U.S., Japan in marriage of convenience

March 05, 1993|By Norimitsu Onishi | Norimitsu Onishi,Knight-Ridder News Service

For almost a half-century, U.S. policy toward Japan was simple and largely successful: Keep its Far Eastern ally a strong and loyal bulwark against neighboring Communist states.

But ever since the collapse of the Soviet Union made this strategy irrelevant, Washington has come up empty-handed in rethinking its Cold War policy toward Japan -- underscored by the astonishing fact that former Secretary of State James Baker visited Mongolia more often than Japan.

As policy wonks have replaced Cold Warriors in the White House, U.S.-Japanese relations are, more than ever, at a pivotal point.

In "Turning the Tables," Daniel Burstein proposes the establishment of a trans-Pacific community that would marry the United States and Japan, with each nation complementing the other's strengths and weaknesses.

Mr. Burstein, author of "Yen!" and "Euroquake," astutely considers each country's recent economic woes.

While the United States recovers from its Reaganomics-induced hangover and while Japan raises itself from the bursting of its bubble economy, the similarities end there.

Although real estate and stock values plummeted across the Pacific, the Japanese continued to invest in plant and equipment, continued toglobalize and gain market share. At the same time, the United States was disinvesting in manufacturing and infrastructure, dumping money into the military.

Even against the backdrop of an ailing economy, Mr. Burstein writes, the Japanese have succeeded in ensuring their long-term economic health because of a national economic strategy.

It is the same strategy that allowed Japan to change its sources and uses of energy following the oil shocks of the 1970s and to reorganize its entire economy around a strong yen in the mid-1980s.

It is the same economic strategy that led the Bank of Japan to raise the discount rate and puncture the bubble economy.

So, too, does the United States need an economic strategy.

To be sure, Mr. Burstein is not the first to suggest that this country needs to adopt a national economic policy in a post-industrial, global economy.

But he is clear in pointing out how the United States and Japan could help each other.

Japan has invested heavily in the United States, and its innovative technologies have reinvigorated the American steel and auto industries.

On the other hand, U.S. pressure on Japan has loosened some of its markets and illuminated Japan's relatively poor standard of living.

Even more important is the future. The United States leads the world's economy in software, Japan in hardware.

Americans lead in designing products; the Japanese are ahead in the ability to manufacture them.

The United States has the best universities; Japan has the best elementary and secondary schools.

The point is clear: In a global economy, where competition is increasingly fierce and research is increasingly sophisticated and costly, nationalist economies are suicide.

The United States and Japan must form a global partnership.

Barriers are already dropping, Mr. Burstein writes, pointing to the Dodge Stealth made in Japan and the Honda Accord made in Ohio.

However, the U.S. and Japanese governments must provide a (( political structure that will allow both economies to become truly one.

Academics have been trumpeting the idea of a global partnership since the end of the Cold War. But here Mr. Burstein may succeed in popularizing the idea.

BOOK REVIEW

Title: "Turning the Tables: A Machiavellian Strategy for Dealing With Japan."

Author: Daniel Burstein.

Publisher: Simon & Schuster.

Length, price: 272 pages, $22.

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