THE AMERICAN ENTERPRISE IN­ EXECUTIVE STITUTE FOR PUBLIC POLICY RE­ COMMITTEE SEARCH, established in 1943, is a publicly supported, nonpartisan re­ Herman J. Schmidt Chairman of the Board search and educational organization. Its purpose is to assist policy makers, William J. Baroody scholars, businessmen, the press and President the public by providing objective William G. McClintock analysis of national and international Treasurer issues. Views expressed in the insti­ tute's publications are those of the Richard Farrell authors and do not necessarily reflect Dean Fite the views of the staff, advisory panels, officers or trustees of AEI. SENIOR STAFF ADVISORY BOARD Anne Brunsdale Paul W. McCracken, Chairman, Ed­ Director of Publications mund Ezra Day University Professor of Business Administration, Univer­ Joseph G. Butts sity of Michigan Director of Legislative Analysis R. H. Coase, Professor of Economics, University of Chicago Robert B. Helms Director of Health Policy Milton Friedman, Paul S. Russell Dis­ Studies tinguished Service Professor of Eco­ nomics, University of Chicago Thomas F. Johnson Director of Research Gottfried Haberler, Resident Scholar, American Enterprise Institute for Gary L. Jones Public Policy Research Assistant to the President for Administation C. Lowell Harriss, Professor of Eco­ nomics, Columbia University Richard M. Lee Director of Planning George Lenczowski, Pofessor of Po­ and Development litical Science, University of Califor­ nia, Berkeley Edward J. Mitchell Director, National Robert A. Nisbet, Professor of Sociol­ Energy Project ogy and History, University of Ari­ zona W. S. Moore Director of Legal Policy James A. Robinson, President, Uni­ Studies versity of West Florida Robert J. Pranger Director of Foreign and Defense Policy Studies JftP�ESE­ RICAN RElATIONS � Donald C. Hellmann. Moderator � Hubert H. Humphrey Ted Stevens Robert S. Ingersol I Philip Caldwell An AEI Round Table held on 17 December 1974 at the American Enterprise Institute for Public Policy Research Washington, D.C. THIS PAMPHLET CONTAINS THE PROCEEDINGS OF ONE OF A SERIES OF AEI ROUND TABLE DISCUSSIONS. THE ROUND TABLE OFFERS A MEDIUM FOR INFORMAL EXCHANGES OF IDEAS ON CURRENT POLICY PROBLEMS OF NATIONAL AND INTERNATIONAL IMPORT. AS PART OF AEI'S PROGRAM OF PROVIDING OPPORTUNITIES FOR THE PRESENTATION OF COMPETING VIEWS, IT SERVES TO ENHANCE THE PROSPECT THAT DECISIONS WITHIN OUR DEMOCRACY WILL BE BASED ON A MORE INFORMED PUBLIC OPINION. AEI ROUND TABLES ARE ALSO AVAILABLE ON AUDIO AND COLOR VIDEO CASSETTES. @ 1976 BY AMERICAN ENTERPRISE INSTITUTE FOR PUBLIC POLICY RESEARCH, WASHINGTON, D.C. PERMISSION TO QUOTE FROM OR REPRODUCE MATERIALS IN THIS PUBLICATION IS GRANTED WHEN DUE ACKNOWLEDGMENT IS MADE. ISBN 0-8447-2064-X LIBRARY OF CONGRESS CATALOG CARD NO. L.C. 76-13963 PRINTED IN UNITED STATES OF AMERICA ONALD C. HELLMANN, professor of political sci­ ence and Asian studies, University of Washington at Seattle, and Round Table moderator: The sub­ jectD of this American Enterprise Institute Round Table is the future of Japanese-American relations. Until recent years this subject was buried in the news of more exciting events in Asia and was seen as a model of American relations with another friendly industrial power. More recently the problems that have developed between our countries have taken on new importance for both nations·. The recent visit of President Ford to Japan, the first of any American president to that country, underlies this importance. We have, up to now, been able to iron out the minor frictions that have afflicted our relations, but the problems underJying the security, the economic and the political relations between the two countries remain and are in­ tegrally related to America's and Japan's position in a changing international situation. The United States is a global power and it is a Pacific power. The meaning for the United States of being a Pacific power depends to a very great extent on our relations with Japan. The participants in this Round Table will address themselves to this subject, raising issues not only about the contemporary problems as they emerge almost daily, but also about the fundamental and underlying issues be­ tween the two nations. Because the problem of Japanese­ American relations is more properly seen in its global perspective, the lead-off speaker will be Deputy Secretary 1 of State Ingersoll who has spent time in Tokyo as our ambassador. ROBERT S. INGERSOLL, U.S. Department of State: I think to look at the future we first have to look at the past and see what our relationship has been with Japan since World War II, starting with the occupation, when we literally ran the government of Japan, to the period follow­ ing the occupation, when the United States set the pattern of foreign policy and security