Rescuing the U.S.-Japan Alliance

Howard H Baker Junior & Ellen L Frost. Foreign Affairs. Volume 71, Issue 2. Spring 1992.

I

At the start of 1992 the U.S.-Japan alliance was stood on its head. In December the two countries had marked the fiftieth anniversary of the Japanese attack on Pearl Harbor with dignity and restraint. Just a month later, after President Bush's trip to Tokyo, the two countries were publicly bickering with a vehemence and bitterness entirely uncharacteristic of a friendly alliance.

If President Bush had visited Japan in early December, as originally planned, he and Prime Minister Kiichi Miyazawa would perhaps have gone further in symbolically healing the wounds of war and shifting the political focus to the future. But these lofty purposes were all but lost in the cacophony of criticism from both sides of the Pacific that assailed the visit and its participants. Also lost in the noise were a number of potentially meaningful agreements, including a common effort to revitalize the American and Japanese economies as well as an agreement to open the Japanese computer market to greater world competition.

II

How could an occasion designed to reinforce and reinvigorate the alliance have deteriorated so dramatically? Part of the answer is surely election-year politics, which caused the postponement of the president's trip in the first place. Another part is the frustrating Japanese tactic of waiting until the pressure becomes unbearable before making any move.

Yet well before the president's trip tension had been building. Japan and the United States entered the 1990s resembling two sparring adolescents: prickly, intense, awkward, critical and self-righteous.

Many Japanese harbor attitudes characterized by a certain degree of resentment, self-pity, hypersensitivity to criticism from Washington and a limited understanding of Japan's global responsibilities. They see America as a nation in decline, plagued with crime and drugs and riddled with undisciplined minorities and immigrants. Japanese embarrassment over Tokyo's slow response to the Gulf War has given way to a widespread feeling that the United States has gone too far in pushing Japan around. Instead of addressing their problems at home, Americans make Japan a scapegoat. No sooner does Tokyo give in to one demand from Washington than another takes its place.

The mood in America has become both tougher and more prickly. It has hardened in the sense that more and more Americans believe that Japan is "unfair" in its business dealings with the United States. This perception grew stronger with news that General Motors, America's largest producer of automobiles, would close several plants and lay off more than 70,000 workers. Another disturbing announcement was that Japan's trade surplus soared in 1991, reversing three years of decline.

Although Americans continue to consume Japanese products, large minorities of them now say they favor import restrictions targeted against Japan. According to one poll the number of respondents who said they make a "conscious effort" to avoid buying Japanese products unless they have no choice jumped from 49 percent in 1990 to 63 percent in 1992.

At the same time Americans have become extremely sensitive—some would say hypersensitive—to Japanese criticism. In the wake of the president's trip, offhand remarks by senior Japanese politicians disparaging America's work ethic sparked a wave of publicity and fueled widespread anger. Following one such episode 37 percent of Americans surveyed opined patriotically that the United States has "harder-working workers" than Japan, compared with only 19 percent two years ago. Two-thirds of the respondents said that anti-Japanese feelings in America are on the rise. Similar criticism from Americans or even from other countries' leaders does not have the same explosive effect.

These trends feed into a more subtle undercurrent of concern. Many leaders have worried for some time that the economic relationship is not healthy and that America has become dangerously dependent on Japan. Some analysts of Japan stress that the two societies are fundamentally different and that their interests are not necessarily compatible. They call for exceptional government actions to defend American interests against Japan's inexorable economic expansion and its efforts to influence political decisions in Washington.

This emphasis on differences rather than similarities may be exaggerated, but it has brought into focus a number of very real contrasts between the two societies. When it comes to a choice, the Japanese value group loyalty over individualism, social homogeneity over diversity, and hierarchy over equal opportunity. They value social order and believe that things work better in Japan because the Japanese are better educated and more reliable than foreigners. Accordingly they resist immigration as threatening the good of society in general and public health and safety in particular. Although their behavior toward foreigners is courteous and friendly, they tend to shun close contact.

