Order Code RL33436
CRS Report for Congress
Received through the CRS Web
Japan-U.S. Relations:
Issues for Congress
Updated August 7, 2006
Emma Chanlett-Avery (Coordinator)
Analyst in Asian Affairs
Foreign Affairs, Defense, and Trade Division
Mark E. Manyin
Specialist in Asian Affairs
Foreign Affairs, Defense, and Trade Division
William H. Cooper
Specialist in International Trade and Finance
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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Japan-U.S. Relations: Issues for Congress
Summary
The post-World War II U.S.-Japan alliance has long been an anchor of the U.S.
security role in East Asia. The alliance, with its access to bases in Japan, where
about 53,000 U.S. troops are stationed, facilitates the forward deployment of U.S.
military forces in the Asia-Pacific, thereby undergirding U.S. national security
strategy. For Japan, the alliance and the U.S. nuclear umbrella provide maneuvering
room in dealing with its neighbors, particularly China and North Korea.
The Bush Administration has made significant strides in its goals of broadening
U.S.-Japan strategic cooperation and encouraging Japan to assume a more active
international role. Following the September 11, 2001 terrorist attacks, Japan made
its first-ever military deployments in noncombat support of U.S. and allied forces in
Afghanistan. Koizumi was a prominent backer of the U.S. invasion of Iraq and in
2004 Tokyo sent noncombat troops to Iraq, despite considerable domestic opposition.
Japan generally has supported the “hardline” U.S. position in the Six-Party Talks on
North Korea’s nuclear program. Japan is participating in bilateral missile defense
research and development. In 2005 the U.S. and Japan announced a sweeping new
agreement to strengthen military cooperation. The plan calls for U.S. forces to be
realigned and Japan to take on a more active (non-combat) role in maintaining
regional and global security. The envisioned changes are intended to complement the
broader Pentagon goal of deploying a more streamlined and mobile force in Asia.
Most of these developments have been viewed warily by South Korea and
opposed outright by China. Beijing and Seoul also have expressed concern at the
assertive foreign policy stance adopted by Koizumi, who has been buoyed by
heightened senses of nationalism and vulnerability (to North Korea and China)
among many Japanese. Koizumi’s party also has drafted a new constitution that
would eliminate most of the clauses prohibiting participation in collective security
arrangements. The United States has supported both moves. Sino-Japanese and
Korean-Japanese tensions also have risen due to competing territorial claims and
accusations that Japan is attempting to whitewash its history of aggression during the
first half of the 20th Century. Koizumi’s repeated visits to the controversial Yasukuni
Shrine have further fueled China’s and South Korea’s resentment.
Japan is one of the United States’ most important economic partners. Outside
of North America, it is the United States’ largest export market and second-largest
source of imports. Japanese firms are the U.S.’ second-largest source of foreign
direct investment, and Japanese investors are by far the largest foreign holders of
U.S. treasuries, helping to finance the U.S. deficit and reduce upward pressure on
U.S. interest rates. Bilateral trade friction has decreased in recent years, partly
because U.S. concern about the trade deficit with Japan has been replaced by concern
about a much larger deficit with China. The exception was U.S. criticism over
Japan’s decision in 2003 to ban imports of U.S. beef.
This report replaces CRS Issue Brief IB97004, Japan-U.S. Relations: Issues for
Congress, coordinated by Emma Chanlett-Avery.

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Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Bush-Koizumi Summit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
North Korean Missile Launches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Beef Ban Lifted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Troops Withdrawn from Iraq . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Role of Congress in U.S.-Japan Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Major Diplomatic and Security Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Global Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Counterterrorism Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Support for U.S. Policy Toward Iraq . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
United Nations Security Council Reform . . . . . . . . . . . . . . . . . . . . . . . 4
Kyoto Protocol and Climate Change . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Regional and Historical Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Converging Korean Peninsula Priorities . . . . . . . . . . . . . . . . . . . . . . . . 5
Japan-China Rivalry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Territorial Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Historical Issues Divide Asian Powers . . . . . . . . . . . . . . . . . . . . . . . . . 6
Claims of Former World War II POWs and Civilian Internees . . . . . . . 7
Military Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Deepening Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Article 9 Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Proposed Command Structure Changes . . . . . . . . . . . . . . . . . . . . . . . . . 9
U.S. Bases on Okinawa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Burden-Sharing Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Cooperation on Missile Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Economic Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Japan’s Ban on U.S. Beef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
The Byrd Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
The Doha Development Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Japanese Political Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Koizumi’s Sweeping Victory in September 2005 Elections . . . . . . . . 15
Koizumi’s Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
The Democratic Party of Japan (DPJ) . . . . . . . . . . . . . . . . . . . . . . . . . 17
Constitutional Revision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Conclusion — Japan’s Increased Assertiveness . . . . . . . . . . . . . . . . . . . . . . . . . 18
Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
List of Figures
Figure 1. Map of Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

