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

254 • U.S.–JAPAN TRADE CONFLICTS
Super 301 authorized the United States to impose sanctions when negotiations
fail. With the Super 301 in hand, Washington focused on
three sectors to open their markets: supercomputers, satellites, and
wood products; however, Tokyo did not agree to further negotiations.
The U.S. trade deficit with Japan increased rapidly from 1981 to
1987, when it peaked at $52.1 billion. Consequently, not only specific
trade items but also Japanese business practices and administration
became serious issues. Trade friction gradually turned into economic
friction between Tokyo and Washington. Between September
1989 and June 1990, the Japan–U.S. Structural Impediments Initiative
(SII) was held to discuss the domestic structural problems of
both countries in order to resolve the Japan–U.S. trade imbalance.
Because the Super 301 did not cover structural impediments in the
Japanese market, these were discussed separately at the SII.
The U.S. trade deficit began declining in 1988, but it rose again in the
1991 to 1994 period. In July 1993, succeeding the SII, the U.S.–Japan
Framework Talks for a New Economic Partnership on bilateral
trade were started to discuss not only each trade item but also a wide
range of subjects, such as macroeconomic problems, development of
human resources, and environment issues. In the sectoral consultation,
Tokyo and Washington decided to focus on three sectors: government
procurement, insurance, and automobile parts. Washington strongly demanded
the setting up numerical targets, while Tokyo consistently opposed
this because it would ruin the free-trade principle. Finally, in October
1994, a consensus was reached in principle on government
procurement and insurance. In June 1995, the two countries concluded
another agreement on automobile parts without numerical targets.
U.S. trade deficit with Japan dropped in the mid-1990s, which eased
trade friction between the two countries. In the late 1990s, the American
economy continued in prosperity while Japan suffered from a long-term
economic slump. Moreover, the World Trade Organization (WTO) tended
to deal with trade-related conflicts, but there was no significant trade friction
between Tokyo and Washington. In June 2001, President George
Bush and Prime Minister Junichiro Koizumi agreed to start the
Japan–U.S. Economic Partnership for Growth, which aims to promote
sustainable growth in the United States, Japan, and the world
through their close dialogue and cooperation. See also FOREIGN EX-
CHANGE ALLOCATION SYSTEM; FOREIGN EXCHANGE SPE-