Introduction

The U.S.-Japan alliance has been an extraordinary public good for more than half a century. Since the
end of the Cold War, it has provided stability in a potentially volatile region and enabled Japan and its
neighbors to forge the most dynamic regional economy in the world. Today, the alliance remains rooted
in shared values and interests and continues to make the region and the world more secure and
prosperous, with cooperation ranging from countering North Korean missile threats to development
coordination in Africa.

2000+: Stronger alliance in the context of a rising China

By the late 1990s and beyond the US-Japan relationship had been improved and strengthened.
The major cause of friction in the relationship, trade disputes, became less problematic as China
displaced Japan as the greatest perceived economic threat to the U.S. Meanwhile, though in the
immediate post–Cold War period the security alliance suffered from a lack of a defined threat,
the emergence of North Korea as a belligerent rogue state and China's economic and military
expansion provided a purpose to strengthen the relationship. While the foreign policy of the
administration of President George W. Bush put a strain on some of the United States'
international relations, the alliance with Japan has become stronger, as evidenced in the
Deployment of Japanese troops to Iraq and the joint development of anti-missile defense
systems. The notion that Japan is becoming the "Great Britain of the Pacific", or the key and
pivotal ally of the U.S. in the region, is frequently alluded to in international studies,[58] but the
extent to which this is true is still the subject of academic debate.

In 2009, the Democratic Party of Japan came into power with a mandate calling for changes in
the recently agreed security realignment plan and has opened a review into how the accord was
reached, claiming the U.S. dictated the terms of the agreement, but United States Defense
Secretary Robert Gates said that the U.S. Congress was unwilling to pay for any changes.[59][60][61]
Some U.S. officials worried that the government led by the Democratic Party of Japan would
maybe consider a policy shift away from the United States and toward a more independent
foreign policy.[61]

In 2013 China and Russia held joint naval drills in what Chinese state media called an attempt to
challenge the American-Japanese alliance.[62]

On September 19, 2013, Caroline Kennedy sat before the U.S. Senate Foreign Relations
Committee and responded to questions from both Republican and Democrat senators in relation
to her appointment as the US ambassador to Japan. Kennedy, nominated by President Obama in
early 2013, explained that her focus would be military ties, trade, and student exchange if she
was confirmed for the position.[63][64]

Economic relations
Trade volume

The United States has been Japan's largest economic partner, taking 31.5 percent of its exports,
supplying 22.3 percent of its imports, and accounting for 45.9 percent of its direct investment
abroad in 1990.[citation needed] As of 2013, the United States takes up 18% of Japanese exports, and
supplies 8.5% of its imports (the slack having been picked up by China, which now provides
22%).[65]

Japan's imports from the United States included both raw materials and manufactured goods.
United States agricultural products were a leading import in 1990 (US$8.5 billion as measured
by United States export statistics), made up of meat (US$1.5 billion), fish (US$1.8 million),
grains (US$2.4 billion), and soybeans (US$8.8 billion). Imports of manufactured goods were
mainly in the category of machinery and transportation equipment, rather than consumer goods.
[citation needed]
In 1990 Japan imported US$11.1 billion of machinery from the United States, of
which computers and computer parts (US$3.9 billion) formed the largest single component. In
the category of transportation equipment, Japan imported US$3.3 billion of aircraft and parts
(automobiles and parts accounted for only US$1.8 billion).[citation needed]

Japan's exports to the United States were almost entirely manufactured goods.[citation needed]
Automobiles were by far the largest single category, amounting to US$21.5 billion in 1990, or 24
percent of total Japanese exports to the United States.[citation needed] Automotive parts accounted for
another US$10.7 billion. Other major items were office machinery (including computers), which
totaled US$8.6 billion in 1990, telecommunications equipment (US$4.1 billion) and power-
generating machinery (US$451 million).[citation needed]