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Figure 2. Map of Military Facilities in Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
List of Tables
Table 1. U.S. Trade with Japan, Selected Years . . . . . . . . . . . . . . . . . . . . . . . . . 12

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Japan-U.S. Relations:
Issues for Congress
Most Recent Developments
Bush-Koizumi Summit. On June 29, 2006, Prime Minister Junichiro
Koizumi and President Bush held a bilateral summit at the White House. The two
leaders released a joint statement entitled “The Japan-U.S. Alliance of the New
Century,” which reaffirms the bilateral alliance and sets forth their common values
and interests. The statement reflects the trend of the relationship over the past few
years in that it focuses not only on bilateral issues but also on regional and global
cooperation. Following the official visit in Washington, Bush and Koizumi traveled
to Memphis, Tennessee, to tour the home of Elvis Presley, Koizumi’s favorite singer.
The visit was seen as a farewell to Koizumi, one of Bush’s most stalwart allies.
Koizumi is scheduled to step down in September 2006.
North Korean Missile Launches. North Korea’s test-firing of several
missiles on July 5 (July 4 in the United States) rattled Japan and stimulated unusually
aggressive diplomacy by Japan’s government. Japan responded quickly and
forcefully by announcing unilateral financial penalties on the regime and drafting a
UNSC resolution that would impose sanctions and threaten military action if North
Korea did not end its ballistic missile program. Chief Cabinet Secretary Shinzo Abe,
frontrunner in the Prime Ministerial race, inflamed the South Korean government by
suggesting that Japan should consider the legality of launching pre-emptive strikes
on North Korea’s missiles if future threats arise. Ongoing U.S.-Japanese cooperation
on missile defense accelerated as a result of the tests: the Pentagon announced that
it would begin relocating the Patriot Advanced Capability-3 system (known as the
PAC-3) from Texas to Okinawa in August.
Beef Ban Lifted. On July 27, Japan announced it would resume imports from
the United States of beef from cattle 20 months old or younger. While praising the
decision, some Members of Congress and other officials have called on Japan to
broaden the procedures to include beef from older cattle.
Troops Withdrawn from Iraq. On June 20, Koizumi announced that Japan’s
ground troops would withdraw from Iraq; the withdrawal was completed less than
a month later. Japan’s Air Self Defense Forces, however, have expanded their
mission of airlifting multinational troops and supplies from Kuwait into Iraq. Japan
also announced a $30 million loan for Iraq’s infrastructure, in addition to the earlier
pledge of $5 billion and the forgiveness of 80% of the debts owed it by Baghdad, or
$6.9 billion.

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CRS-2
Figure 1. Map of Japan
The Role of Congress in U.S.-Japan Relations
Congressional powers, actions, and oversight form a backdrop against which
both the Administration and the Japanese government must formulate their policies.
In 2005, Congress showed a renewed interest in U.S.-Japan relations. After holding
two Japan-specific public hearings from 2001 through 2004, Congress held three in
2005. In 2004 and 2005, Members of Congress were particularly critical of Japan’s
two-year ban on imports of U.S. beef and of the Bush Administration’s handling of
the beef dispute. On security issues, Members have expressed concern that steps
taken by the Japanese government are harming U.S. interests in East Asia by
worsening Sino-Japanese and South Korean-Japanese relations. Prime Minister

