U.S.–Japan economic relations face growing friction. Japan’s trade surplus with the United States, always a political problem, is at record levels. Yet these two economic colossi are becoming ever more integrated, creating systemic friction because of differing regulatory systems and philosophies about markets. Based on the experience of the Bush Administration’s Strategic Impediment Initiative and the Clinton Administration’s Framework talks, this study group sought to develop a new paradigm for U.S.–Japan economic negotiation, focusing on macroeconomic issues, regulatory reform, sector-specific problems, and a political dialogue. Bruce Stokes published a short paper informed by the group’s deliberations.