These attitudes appear to be less pronounced in the younger generation, but they continue to form the core of a persistent "Japanese-ness" that makes it difficult to penetrate the Japanese market. Imports have soared to over $200 billion annually, but a certain psychological insularity persists. There is little appreciation for what Americans call "transparency" the publication or ready availability of regulations, technical specifications, bidding procedures and other information relevant to making a sale. This clubby aspect of doing business in Japan is Increasingly criticized as incompatible with the responsibilities of a major trading nation.

Paradoxically the two governments have never cooperated more closely. They have resolved (at least temporarily) a series of specific disputes, such as trade in semiconductors and access to Japanese construction projects. They have negotiated higher levels of Japanese support for U.S. troops based in Japan—the highest level of host-nation support in the world. They are cooperating closely to limit the spread of nuclear weapons and other destabilizing technologies. With some exceptions they are finding common ground on protecting the global environment.

In U.S. opinion polls Americans consistently say they trust Japan more than most other nations, and a solid majority would be willing to defend it if it were attacked. On the eve of the fiftieth anniversary of Pearl Harbor some 77 percent of American respondents said their feelings toward Japan were "friendly." Surveys taken since the president's trip, however, suggest a dropoff in such positive feelings. In some regions a "buy-American" movement has gathered steam. Nevertheless, Americans remain attracted to a range of things Japanese, from cars to sushi bars. Even the U.S. Congress, which erupts with anti-Japanese resolutions from time to time, has thus far stopped short of passing binding legislation that is specifically anti-Japanese. The Democratic presidential campaign, which many Japanese feared would become a hotbed of Japan-bashing, has begun on a level more restrained than many anticipated.

The Persian Gulf crisis was a success of sorts, albeit a deeply embittering one. The fact that Japanese were not willing to "put bodies on the line" angered many Americans. So did the length of time that elapsed before Tokyo came up with its contribution and the last-minute niggling about a "shortfall" that resulted from fluctuating exchange rates. But most Japanese felt they were being asked to pay for a war over which they were not consulted and did not really favor. In terms of consensus, precedent and political support the government began from zero. It ended up with a contribution second only to those of Saudi Arabia and Kuwait itself. The $13 billion sum represents a tax of roughly $100 on every man, woman and child in Japan.

In Japan the Persian Gulf crisis polarized public opinion, just as it did elsewhere. Yet it also stimulated a consensus in favor of more global involvement. Characteristically inward-looking Japanese attitudes are still pervasive, though they appear to be diminishing. Support for some kind of participation in U.N. peacekeeping forces, while still controversial, has gained ground. The belated dispatch of minesweepers to the gulf should be seen in this broader context. Only a few years earlier such a move would have been impossible. Japan may have strong traditions that differ from America's, but it is not immobile.

III

Still the relationship is arguably in some danger. Has the collapse of communism in the U.S.S.R. punctured the raison d'etre of the Japan-U.S. alliance? Or will it free up the two countries to build a new partnership? What might such a partnership look like?

The dreams and visions of each side are by no means identical. The Japanese dream includes: avoidance of war at all costs; elimination of nuclear weapons; noncombat contributions to U.N. peacekeeping; substantial foreign aid; quiet diplomacy; minimal security efforts, and none at all outside Japan's territorial waters; diversified sources of food and raw materials; trade and investment ties with all nations; economic preeminence through excellence in science and technology; respect from the world community; and a higher living standard for a homogenous population through lower land and housing prices and more leisure opportunities.

In this vision the role of the United States is that of a benign older brother, who nonetheless accepts Japan as a more equal partner. The United States remains a military superpower and a global policeman, although a more cautious one. American strength keeps the world safe so that Japanese companies can strive for preeminence even while Japan as nation remains "number two." Americans are allowed to press gently for the liberalization of the Japanese economy but must tolerate its unique aspects because they understand Japanese culture.

The American vision includes: the pursuit of international human rights and democracy under American leadership, likely to result in pro-Americanism and goodwill throughout the world; the capability to combat aggression without substantial American casualties or heavy economic burdens; control of oil and other vital resources by friendly nations; leadership in science and technology; respect and cooperation from allies and friends; and a higher living standard for a heterogeneous population through jobs, consumption and imports.