From the mid-1960s, the trade balance has been in Japan's favor. According to Japanese data, its
surplus with the United States grew from US$380 million in 1970 to nearly US$48 billion in
1988, declining to approximately US$38 billion in 1990.[citation needed] United States data on the
trade relationship (which differ slightly because each nation includes transportation costs on the
import side but not the export side) also show a rapid deterioration of the imbalance in the 1980s,
from a Japanese surplus of US$10 billion in 1980 to one of US$60 billion in 1987, with an
improvement to one of US$37.7 billion in 1990.[citation needed]

Trade frictions

Notable outpourings of United States congressional and media rhetoric critical of Japan
accompanied the disclosure in 1987 that Toshiba had illegally sold sophisticated machinery of
United States origin to the Soviet Union, which reportedly allowed Moscow to make submarines
quiet enough to avoid United States detection, and the United States congressional debate in
1989 over the Japan-United States agreement to develop a new fighter aircraft—the FSX—for
the Japan Air Self-Defense Force.[66][67]

Direct investment
As elsewhere, Japan's direct investment in the United States expanded rapidly and is an
important new dimension in the countries' relationship. The total value of cumulative
investments of this kind was US$8.7 billion in 1980. By 1990 it had grown to US$83.1 billion.
United States data identified Japan as the second largest investor in the United States; it had
about half the value of investments of Britain, but more than those of the Netherlands, Canada,
or West Germany. Much of Japan's investment in the United States in the late 1980s was in the
commercial sector, providing the basis for distribution and sale of Japanese exports to the United
States. Wholesale and retail distribution accounted for 32.2 percent of all Japanese investments
in the United States in 1990, while manufacturing accounted for 20.6 percent. Real estate
became a popular investment during the 1980s, with cumulative investments rising to US$15.2
billion by 1988, or 18.4 percent of total direct investment in the United States.

Energy

The US and Japan find themselves in fundamentally different situations regarding energy and
energy security. Cooperation in energy has moved from conflict (the embargo of Japanese oil
was the trigger that launched the Pearl Harbor attack) to cooperation with two significant
agreements being signed during the 1980s: the Reagan-Nakasone Energy Cooperation
Agreement and the US-Japan Nuclear Cooperation Agreement of 1987 (allowing the Japanese to
reprocess nuclear fuels).[68]

Further cooperation occurred during the 2011 Tōhoku earthquake and tsunami with US troops
aiding the victims of the disaster zone and US scientists from the Nuclear Regulatory
Commission and Department of Energy advising on the response to the nuclear incident at
Fukushima. In 2013 the Department of Energy allowed the export of American natural gas to
Japan.[69]

Military relations

Major US military bases in Japan

US military bases in Okinawa

The 1952 Mutual Security Assistance Pact provided the initial basis for the nation's security
relations with the United States. The pact was replaced in 1960 by the Treaty of Mutual
Cooperation and Security, which declares that both nations will maintain and develop their
capacities to resist armed attack in common and that each recognizes that an armed attack on
either one in territories administered by Japan will be considered dangerous to the safety of the
other. The Agreed Minutes to the treaty specified that the Japanese government must be
consulted prior to major changes in United States force deployment in Japan or to the use of
Japanese bases for combat operations other than in defense of Japan itself. However, Japan was
relieved by its constitutional prohibition of participating in external military operations from any
obligation to defend the United States if it were attacked outside of Japanese territories. In 1990
the Japanese government expressed its intention to continue to rely on the treaty's arrangements
to guarantee national security.[70]

The Agreed Minutes under Article 6 of the 1960 treaty contain a status-of-forces agreement on
the stationing of United States forces in Japan, with specifics on the provision of facilities and
areas for their use and on the administration of Japanese citizens employed in the facilities. Also
covered are the limits of the two countries' jurisdictions over crimes committed in Japan by
United States military personnel.

The Mutual Security Assistance Pact of 1952 initially involved a military aid program that
provided for Japan's acquisition of funds, matériel, and services for the nation's essential defense.
Although Japan no longer received any aid from the United States by the 1960s, the agreement
continued to serve as the basis for purchase and licensing agreements ensuring interoperability of
the two nations' weapons and for the release of classified data to Japan, including both
international intelligence reports and classified technical information.

