The time is ripe for a bold new initiative to recast the U.S.-Japan economic relationship for the 21st century. A new Japan is emerging. Foreign investment is on the rise. Tokyo is deregulating and restructuring its economy. A new generation of entrepreneurs and venture capitalists has emerged. But a more vibrant, sustainable Japanese economy is threatened by the crushing weight of Japans mounting public debt, the burden of its aging and shrinking population and the cumulative toll of years of economic stagnation. New governments in Washington and Tokyo have a unique opportunity to reinvigorate the U.S.-Japan relationship and to accelerate the pace and redirect the nature of change in the Japanese economy by creating a U.S.-Japan " open marketplace" --free of tariffs, with minimal regulatory impediments and an increasing freedom to do business--by the year 2010. This effort would include harmonization and mutual recognition of domestic regulations, meaningful enforcement of competition policy, deeper restructuring of the Japanese economy, and a dramatic increase in Japanese imports and greater acceptance of foreign investment. In this effort, the United States must assert its economic self-interest through new structural and sectoral trade initiatives and stepped up multilateral market-opening pressure through cases brought to the World Trade Organization. A New Beginning: Recasting the U.S.-Japan Economic Relationship, by Bruce Stokes, is a road map for U.S.-Japan economic relations in the 21st century.
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