faster than the United States. China, on the other hand, may average double-digit growth–with all the business opportunities that entails in the world’s most populous nation–for a decade to come. And politically, China is destined to assume the dominant role in Asia. Japan will always be a significant power, but it shouldn’t be treated as the center of Asia.
Nor does it want to be. America’s new Asian priorities have been eagerly encouraged by the Japanese themselves. “The better relations are between the U.S. and China, the better it is for Japan,” says Columbia University Japanologist Gerald Curtis. Tokyo lives in fear that U.S. hectoring over human rights and other issues will drive China back into its Communist-era isolation, interfere with China’s scheduled takeover of Hong Kong in 1997 and disrupt its own growing commerce with Beijing. Japan’s hand was also visible in last month’s Asia-Pacific Economic Cooperation summit in Seattle, which served both to reassure other Asian nations of America’s broader interests and to bring their trade surpluses–as distinct from Japan’s–more firmly into U.S. sights.
But the new diplomatic priorities haven’t eased the bargaining. Although Clinton and former prime minister Kiichi Miyazawa signed a grandly named “Framework for a New Economic Partnership” last July, negotiators have largely failed to fill in the details. Japan has flatly rejected U.S. demands to set targets for imports such as auto parts. “They have a sense that whatever the targets would be, they’d have great difficulty achieving them and we’d raise the barrier afterward,” confesses one U.S. diplomat. Even where agreement is within reach, it may not bring Washington the better trade numbers it so desperately wants. One example: although the United States contends that manufacturers would export more to Japan if they could open subsidiaries there more easily, few U.S. companies are clamoring to set up shop in high-cost Osaka. “Everybody’s focusing on China now, and a little bit on India,” says Donald Marron, chairman of investment bank PaineWebber.
For Japan, America’s Year of China may turn out to be the calm before the storm. If a global GATT trade pact is reached this month, the U. S.-Japan framework talks will take on a higher profile. Congress is set to stir the pot by reviving an expired 1988 law that lets the president slap sanctions on countries whose trade barriers he deems unfair. By spring, predicts University of Southern California scholar Mike Mochizuki, “there will be greater pressure on the president to get some concessions on trade.” But as China takes up more of Washington’s diplomatic attention, disputes with Tokyo may lose some of their urgency. The impending battle to end trade preferences for China until it improves its human-rights record will make our Japan problems look modest in comparison.
