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United States-Japan Trade, Commercial, and Economic Relations

United States-Japan Trade, Commercial, and Economic Relations

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Excerpt from United States-Japan Trade, Commercial, and Economic Relations: Hearing Before the Subcommittee on Trade of the Committee on Ways and Means, House of Representatives, One Hundred Third Congress, First Session, July 13, 1993

The Honorable Sam M. Gibbons (D., Fla.), Chairman of the Subcommittee on Trade, Committee on Ways and Means, U.S. House of Representatives, today announced that the Subcommittee will hold a public hearing on U.S. - Japan trade, commercial, and economic relations. The hearing will be held on Tuesday, July 13, 1993, in the main Committee hearing room, 1100 Long-worth House Office Building, beginning at 10:00 a.m.

Japan is one of the United States' most important trading partners. Japan is the second largest (Canada is the first) export market for U.S. goods and also the second largest source of U.S. imports (again behind Canada). In the post Cold War era, trade, commercial, and economic issues are likely to take on new significance in the overall U.S.-Japan relationship, which in the past has been influenced more by foreign policy and national security concerns.

The U.S.-Japan trade relationship has been as problematic as it has been important. U.S.-Japan trade frictions stem from a number of factors, the most obvious of which is the large merchandise trade surplus Japan has run with the United states and with the rest of the world (ROW). In 1992, Japan's surplus with the United States was approximately $48 billion and with the ROW, a record of $133 billion. A second source of difficulty has been Japan's failure to eliminate key barriers to market access. Such barriers include structural impediments, such as Japan's closed distribution system and Japanese land policy, and sectoral barriers in industries, including autos and auto parts, supercomputers, satellites, forestry products, agricultural products, telecommunications equipment, and construction. A third set of problems has arisen in conjunction with certain Japanese imports into the United States, particularly in key industries such as autos and steel. Finally, the U.S.-Japan trade relationship has been strained by allegations that Japanese-owned companies producing in the United States, the so-called "transplants," have engaged in anticompetitive practices.

Although the Clinton Administration's policy on trade is evolving, recent reports indicate that the President and his trade and economic officials intend to take a pragmatic, "results-oriented" approach to tackling problems in the U.S.-Japan economic relationship. Among the objectives of this approach are to enhance American goods and services' access to the Japanese market and to encourage Japanese "transplants" to source more from American companies.

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