preclude denial of market access and other actions detrimental to Japan's vital interests. Many of these arrangements aimed at “comprehensive security” take place in the market but have a rationale that transcends pure market forces. Many Americans have expressed concern over growing dependence on Japan in such areas as critical components, advanced materials, and advanced production equipment. Trends that Japanese observers might see as the expansion of healthy interdependence often are interpreted by Americans as an indication of unilateral loss of U.S. independence.

Traditionally, Japanese government and business have had a more cooperative relationship than has been the case U.S. government and business. But under way in both countries is political and economic change, with possible implications for these traditional patterns. Trends in this area will affect all aspects of U.S.-Japan relations, as well as the future direction of the world economy.

Recommendations
  1. It is imperative for the United States and Japan to continue and to expand private sector exchanges on issues related to trade, the world economy, direct investment, and technological competition and cooperation on a bilateral and multilateral basis, as appropriate. Needed is a greater mutual understanding of the differing assumptions and goals of Americans and Japanese regarding interdependence and national interests, particularly in light of ongoing changes in both countries.

  2. New institutions, such as APEC, can play a useful role in increasing private sector interactions, particularly regarding critical issues on which the current information base is thin or nonexistent. One possibility is an APEC-organized program of targeted information collection and exchange on trends in Asia Pacific production, trade, and investment, including the role of MNCs, in important industries such as electronics and automobiles. The United States, Japan, and APEC can play roles in meeting the larger need for international coordination and harmonization of trade and investment data.

NOTES AND REFERENCES

1 An expanded discussion of these issues can be found in Chapter 3 of the U.S. working group in this report.

2 An expanded discussion of this point can be found in Chapter 4 of the U.S. working group in this report.



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