Future Directions for U.S. Economic Policy Toward Japan

Task Force Report
Analysis and policy prescriptions of major foreign policy issues facing the United States, developed through private deliberations among a diverse and distinguished group of experts.

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During the last ten years, Japan has undergone a difficult period of economic stagnation. Only now is the country showing preliminary signs of emerging from an economic slowdown. In response to its difficulties, Japan is gradually making changes to its traditional financial system—changes driven by Japan’s desire to catch up with technological innovation and to resuscitate its economy. However, many of these reforms are controversial within Japan since they aim at the heart of traditional Japanese business practices. In a three-step conclusion, this Task Force outlines how the United States may integrate into and profit from Japan’s transitioning economic framework.

Although the controversy of Japan’s economic shift may cause the pace of reform to slow, this Task Force says that it also offers the United States an opportunity to sieze the intiative in its economic policy toward Japan. Chaired by M. Diana Newton  and directed by Laura D’Andrea Tyson, the Task Force examined structural reforms underway in the Japanese economy to determine whether they were fundamentally changing the way that business was being done in Japan. In assessing these developments, the Task Force came to three conclusions for U.S. economic policy toward Japan. First, the reforms that have been made are keeping with U.S. interests; second, by shifting its priorities from traditional bilateral trade targets to multilateral processes, the U.S. could better foster market liberalization in Japan; third, the U.S. must concentrate on economic issues that enable new ventures to bring value to the Japanese market.

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Task Force Members:

ROGER C. ALTMAN is founder of Evercore Partners, LLC.

MICHAEL H. ARMACOST is president and trustee of The Brookings Institution.

DAVID A. BARTSCH is currently at the General Electric Capital Corporation.

ALAN S. BLINDER is the G.S. Rentschler Memorial professor of economics at Princeton University.

DANIEL E. BOB is special assistant for Asian and Pacific affairs in the office of Senator William V. Roth Jr. (R-Del.).

W. BOWMAN CUTTER is managing director at Warburg Pincus.

JOHN S. GARDNER is vice president for government affairs and policy at ATandT.

SOL HURWITZ is retired president of the Committee for Economic Development.

MERIT JANOW is professor in the practice of international business and director, Program in International Economic Policy, at Columbia University.

RICHARD KATZ is senior editor of The Oriental Economist Report and author of Japan: The System That Soured – The Rise and Fall of the Japanese Economic Miracle.

ROGER M. KUBARYCH is the Henry Kaufman senior fellow, international economics and finance, at the Council on Foreign Relations.

PATRICIA KUWAYAMA is senior research associate at the Center on Japanese Economy and Business at Columbia University's Graduate School of Business and is vice president of the Economics Group at J.P. Morgan.

MICHAEL STUART LEVIN is chief executive officer of e-STEEL.

EDWARD J. LINCOLN is senior fellow at The Brooking Institution's Foreign Policy Program.

EUGENE A. MATTHEWS is president of Nintai Capital, Telluride, Colo.

JANET MULLINS GRISSOM is vice president, Washington affairs, at the Ford Motor Company.

M. DIANA H. NEWTON is project director of the economic Task Force on Japan at the Council on Foreign Relations and research fellow at the Tower Center for Political Studies at Southern Methodist University.

STUART ORAN is senior vice president, international, at United Airlines.

DOUGLAS HAINES PAAL is president and founder of the Asia Pacific Policy Center.

HUGH T. PATRICK is R.D. Calkins professor of international business at Columbia University's Graduate School of Business.

ADAM POSEN is senior fellow at the Institute for International Economics, the author of Restoring Japan's Economic Growth, and the editor of Japan's Financial Crisis and its Parallels with U.S. Experience.

CLYDE PRESTOWITZ JR. is founder and president of the Economic Strategy Institute.

GEORGE SCALISE is president of the Semiconductor Industry Association.

JOAN E. SPERO is president of the Doris Duke Charitable Foundation.

DANIEL K. TARULLO is professor of law at the Georgetown University Law Center.

LAURA D'ANDREA TYSON is BankAmerica dean of the Haas School of Business at the University of California, Berkeley.

EZRA F. VOGEL is Henry Ford II research professor, Harvard University.

MICHEL ZALESKI is a private investor with e-STEEL, Inc. and Harry Winston, Inc.

JOHN A. ZYSMAN is professor of political science and co-director of the Berkeley Roundtable on the International Economy at the University of California, Berkeley.

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