Trade And Investment Relations Among The United States Canada And Japan

The economic futures of the United States, Canada, and Japan are tightly linked by the extremely powerful trade network these nations share. Yet because of trade and domestic policies aimed at preserving economic and, some argue, cultural integrity, there has at times been considerable friction among the three nations. Much of the recent trade animus of the U.S. has been aimed Japan, the country with the largest trade surplus with the United States. Canada, the largest trade partner of the U.S., maintains fiscal policies which resemble those of Japan, but has not been the focus of similar concern. Since the actions of each nation reverberate throughout the network, a full and accurate understanding of these complex relations will be essential if ongoing trade negotiations, policymaking, and international relations are to be constructive. The papers in this volume were developed from a conference that addressed the need to discover which structural determinants and policies shape the close economic ties among these nations. Leading experts on trade and macroeconomics from all three countries examine disproportionate saving rates, exchange rate volatility, varying industrial policies and levels of financial innovation, the effects of present tax policies and proposed reforms, and the dynamism of major Pacific nations and the leadership role Japan may play in U.S. relations with that region. Several important conclusions are reached by the contributors. They assert that Japan's trade barriers are relatively low overall and are comparable to those maintained by the United States and Canada, and that divergent fiscal policies have been the major source of macroeconomic imbalances between the United States and other major countries in the 1980s. They also conclude that current trade imbalances may persist for some time. The analyses offered here are likely to prove influential in future policymaking and will be of interest to a wide audience, including academic economists, government officials, and students of theoretical and policy issues of international trade, investment, and finance.

Japan and the United States are the two largest economic powers. Together they account for over 40% of world domestic product, for a significant portion of international trade in goods and services, and for a major portion of international investment. This economic clout makes the United States and Japan powerful actors in the world economy. Economic conditions in the United States and Japan have a significant impact on the rest of the world. Furthermore, the U.S.-Japan bilateral economic relationship can influence economic conditions in other countries. The U.S.-Japan economic relationship is very strong and mutually advantageous. The two economies are highly integrated via trade in goods and services -- they are large markets for each other's exports and important sources of imports. More importantly, Japan and the United States are closely connected via capital flows. Japan is the largest foreign source of financing of the U.S. national debt and will likely remain so for the foreseeable future, as the mounting U.S. debt needs to be financed and the stock of U.S. domestic savings remains insufficient to meet the demand. Japan is also a significant source of foreign private portfolio and direct investment in the United States, and the United States is the origin of much of the foreign investment in Japan. The relative significance of Japan and the United States as each other's economic partner has diminished somewhat with the rise of China as an economic power, and with U.S. economic ties with Canada and Mexico deepening as a result of the North American Free Trade Agreement (NAFTA). Nevertheless, analyses of trade and other economic data suggest that the bilateral relationship remains important, and policy leaders of both countries face the challenge of how to manage it. During the last decade policy leaders seem to have made a deliberate effort to drastically reduce the friction that prevailed in the economic relationship. On the one hand, this calmer environment has stabilized the bilateral relationship and permitted the two countries to focus their attention on other issues of mutual interest, such as national security. On the other hand, as some have argued, the friendlier environment masks serious problems that require more attention, such as continuing Japanese failure to resolve long-standing market access barriers to U.S. exports of autos and auto parts and flat glass and the failure of the two countries to reduce bilateral trade imbalances. Failure to resolve any of these outstanding issues could cause heightened friction between the two countries. U.S. and Japanese leaders have several options on how to manage their relationship including stronger reliance on the World Trade Organization; special bilateral negotiating frameworks and agreements; or a free trade agreement. Each option has its advantages and drawbacks and they are not necessarily mutually exclusive. This report will be updated as events warrant.

Two of the biggest issues facing nation states in the twenty-first century are the role of government in the management of national economies, and the cultivation of international trade and investment in an age of globalization. In Government, International Trade, and Laissez-Faire Capitalism Carin Holroyd offers a comprehensive comparison of Australian, Canadian, and New Zealand policies and strategies aimed at improving economic relations with Japan, the world's second largest economy. She illustrates negative consequences that result when governments withdraw from trade promotion and leave the development of commercial opportunities to the private sector. Holroyd focuses on how Australia, Canada, and New Zealand responded to the dramatic changes in the Japanese economy that followed the 1985 Plaza Accord and currency reforms. She examines trade promotional activities, efforts to coordinate business responses to the Japanese market, and the cultivation of Japanese investment, indicating how new paradigms of state involvement in the economy influenced international trading activity. Holroyd demonstrates that rather than responding proactively to changing conditions and new opportunities, the national business sectors stayed with traditional patterns of trade and investment, losing significantly in market share and export opportunities as a consequence.

From American master Ward Just, returning to his trademark territory of "Forgetfulness "and "The Weather in Berlin," an evocative portrait of diplomacy and desire set against the backdrop of America's first lost war

These proceedings include papers on Japan's World Role in the 1990s, the economic dimensions of Japan and North America, and Japan and North America as Partners in the Pacific Community. It also provides the concluding remarks.

A collection of essays, written by scholars and policymakers from the countries involved, explores the evolving alliance among Canada, Japan, and the United States. The book examines the three market-oriented democracies in their changing roles toward each other and show how they have moved beyond their separate, special, bilateral relationships into a dynamic three-way engagement.