In the American view the role of Japan is that of a good ally and good-natured business partner. Japan should share American goals and contribute substantially, when asked, to U.S. operations overseas. It should also inject democratic and humanitarian values into its aid and investment programs, share technology freely with other friendly nations, try to steer the steady expansion of its companies in beneficial directions without behaving too overtly like "Japan, Inc.," open domestic markets more completely, make productive investments in the United States that create good jobs for Americans, send high-quality products to American consumers, accept more immigrants, end discrimination against minorities and women and relax.

Americans are ambivalent on many key questions, such as whether it is a good thing for Tokyo to send Japanese forces overseas. On foreign aid they want Japan to do even more (it is already the world's largest or second largest donor, depending on exchange rates), but they are uncomfortable with the inevitable economic influence that this fosters. They want Japan to share technology but are suspicious of proposed cooperative research programs. Confused and dismayed by these mixed signals, and frequently underestimating the diversity of American opinion, caught in the middle.

IV

Neither the United States nor Japan will necessarily conform to the other's dreams. Japan will remain an ally but will pursue its agenda more assertively and without always seeking to harmonize it with Washington. While the two countries will remain very important for each other, the United States will shrink from a position of overwhelming weight and importance for Japan to one of more normal proportions.

American dependence on Japan for technology and industrial components is likely to become more widely recognized (and politicized). Japan will continue to be a competitor, collaborator and catalyst, boosting quality and forging new competitive patterns, but forcing painful dislocations as well. Japanese purchases of U.S. government securities have fallen off for the time being, but dependence on Japanese capital will remain substantial as long as the American savings rate remains low.

Assuming (perhaps optimistically) a peaceful and democratic Russia, the political and security relationship with the United States will lose some, but by no means all, of its immediacy. The region gaining correspondingly more influence in Tokyo will be Asia. Indeed this trend is well under way.

Asian countries have long received the bulk of Japanese aid even though most of them are among the least poor. In many parts of Asia, Japan has displaced the United States as a model for economic development. Japan's annual sales to Asia have recently surpassed those to the United States and so has the rate of new investment. Japanese companies, already well represented throughout the region, have been positioning themselves to enter new markets in Vietnam, Cambodia and possibly Mongolia and the Russian Far East. Although this expansion is driven primarily by commercial concerns rather than politics, Japanese policymakers are now finding in Asia a potential counterweight to the regional integration of the European and North American markets, where Japan has encountered considerable hostility. For all these reasons the United States will have less overall influence with Japan, and Asia will have more.

At the same time Asia will also remain very important to the United States, and hence it is an area of potential U.S.-Japan contention. Short of a total breakdown of the world trading system, the danger of a trade bloc excluding the United States is remote. Still, commercial competition is bound to grow, and our political and security interests are not identical. Tokyo has limited interest in publicly promoting democracy and human rights in Asia, at least not as Washington defines and promotes them. The predominant view among Japanese government officials is that Americans are naive for insisting on them so stubbornly. They believe that many if not most developing countries have yet to reach the stage of development where it is reasonable to expect greater democratic processes. While progress toward democracy will henceforth be one of Japan's criteria for aid, Tokyo prefers quiet diplomacy and backstage maneuvering to American-style public diplomacy and unilateral economic sanctions.

A prime example is China. Many Japanese were deeply disturbed by the Tiananmen Square tragedy at the time, but they wish to avoid offending Beijing. They also understand, and to some extent share, the Chinese leadership's fear of chaos and civil war. Human rights violations are regrettable, but the best long-run cure, they believe, is economic development. Neither Japan nor any other major country threatens to abolish normal trade with China, as the U.S. Congress does.

It is widely believed that Japan is unpopular in East Asia because of memories of World War II. Such memories certainly linger, and Japan's wartime behavior is an issue that will not go away. There has been some progress, including carefully negotiated apologies by the new emperor, by former Prime Minister Toshiki Kaifu and Foreign Minister Michio Watanabe. Nevertheless there is nothing comparable to the explicitness of German textbooks or the openness of German leaders. Japanese young people still do not learn much about the war in school. This is a political minefield in Tokyo, watched over vigilantly by the right wing and fenced off by an unenlightened Ministry of Education.