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CRS-3
Junichiro Koizumi’s continued visits to Yasukuni Shrine, which enshrines the names
of several Class A war criminals from World War II, has come under particular
criticism. Relatedly, some Members have called attention to signs that revisionist
views of World War II and the U.S. Occupation of Japan (1945-52) increasingly are
seeping into the mainstream in Japan. The Bush Administration’s reaction to and
role in fostering these developments also have begun to come under greater
congressional scrutiny. Congressional attention also has focused on Japan’s
increased diplomatic and military assertiveness, as well as dramatic political
developments in Japan in 2005 and 2006. (See also the “Legislation” section.)
Major Diplomatic and Security Issues1
The dominant theme in U.S.-Japan
Japan Country Data
relations for the past five years has been
deepened alliance cooperation across a range
Population: 127.4 million (July 2005 est.)
of issues since the September 11, 2001,
% of Population over 64: 19.5% (U.S. =
terrorist attacks. Prior to traveling to Asia in
12.4%) (2005)
November 2005, President Bush described
Area: 377,835 sq km (slightly smaller
than California)
Prime Minister Junichiro Koizumi as “one of
Life Expectancy: 81.15 years (2005)
the best friends that I have in the
Per Capita GDP: $29,400 (2004 est.)
international arena.” During the one-day
purchasing power parity
summit between the two leaders in Kyoto in
Primary Export Partners: US 22.7%,
November 2005, Prime Minister Koizumi
China 13.1%, South Korea 7.8%,
Taiwan 7.4% (2004)
said that the closer U.S.-Japan relations are,
Primary Import Partners: China 20.7%,
the “easier for us [Japan] to behave and
US 14%, South Korea 4.9%,
establish better relations with China, with
Australia 4.3% (2004)
South Korea and other nations in Asia.”
Yen:Dollar Exchange Rate: 117.3
(2005), 108.3 (2004), 115.93
(2003), 125.39 (2002)
Global Issues
Foreign Exchange Reserves: $828.8
billion (2005)
Counterterrorism Cooperation.
Following the terrorist attacks of September
Source: CIA World Factbook, July 2005,
IMF, US Treasury Department
11, 2001, the Koizumi government initiated
a series of unprecedented measures to
protect American facilities in Japan and provide non-lethal, “rear area” logistical
support to U.S. military operations against Al Qaeda and the Taliban in Afghanistan.
The latter mainly took the form of at-sea replenishment of fuel oil and water to U.S.,
British, French, and other allied warships operating in the Indian Ocean. The
dispatch of Japan’s Maritime Self-Defense Forces (MSDF) was the first such
deployment since World War II. From late 2001 through March 2005, a small flotilla
of Japanese transport ships, oilers, and destroyers provided about 30% of the fuel
used by U.S. and allied warships, and Japan’s Air Self-Defense Force (ASDF)
conducted hundreds of airlift support missions for U.S. forces. On June 10, 2005, the
Japanese government decided to extend its anti-terrorism law for two years. Japan
also has been the third-largest donor country for Afghan relief and reconstruction.
1 This section was written by Emma Chanlett-Avery.

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CRS-4
Support for U.S. Policy Toward Iraq. While strongly preferring a clear
United Nations role in resolving the U.S./British confrontation with Iraq, Japan
nonetheless gave almost unqualified support to the Bush Administration’s position.
During an open debate in the U.N. Security Council, Japan was one of only two out
of 27 participating countries (the other being Australia) to support the U.S.
contention that even if the U.N. inspections were strengthened and expanded, they
were unlikely to lead to the elimination of Iraq’s weapons of mass destruction. Since
2003, Japan has provided $1.5 billion in grant assistance to Iraq, has pledged to
provide $3.5 billion in yen loans, and has agreed to a phased cancellation of 80% of
the approximately $7.5 billion in debt Iraq owed Japan. In addition, in January 2004,
the Koizumi government deployed about 600 military personnel — mainly ground
troops — to carry out humanitarian aid and reconstruction activities in Iraq. The
ground troops were withdrawn from the southern area of Samawah in June-July
2006, but the air division of the Self Defense Forces (the official name of Japan’s
military) has expanded its mission of airlifting multinational troops and their supplies
from Kuwait into Iraq.
United Nations Security Council Reform. In 2004, Japan accelerated its
longstanding efforts to become a permanent member of the United Nations Security
Council by forming a coalition with Germany, India, and Brazil (the so-called “G-4”)
to achieve non-veto membership for all four countries. Though the Bush
Administration has backed Japan’s bid,2 it did not support the G-4 proposal and
opposed taking a vote on expanding the Security Council until a “broader consensus”
on reforming the entire organization can be reached. After the G-4 bid failed in the
run-up to the U.N.’s Millennium Summit in September 2005, Prime Minister
Koizumi reportedly told Secretary General Kofi Annan that in the future Japan would
have to coordinate more closely with the United States to achieve its goal. To
become a new member, Japan needs to obtain support from two-thirds (128
countries) of all the U.N. member countries. Japan is the second-largest contributor
to the U.N. regular budget, paying more than 20% of the total, more than twice the
percentage paid by the third-largest contributor. After investigations revealed that
mismanagement had allowed millions of dollars to be lost to corruption in the oil-for-
food program for Iraq, Japan threatened to withhold part of its funding if drastic
reforms were not adopted.
Kyoto Protocol and Climate Change. Japan is the fourth-leading producer
of so-called greenhouse gases after the United States, the Russian Federation, and
China. Under the Kyoto Protocol, which Tokyo ratified in 2002, Japan is obligated
to reduce its emissions to 6% below its 1990 levels by 2010. Japanese industry
shares many of the concerns of U.S. industry about the cost and feasibility of
achieving these reductions, but the Japanese government, which places a high value
on its support of the protocol, has expressed dismay over the Bush Administration’s
decision to back away from the protocol. In 2005, Japan joined with the United
States, China, India, South Korea, and Australia in a new, non-binding, agreement.
The Asia-Pacific Partnership on Clean Development and Climate calls on the six
2 China and South Korea have criticized the Bush Administration for its support for Japan’s
bid for permanent U.N. Security Council membership.