As of 2014 the United States had 50,000 troops in Japan, the headquarters of the US 7th Fleet
and more than 10,000 Marines. In May 2014 it was revealed the United States was deploying
two unarmed Global Hawk long-distance surveillance drones to Japan with the expectation they
would engage in surveillance missions over China and North Korea.[71]
Ryukyu Islands (Okinawa)

Okinawa is the site of major American military bases that have caused problems, as Japanese and
Okinawans have protested their presence for decades. In secret negotiations that began in 1969
Washington sought unrestricted use of its bases for possible conventional combat operations in
Korea, Taiwan, and South Vietnam, as well as the emergency re-entry and transit rights of
nuclear weapons. However anti-nuclear sentiment was strong in Japan and the government
wanted the U.S. to remove all nuclear weapons from Okinawa. In the end, the United States and
Japan agreed to maintain bases that would allow the continuation of American deterrent
capabilities in East Asia. In 1972 the Ryukyu Islands, including Okinawa, reverted to Japanese
control and the provisions of the 1960 security treaty were extended to cover them. The United
States retained the right to station forces on these islands.[72]

Military relations improved after the mid-1970s.[citation needed] In 1960 the Security Consultative
Committee, with representatives from both countries, was set up under the 1960 security treaty to
discuss and coordinate security matters concerning both nations. In 1976 a subcommittee of that
body prepared the Guidelines for Japan-United States Defense Cooperation that were approved
by the full committee in 1978 and later approved by the National Defense Council and cabinet.
The guidelines authorized unprecedented activities in joint defense planning, response to an
armed attack on Japan, and cooperation on situations in Asia and the Pacific region that could
affect Japan's security.

A dispute that had boiled since 1996 regarding a base with 18,000 U.S. Marines had temporarily
been resolved in late 2013. Agreement had been reached to move the Marine Corps Air Station
Futenma to a less-densely populated area of Okinawa.[73]

For more details on this topic, see Relocation of Marine Corps Air Station Futenma.

National intelligence

Japan's limited intelligence gathering capability and personnel are focused on China and North
Korea, as the nation primarily relies on the American National Security Agency.[74]

MULTILATERAL SECURITY COOPERATION

The final area of alliance cooperation this study briefly examines is multilateral security. The
April 1996 Joint Declaration on Security highlighted cooperation in regional multilateral security
forums as a key theme for the United States and Japan in the next century. In contrast,
multilateral security was portrayed by editorials and news analyses in the Asahi Shimbun
newspaper at the time as an antidote to too much reliance on the U.S.-Japan Security Treaty.
Which is it?
The broader answer, of course, is that multilateral security dialogue in East Asia should not
conflict with the security arrangements between the United States and Japan. In fact, the
revision of the Defense Guidelines led Washington and Tokyo to expand minilateral defense
forums with South Korea and Russia and to provide greater transparency in the ASEAN
Regional Forum (ARF) and track-two regional security forums, such as the Council for Security
Cooperation in Asia Pacific.
Ironically, the need to explain the guidelines strengthened multilateral security dialogue.
Moreover, the level of security cooperation in the ARF is still so basic that there is
little likelihood it will replace any functions of the U.S.-Japan alliance. The ARF has not moved
beyond the baseline of “dialogue” to establish any significant confidence- and security-building
measures, let alone a collective security regime that might replace the stabilizing role played by
the U.S.-Japan alliance. Both Washington and Tokyo are eager to see the dialogue function of
the ARF strengthened, but neither can take the lead without causing suspicion among the
ASEAN states that lie at the core of the ARF. The ARF will move at ASEAN’s pace. It serves a
useful function by enhancing dialogue among Asia Pacific powers. But at most it will
complement rather than replace the U.S.-Japan alliance as the key security institution for
Washington and Tokyo in Asia.