Historical Dictionary of United States-Japan ... - Bakumatsu Films

140 • JAPAN–U.S. WISE PERSONS COMMITTEE
JAPAN–U.S. WISE PERSONS COMMITTEE (JUSWPC). The
Japan–U.S. Wise Persons Committee was a forum in which Japanese
and U.S. civilians discussed the economic relationship between
Japan and the U.S. The committee was established at the Japan–U.S.
summit held on 30 April 1979 in order to minimize trade friction between
the two countries. The JUSWPC consisted of four members
from each country. After submitting its final report, the JUSWPC dissolved
itself in September 1981. The final report proposed the following
five points: holding a regular ministerial-level conference;
encouragement of Japanese private corporations’ investments in the
United States; convocation of a national productivity conference in
the United States; establishment of an ombudsman in Japan; and liberalization
of the Japanese agricultural market. See also U.S.–JAPAN
TRADE CONFLICTS.
JAPAN–WEST GERMANY–U.S. LOCOMOTIVE THEORY. The
Japan–West Germany–U.S. Locomotive Theory was presented by the
United States at the London and Bonn Summits in 1977 and 1978, respectively,
and urged that not only the United States but also Japan
and West Germany should provide leadership in the global world
economy by cultivating their domestic markets.
In the 1970s, the United States suffered a current account deficit and
inflation, mainly because of spending on the Vietnam War. Consequently,
the United States demanded that Japan and West Germany
should play more important roles in the world economy. With respect to
Japan, the U.S. believed that given the large size of its domestic market,
it should assume part of the burden of maintaining a liberal international
trading system and promote global trade by expanding its imports, even
at the risk of damaging some Japanese industries. Japanese Prime Minister
Takeo Fukuda took this idea seriously and publicly pledged to encourage
domestic demand-led economic growth of 7 percent. As a result,
in 1978 Japan’s central government spending on public works
dramatically increased 34.5 percent and government-bond issuance rose
38.8 percent compared with previous year levels. In addition, when serious
trade friction developed between the United States and Japan in
1981, Japan took the initiative of voluntarily restricting its exports of automobiles
to the United States by capping the export level at 1.68 million
vehicles. See also U.S.–JAPAN TRADE CONFLICTS.