There is no enthusiasm anywhere in Asia for a vigorous Japanese military role, but other attitudes vary by region. In the Korean peninsula resentment against the Japanese remains strong even though American bases in Japan remain pivotal for the defense of South Korea. China also harbors much bitterness and suspicion. In Southeast Asia, however, Tokyo's prospects are bright. The Japanese used to be seen as a necessary evil, but now they are being seen as less evil and more necessary—and even—economically at least desirable.

Japan's political and security agenda in Asia, while far more limited than its economic interests, is now more extensive than at any time since World War II. It includes efforts to promote peace and reconciliation in both the Indochinese and Korean peninsulas. In so doing it cooperates closely with Washington.

Tokyo, however, will avoid endorsing formal Asia-wide security structures and institutions unless there is broad consensus among the nations of the Pacific Rim, including the United States. Along with the United States it is wary of the proposed conference on comprehensive security and cooperation in Asia, a counterpart to the Europe-based CSCE. Japan claims that Asian security challenges are too sensitive, and too varied, to be resolved in a huge, highly politicized forum. Tokyo thus looks with favor on subregional, ad hoc groupings, such as the special security framework for Cambodia and a possible "two plus four" arrangement to promote the reduction of tensions in, and the eventual unification of, the Korean peninsula. (The four would be the United States, Russia, China and Japan.)

Provided that the United States is not excluded, any number of confidence-building and dispute-settling mechanisms should be possible. This is a promising field. Such mechanisms might evolve informally within what Robert A. Scalapino calls "concentric arcs"—specifically constructed, open-ended, subregional security structures offering maximum flexibility and communication among the various players. Such arcs could bring together parties to a real or potential conflict and offer informal mediation services in a neutral setting. They could also gather and share information relevant to the fears of each side, such as the size of military forces and projected military exercises.

There is no shortage of subregional tensions and opportunities in Asia. These include the reduction and redeployment of American and Russian forces in the region, the potential unification of the Korean peninsula, the evolution of Indochina after decades of war, rival claims to the Spratly Islands, the reversion of Hong Kong to China and the political future of Taiwan. Once the process had been established, other arcs might even tackle the sticky issue of human rights in the region.

Washington and Tokyo are unlikely to take the initiative to propose informal groupings of this kind, but there is some chance that other nations will. Asian protagonists might welcome a forum that was smaller and less politicized than the United Nations, less legalistic than the World Court and more responsive to shared subregional concerns than standard bilateral alliances. They might also see the value of embedding Japan more firmly in a multilateral security web. Besides encouraging "good citizenship" in Asia on the part of Japan's political leaders, Tokyo's participation could serve as an extra "safety check" to ensure that Japan's military capabilities pose no threat to other countries. From Tokyo's (and Washington's) perspective, Japan's membership in subregional security structures would arguably open new avenues to shared security goals and ease the political strain of relying exclusively on the bilateral U.S.-Japan alliance.

If current trends prevail there is very little chance that Japan will become a major military power. Simple-minded projections that economic power automatically entails corresponding military power overlook both politics and history. The Japanese government is likely to maintain a respectable selfdefense force, gradually achieving its own limited goals. These include the ability to repel a limited, small-scale attack and defend sea-lanes out to a distance of 1,000 nautical miles. But there are simply no advantages that would accrue to Japan by embarking on a major military buildup. In fact there would be a number of disadvantages, such as higher taxes and the diversion of engineering skills from commercial products. Moreover neighboring Asian states would become deeply suspicious of Japan's motives and would distance themselves politically --and perhaps even economically—from Tokyo, reversing years of patient diplomacy.

Thus far the scenario is manageable, but in certain circumstances a more ominous pattern could emerge. If the United States still sways under the load of deficits and debts, fails to boost the competitiveness of its industry and allows its social and educational ills to fester, the Japanese would lose much of their remaining respect for Americans. Reciprocity in trade and investment would falter, if only because Americans would not have the assets to establish a position in the Japanese market even if it were more open. Spiraling trade friction in visible and politically sensitive industries would exacerbate protectionism and nationalism. More trade would be managed, but many American companies would lack the resources to modernize their facilities during the breathing spell.