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CRS-5
nations to cooperate on the development and diffusion of technology to combat
climate change, reduce pollution, and promote energy security. The group is
designed to “complement, but not replace, the Kyoto Protocol.” Some
environmentalists have criticized the arrangement for its absence of mandates —
particularly on greenhouse gas emissions — and for being a part of a suspected U.S.
strategy to prevent the Kyoto Protocol from being renewed after it expires in 2012.
Regional and Historical Issues
Converging Korean Peninsula Priorities. Japan’s policy toward North
Korea has hardened in recent years, drawing it closer to the U.S. position in the
ongoing Six-Party Talks on Pyongyang’s nuclear weapons program. Japan has
insisted on North Korea abandoning its nuclear weapons, promising substantial aid
in return; has taken steps to squeeze North Korea economically; and participates in
the U.S.-led Proliferation Security Initiative (PSI). Several prominent Japanese have
called for Tokyo to impose sanctions against North Korea, a step opposed by
Koizumi and the Bush Administration. The issue of Japanese citizens kidnapped in
the 1970s and 1980s by North Korean agents has largely driven Tokyo’s harder
position. The Bush Administration and Congress have supported Japan’s insistence
on a full accounting of the fate of those abducted, and have included the abductions
as part of the justification for keeping North Korea on the state sponsors of terrorism
list. The North Korean Human Rights Act (P.L. 108-333), passed by the 108th
Congress and signed by President Bush in October 2004, requires that U.S.
nonhumanitarian assistance to North Korea depend on “substantial progress” toward
fully disclosing information on the abductees.
At the same time, Japan has reportedly encouraged the United States to adopt
a more flexible position; after a Koizumi-Bush meeting at the June 2004 G-8
Summit, the Bush Administration submitted its first and only detailed negotiating
position at the Six-Party Talks. Outside the framework of the Talks, Koizumi has
pursued an independent channel of diplomacy with North Korea, holding summits
with North Korean leader Kim Jong-il in September 2002 and May 2004. Koizumi
has made the normalization of relations contingent upon the settlement of the nuclear
and abduction issues. Progress on this goal appears unlikely before Koizumi leaves
office in September 2006.
Japan-China Rivalry. Despite extensive economic ties, relations between
China and Japan, always uneasy, have become increasingly strained. Political
tensions are high over a variety of sovereignty-related issues, and many observers see
a potentially destabilizing spike in nationalist animosity toward Japan among
Chinese. In April 2005, large-scale anti-Japanese demonstrations broke out in at least
nine Chinese cities, including a violent protest in Shanghai that damaged the
Japanese consulate as well as shops that cater to the large Japanese expatriate
community. The demonstrations protested Koizumi’s visits to Yasukuni Shrine,
Japanese history textbooks, and Japan’s bid to become a permanent member of the
United Nations Security Council (UNSC). Many observers noted that the Chinese
authorities were unusually passive in allowing the protesters to organize, fueling
speculation that Beijing quietly encouraged the demonstrations. Following
Caesium’s October visit to Yasukuni, however, Chinese media reported the events
in measured tones, fueling suspicion that Beijing issued a directive to quell