policy for Japan. Japan, some people said, kept its head down and worked very diligently on its economy. During that period Japan pretty much relied upon the United States to establish foreign-policy relationships throughout the world. It was a sort of "Big Brother-Little Brother" relationship. Then came the shock of the announcement of Presi­ dent Nixon's visit to Peking in February 1972, then the economic shock a month later, then the textile shock in October, and finally the vote in the United Nations for the People's Republic of China to displace Nationalist China. All of these shocks tended to shake Japan's position of following the United States in foreign policy, and since that time Japan has been developing its own. It might be in parallel with the United States, but certainly it is in the long run for the benefit of Japan and, I think, also for the United States. I believe that the future relationship between the two countries will be a much more mature one. The bilateral problems that beset us, some of those that I have men­ tioned in 1971 and the following trade imbalances of 1972 and 1973, have largely passed by. Now we look at the relationship more in a multilateral situation where we both are working very diligently to have freer world trade through the negotiations in GATT, and to develop a greater multilateral relationship in the energy field. I think this shows the maturity of our relationship and also shows that Japan has grown up in its foreign policy and in its association with the United States. I think it shows that there is now a proper basis for the association 2 between our two countries and we can continue developing a multilateral relationship that is more mature. PROFESSOR HELLMANN: Thank you very much, Secre­ tary Ingersoll. Our next speaker will be Senator Stevens. TED STEVENS, U.S. Senate (R.-Alaska): Alaskans have had a continuing relationship with Japan. Over the years Japan has come to our state and has developed resources. I am told that the largest single Japanese investment in the United States in the manufacturing area is our Alaska Lumber and Pulp Company in Sitka. The Japanese have rapidly moved to expand their investment in our natural resources. As a matter of fact the things that Japan seems to need most in the area of natural resources are found in abundance in our state­ timber, copper, coal, petroleum, uranium, aluminum. I believe that the sources they had for these materials were a lot less stable than ours, and for that reason they seem to be moving very aggressively. I would say that some 50 percent of our timber indus­ try in Alaska is owned by Japanese interests, and close to 80 to 90 percent of the total production of Alaska's forests go to Japan either through direct ownership or through long-term sales. They fairly well control our timber indus­ try today, I would say. There has also been a vast increase in Japanese on­ shore investment in fisheries, amounting to some half-a­ billion dollars. And we find that our trade with Japan is continually increasing, and I think this will be expanded even more in the future. But frankly, we are quite worried about our relation­ ship with Japan. We find that their policies at home do not reflect the antitrust concept that we recognize in this country. I think that their industries abroad, such as in our state, reflect their tradition rather than ours. Also, we have had extensive conflicts with their fleets off our shores. The Congress recently passed-at least the Senate has passed-the 200-mile-limit bill to extend our jurisdiction in order to impose conservation practices. Half 3 of the coastline in the United States is Alaskan, and I think that bill is primarily aimed at the Alaska problem. But the Japanese continue to be the world's greatest exploiters of salmon on the high seas. These irritants are probably the things that cause more tension in the continued good relationships that we have had with Japan. I think Alaskans and the people of the Northwest are particularly aware of these problems and want to see the development of a more meaningful reciprocal relationship in trade. For that reason I hope we can get into a discussion of some of the internal policies of Japan that have been an impediment to the development of a reciprocal investment policy. I believe we have a long, meaningful relationship ahead of us. But there are some very tough problems to solve if this is to be a reciprocal and mutually beneficial relationship. PROFESSOR HELLMANN: Thank you very much, Sena­ tor. Senator Humphrey? HUBERT H. HUMPHREY, U.S. Senate (D.-Minn.): Well, I find myself very much in agreement with what has been outlined here. There i·s an advantage in being the third participant because much has already been said and you can go through the routine of saying I agree.