In Japan one could see a resurgence of that element of the Japanese political psyche that identifies itself as Asian rather than Western in the modern industrial sense. Perceiving and subconsciously exaggerating—a common heritage of race, geography, culture and history, Japan's leaders would shun the West, downgrade their global goals, halt or reverse their commitments to open their markets and pursue an agenda in Asia that could run counter to Western ideals. Criticism of the United States would become sharper and more vocal. Japan's economic power in the region would solidify into a de facto trade and investment grouping, while the General Agreement on Tariffs and Trade (CAR) rules were ignored. Rather than relying on quiet diplomacy Tokyo would publicly criticize Washington for failing to understand Japanese goals in Asia. Meanwhile, in Japan, advocates of military autarky would accelerate autonomous programs and retreat from cooperative defense arrangements with the United States.

Even if there were no open break, mounting hostility would weaken the partnership and corrode the very core of the alliance. The United States would lower its military posture in Asia, and those forces that remained would serve primarily as buffers and only secondarily as allies. Japan would cement its economic hold on the region, solidifying a zero-sum network detrimental to U.S. interests. In a manner reminiscent of the bitter China debates of the early 1950s, Americans would point fingers and ask, "Who lost Asia?" There is no rational alternative to the alliance for either country, but slow deterioration could ultimately be as serious as an open break.

V

What will determine the future of the American-Japanese partnership?

Much depends on the global political environment, especially the fate of the former Soviet Union, if present trends continue, a nuclear arsenal will be worth less and less as a meaningful criterion of superpower status. Other things being equal, nonnuclear economic powers such as Japan and Germany will gain influence compared to nuclear powers with troubled economies, such as the United States and France. Nuclear proliferation in unstable regions of the world remains a serious problem, but the danger of all-out nuclear war has shrunk dramatically.

If the U.S.-Japan alliance truly needs new threats, as some argue, it will not be hard to find them. The succession of power in both China and North Korea, together with efforts to reunite the Korean peninsula, have the potential to change the face of Asia. Pyongyang's announced willingness to permit international inspections of its nuclear facilities is encouraging, but the example of Iraq is a reminder that clandestine development of nuclear weapons cannot be ruled out. Also to be watched are instability in the Philippines and possibly Indonesia, the durability of the Cambodia settlement, the fate of Hong Kong and the evolution of the China-Taiwan relationship. There is no shortage of threats in the rest of the world either. To name just one, militant Islamic fundamentalism is avowedly hostile to most of what Japan and America have stood for over decades.

All of these threats argue for a continued U.S. military presence in Asia. Except in Korea the U.S. role in Asian security contingencies is not clearly defined. But at a minimum U.S. forces serve to balance and stabilize the various regional tensions. For this function as well as for military contingencies the U.S.-Japan alliance is crucial.

Equally crucial to Asian stability and growth are the eventual success of the Uruguay Round of CAR negotiations, the openness of the European Community and the proposed North American Free Trade Area, and ultimately the future of the global free-trade system. If the postwar trading system collapsed, Japan would be among those suffering the sharpest dislocations.

Even more than the global political environment, domestic politics ultimately drives foreign policy. In the long run whether Japan grows into a world leadership role commensurate with its economic strength will depend on developments at home. But in determining the short-range agenda and the "atmospherics" of U.S.-Japan relations, domestic politics in the United States are more decisive than domestic politics in Japan.

Recent polls indicate that a growing number of Americans have lost confidence in their economic future. In this context they see Japan's economic power surpassing that of the United States and threatening their jobs. The same Americans who buy Japanese cars, respect Japan's accomplishments and are willing to defend Japan if attacked also see Japan as pursuing only its own interests, and doing so more relentlessly and successfully than other nations—at the expense of the United States.

Japan has become a lightning rod, attracting complaints and illuminating the absence of a cohesive U.S. industrial strategy. Americans are normally optimistic, but Japan's success at a time of their own growing uncertainty makes them feel increasingly uneasy about their future. They project a lot of this uneasiness into individual episodes involving Japanese, such as the proposed codevelopment of a fighter support aircraft (the FSX) or the Japanese purchase of New York's Rockefeller Center.

