Japan's economic woes provide U.S. firms business opportunities

The U.S. Bush administration is urging Japan to carry out "structural reforms" at all costs. The Sunday Akahata of June 24 reported on the Bush administration's aims:

The U.S. is sounding out Japan on the possibility of replacing the 1995 Japan-U.S. Automobile Agreement which expired in 2000 with a new one. The 1995 agreement obliges Japan to guarantee a certain quantity of U.S. cars and car parts sales in Japan. However, the U.S. is now dissatisfied with the sluggish sales of U.S. cars in Japan. To achieve a breakthrough, U.S. Secretary of Commerce Don Evans reportedly proposed concluding a new agreement in a meeting in January with Hiranuma Takeo, Japanese trade minister.

A Japanese government official irritatingly said that present Japan-U.S. relations involve friction that persists on any given issue.

The U.S. Clinton administration blatantly pressured Japan into opening its market for the benefit of U.S. firms and industry. Now, it is the Bush administration's turn to do so. Contrary to its initial promise that it would refrain from putting pressure on Japan for specific changes, the Bush Administration is strongly pushing for changes.

The Bush administration now insists that Japan's strengthened quarantine inspections of vegetables and strawberries is impeding U.S. agricultural exports.

President Bush in early June instructed for a survey to be initiated toward invoking safeguard action under Section 201 of the 1974 Trade Act, aimed at emergency restrictions on iron and steel imports to protect the domestic steel industry.

The Bush administration is moving towards seceding from the Kyoto Protocol which binds members with the duty to reduce their carbon dioxide emission levels to prevent global warming and has changed its energy policy into one of again promoting nuclear power generation. These moves show how faithful the U.S. Bush administration is to corporate interests.

The Bush administration is demanding that the Koizumi government prepare a new consultative framework to discuss four issues: economy and finance, trade, investment, and deregulation.

Open the market

The Bush administration is calling on Japan to carry out structural reforms, including the write-offs of bad loans held by banks.

Lawrence Lindsey, White House Assistance for Economic Affairs, in late May was quoted as telling the visiting secretaries of Japanese ruling coalition parties that structural reform will be retarded if the money is used to rescue firms that should go bankrupt. The LDP secretary reportedly accepted this argument and declared to promote reforms.

In May, the number of business failures was 1,700, the largest ever in a month period during 2001. The unemployment rate remains high at 4.8 percent. It is estimated that the write-off of bad loans will drive 200,000-300,000 small- and medium-sized enterprises into bankruptcy.

The U.S. is trying to take advantage of Japan's economic woes to acquire Japan's banks and other troubled firms at low prices.

Structural reforms which the U.S. call on Japan to carry out includes more. The bipartisan report entitled, "The United States and Japan: Advancing toward a Mature Partnership," which Richard Armitage, now U.S. deputy secretary of state, drew up as a proposal to Japan states: "Restoring the long-term health of the Japanese economy will require some short-term costs that Japanese politicians so far have refused to incur."

The report calls on the Japanese government to write off bad loans at the expense of the Japanese people's livelihoods and to go further to achieve continuous deregulation, abolition of trade barriers and an open market. Complete liberalization is what the report demands from Japan: national budget allotment to rapidly growing sectors, increased transparency in accounting and business rules and in the process of decision making on such rules, accelerated deregulation in telecommunication, and a free trade pact with the U.S.

The report stressed that the U.S. "does have legitimate interests when the lack of reform affects U.S. firms or endangers the global economy."

On this U.S. demand, an economic agency staff member said, "The U.S. argues that the economic crises in Asia and Japan were caused mainly by their inadequate economic and legal systems, and if these systems are changed to fit in with U.S. standards, everything will be fine. After all, that will help U.S. big businesses advance more easily into Japan's market."

According to a securities company employee, "Japan's three car manufacturers now affiliate themselves with foreign capital, and about 50 percent of shares on the market are held by foreign investors. Foreign capital-affiliated securities firms are in even stronger positions."

With the disposal of bad-loans as leverage, U.S. firms want Japan's domestic system to be changed for U.S. capital's benefits.

The Koizumi cabinet is so outspoken as to openly say that the structural reforms are necessary and that more people will lose their jobs.

Thus both Japan and the U.S. are putting major corporate interests first while neglecting pubic interests. U.S. expectations toward the Koizumi cabinet government is escalating.

Increasing U.S. pressure on Japan's military role

The U.S. Bush administration maintains that economic policy and security policy are inseparable. The U.S. Armitage report states precisely that if Japan's economy remains weak, "it will be less willing or able to play a larger role in the alliance."

This comes from the view that Japan, which is benefiting from exports to the U.S., must fully support U.S. security policy. They are expecting Japan to overcome the economic recession so that Japan will help cement Asian security. Some say that Bush's China policy is being advanced on the premise that the Japan-U.S. military alliance is reinforced.

This finds its expression in the U.S. claim on Japan's Koizumi cabinet to exercise the right to collective self-defense and to push ahead with Japan's economic structural reform.

Some people in Japan deny the U.S. pressure on Japan. But U.S. Secretary of State Colin Powell in his congressional testimony in mid March said that laissez-faire is not a U.S. policy toward Japan.

On this U.S. demand, an economic agency staff said, "The U.S. argues that the economic crises in Asia and Japan were caused mainly by their inadequate economic and legal systems, and if these systems are changed to fit in with U.S. standards, everything will be fine. After all, that will help U.S. big businesses advance more easily into Japan's market."

According to a securities company employee, "Japan's three car manufacturers now affiliate themselves with foreign capital, and about 50 percent of shares on the market are held by foreign investors. Foreign capital-affiliated securities firms are in stronger positions."

With the disposal of bad-loans as leverage, U.S. firms want Japan's domestic systems to be changed for U.S. capital's benefits.

The Koizumi cabinet is so outspoken as to openly say that the structural reforms are necessary and that more people will lose their jobs.

Thus both Japan and the U.S. are putting major corporate interests to big businesses first, while neglecting pubic interests. U.S. expectations toward the Koizumi cabinet government is escalating.

Increasing U.S. pressure on Japan's military role

The U.S. Bush administration maintains that economic policy and security policy are inseparable. The U.S. Armitage report says more precisely that if Japan's economy remains weak, "it will be less willing or able to play a larger role in the alliance."

This comes from the view that Japan, which is benefiting from exports to the U.S., must fully support U.S. security policy. They are expecting Japan to overcome the economic recession so that Japan will help cement Asian security. Some say that Bush's China policy is being advanced on the premise that the Japan-U.S. military alliance is reinforced.

This finds its expression in the U.S. claim on Japan's Koizumi cabinet to exercise the right to collective self-defense and to push ahead with Japan's economic structural reform.

Some people in Japan deny the U.S. pressure on Japan. But U.S. Secretary of State Colin Powell in his congressional testimony in mid March said that laissez-faire is not a U.S. policy toward Japan. (end)