To worried Americans, Japan has also become a mirror reflecting American values. Savings, hard work and education—the keys to Japanese success—come straight from Benjamin Franklin and the Pilgrims. It is disconcerting to think that those values are being applied more consistently in Japan than in the United States. This helps to explain why Japan, real or perceived, is identified as part of almost every U.S. problem in America's domestic debate. It is also part of almost very solution. There is growing recognition that America's future depends on much more than whether the Japanese buy more cars made in Detroit. The key questions instead are whether the United States can forge a consensus strong enough to reduce its budget deficits, generate productive investment, reverse the decline in education and make meaningful progress in overcoming social problems.

The central questions on the other side of the Pacific are also domestic and political. For the average Japanese U.S.-Japan tensions highlight the weakness of their own leadership. Whatever they felt about the Gulf War to begin with, they were critical of the way their government handled it. Some felt that the Japanese government lacked vision, and most believed that it simply kowtowed to American pressure. Almost everyone recognized that decisive commitments took so long to emerge that their diplomatic value was lost.

The Japanese political process makes creative policymaking difficult and rapid decisions impossible. What counts at the highest level is not issues or leadership, but money from interest groups and deals between factions. The socialists and the communists, who have no real chance of governing, seek opportunities to embarrass the government whenever they can. To break the frequent deadlocks, Japanese policymakers are forced to invoke foreign pressure. All this adds up to a glacial and seemingly grudging pattern of decision-making that undermines Japan in American eyes and tarnishes the value of the concession or contribution in question.

Short-term prospects for reform are not encouraging. Former Prime Minister Kaifu staked his political leadership on the need for reform. He lost. Prime Minister Miyazawa has put the whole issue aside. Yet over time developments external to the Liberal Democratic Party may force an improved electoral system and better regulation of "money politics." Prospects for reform depend, among other things, on whether the opposition parties can shed discredited ideologies and become more attractive to voters, whether new regulations will curtail political donations from corporations and banks, and whether public discontent can pry open the grip of the "iron triangle" of vested interests—regulated and protected industry sectors and their counterparts in the bureaucracy and the Diet.

The evolution of political leadership will influence the outcome of the much debated "internationalization" of Japan. This fashionable word means different things to different people. Both the Ministry of International Trade and Industry (MITI) and former Prime Minister Yasuhiro Nakasone are calling for genuinely "internal" internationalism, driven not by foreign pressure and fear of isolation but by self-confidence and a broader understanding of Japan's national interest.

What happens in the business sector is particularly crucial. Japanese companies are trying to adapt to other cultures as they extend their operations overseas, but the driving force is economic, not political or psychological. Many Americans sense not only an obsession with competition, both Japanese and foreign, but also an underlying nationalism that is pervasive and intense. While Americans debate questions of national identity, most Japanese companies have no such doubts. Despite their extraordinary technical achievements, their visions still seem narrow. As a MITI official put it, "Japanese companies must change their mentality. Some very big companies still believe that free trade means beating everyone with a combination of price-cutting and quality improvement, but that's not politically viable."

What will the next generation of Japanese leaders think about the United States? Japan's younger generation does not remember the American occupation (1945-52) and has no special respect for the United States. For all of its complicated "love-hate" aspects, the occupation nevertheless created certain good images of the United States among hungry and war-weary Japanese. Today's young people, well fed and secure, have been exposed to images of crime, drugs, illiteracy, poor workmanship and urban decay in American society. Japanese education, excellent as it is, does not address this challenge to the relationship. Japanese students memorize lots of facts about the United States, but they lack a true understanding of the spirit of America and its institutions.

On the other hand, young Japanese are traveling abroad in greater numbers. They are much more likely to have visited the United States than their parents. They are likely to return from their trip with strong impressions of American openness and friendliness. They may even help to overcome pervasive images of American violence, proving that it is at least occasionally possible to walk down the street without getting mugged.

VI

Despite their domestic differences American and Japanese visions of the global system do in fact overlap significantly. Like Americans, Japanese would prefer an open trade and investment climate abroad, maintained by friendly and stable democratic governments. This is a major reason why talk of a "war" between the United States and Japan is far-fetched.

Among the common interests security still ranks high, even in a post-Cold War world. While Japan will not be a major military power, Tokyo is likely to achieve a modest but respectable standing in international security affairs in a number of other ways. The Japanese government has already signaled more Japanese leadership on multilateral arms control and technology transfer restraints. It has proposed an international arms transfer registry to be maintained by the United Nations. Despite political setbacks in the Diet, it will probably see its way clear to assigning a modest number of arms-bearing troops to noncombat roles in U.N. peacekeeping operations in the not too distant future.

Given the nightmare of opening the U.N. Charter to revision by the member states, it is hard to see how Japan might achieve its goal of permanent membership in the Security Council. One way or another, however, Japan will have to be incorporated more solidly into the key deliberative bodies of the United Nations and other multilateral institutions. Meanwhile it will make the most of smaller groups, notably the Group of Seven leading industrialized nations.

It is primarily in the political-economic arena that a healthy and well-managed U.S. Japan alliance presents new opportunities. The two countries are now free to promote a global boom. The common agenda includes economic growth, new trade and investment opportunities, stable and diversified sources of energy and raw materials, a sustainable environment and a decent living standard for all.

Japanese officials are already exerting more leadership in the major international financial institutions, notably the World Bank and the International Monetary Fund, where they work in tandem with Americans. Japan has also urged greater international efforts to develop environmentally benign sources of energy and transportation for use around the world. Other challenges where Japanese skills and experience are making or could make a major difference include population and health, famine relief, disaster relief, antinarcotics enforcement and refugees.

High-technology cooperation between Japan, the United States and Europe is another rich field for Japanese leadership. The Japanese government has already opened a number of projects to foreign participation in such areas as "intelligent" manufacturing, aerospace, information processing and life sciences. A number of obstacles hamper in-depth cooperation in this area, such as the problem of language, asymmetries in the public/private funding mix and the U.S. government approval process. Still there is a need for such high visibility projects, both to take advantage of complementary strengths and to offset trade frictions. To be successful in both respects such projects must transcend academic research to engage private companies and create new markets. Over time they are likely to spur closer working relationships between high-technology companies, such as more two-way technology transfer and cross-membership on boards of directors.

Whatever global system ultimately emerges, it seems clear that the United States is still destined to lead for at least the first few decades of the 21st century. It will do so not only because of its size and resources, but also because of its inexhaustible optimism, energy and vision. As the threat of nuclear war subsides, its standing may be reduced from superpower to first among equals, and in certain categories not always even first. While the United States will remain the overall leader, its leadership style will have to change.

Along with Europe, Japan is bound to lead, too, but in a more limited way. Its political weakness and postwar sensitivities are considerable. For both political and cultural reasons Japanese leaders are slow to articulate ideas and values other than bland generalities about peace and harmony. The persistence of hidden trade barriers is a serious irritant to many nations, not just the United States. Nevertheless Japan's achievements are inspiring. As a model for overcoming poverty and defeat, creating comparative advantage and organizing society productively, the Japanese have much to offer the world.

Now that the two countries are approaching their fortieth anniversary as allies, their governments can afford to acknowledge their problems and the limitations of their partnership even while they build on each other's complementary strengths. They should recognize the very real danger of long-term deterioration and give up the search for perfect understanding, settling instead for sensitivity to each other's weaknesses, tolerance of each other's quirks and openness to each other's needs. They should repeatedly remind their citizens that disengagement would not only fail to solve any problems but would also unravel much of what has been achieved to their own great benefit. They should build and strengthen coalitions between people and groups that have a stake in a creative, constructive U.S.-Japan relationship, not put them on the defensive. Their alliance will never be perfectly harmonious, but it could be deeper and more mature, and therefore more fruitful.

The collapse of the Soviet threat should now make it easier to nourish the domestic roots of the alliance and to define a new global agenda. The days when Tokyo and Washington could patch up their bilateral alliance by concentrating exclusively on their security relationship are gone. Paradoxically, the alliance is now far more likely to realize its potential if its main focus is not bilateral, but domestic and global.