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CRS-6
anti-Japanese sentiment. Analysts note that leaders in Beijing appear to exploit the
emotional issue of Japanese history: in order to solidify their own hold on power,
they attempt to redirect frustration with the central government, but are also
concerned that large-scale demonstrations will develop into anti-government protests.
Observers noted a limited thaw in the bilateral relationship in 2006, as the
foreign ministers of both countries met for the first time in over a year. Japan lifted
the earlier freeze on foreign aid to China and approved a new loan package of 74
billion yen (about $630 million). Chinese President Hu Jintao, meeting with a
high-level Japanese delegation in March, proposed explicitly that heads of
government summits could resume if Japanese leaders stopped visiting Yasukuni
Shrine. Japan subsequently rejected that formulation, and speculation continues that
Prime Minister Caesium may visit the controversial shrine on August 15, the
anniversary of Japan’s surrender in World War II. Hu also met with Ichiro Ozawa,
leader of the opposition Democratic Party of Japan (DPJ) in July 2006; analysts say
this both showed the importance that China assigns to the bilateral relationship and
reprimanded the ruling party for its stance on history issues.
Territorial Conflicts. Beijing and Tokyo have faced a series of
confrontations over the territorial rights of areas in the East China Sea, which is
potentially rich in oil and gas reserves. Japan considers the area surrounding the
Senkaku/Diaoyu islands to be part of its Exclusive Economic Zone (EEZ). The
Japanese Self Defense Force has detected periodic Chinese military activities in the
area, including a submarine incursion in 2004 close to Okinawa and a fleet of
warships near a disputed gas field. Talks to resolve the issue have been held, but no
resolution appears to be imminent.
Historical Issues Divide Asian Powers. Historical grievances,
particularly those centered around Japan’s behavior during and preceding World War
II, continue to aggravate Japan’s relationships with its neighbors. The most
consistently divisive issue involves the visits of Japanese politicians to the Yasukuni
Shrine, a Shinto shrine that honors Japanese soldiers who died in war. Those
enshrined include several Class A war criminals who were convicted by the
International Military Tribunal for the Far East following Japan’s defeat in World
War II. Chinese leaders have emphasized repeatedly that Prime Minister Koizumi’s
Yasukuni visits constitute a stumbling block in moving political relations forward.
Koizumi’s fifth annual visit to Yasukuni, in October 2005, again drew angry protests
from Asian leaders: both Beijing and Seoul cancelled upcoming bilateral meetings
with the Japanese, but no widespread demonstrations occurred in China. In a sign
that the debate over Yasukuni is intensifying among the Japanese elite, two of
Japan’s most influential newspapers, the Yomiuri Shimbun and the Asahi Shimbun,
called for the establishment of a non-political alternative shrine that excludes the
Class A war criminals.

In a related vein, Japan has come under fire for some of its history textbooks for
school children. China insists that the texts misrepresent Japan’s past by
downplaying the atrocities committed by Japanese soldiers against civilian
populations. South Korea also has complained about Japanese history textbooks, the
Yasukuni visits, and a perceived failure by the Japanese government to compensate
adequately Korean “comfort women,” who were recruited to provide sexual services

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CRS-7
for Japanese troops during World War II. Although the Japan-South Korean disputes
generally are regarded as more manageable than Sino-Japan tensions, the
disagreements over history are a major obstacle to improved Japan-South Korean
ties, often referred to as the “weak link” in the U.S. triangle of alliances in Northeast
Asia.
Furthermore, the question of Japan’s historical legacy also has affected Korean
and Chinese views of the United States. Both countries have criticized the Bush
Administration for its silence regarding the controversy over the Yasukuni shrine
and Japan’s record in accounting for its past history of aggression. In November
2005, President Bush discussed rising regional tensions during his bilateral summits
with Caesium and the leaders of China and South Korea. During a trip to Japan and
China in January 2006, Deputy Secretary of State Robert Zoellick suggested that
Chinese, Japan, and U.S. historians engage in “track two” efforts to examine the
history of World War II.
In a related move, in July 2005 the U.S. House of Representatives passed
H.Con.Res. 191, which commemorated the 60th anniversary of the end of the Pacific
War. The resolution stated that Congress reaffirmed the judgments rendered by the
international war crimes tribunal in Tokyo after World War II, including the
conviction of Japanese leaders for “crimes against humanity.”
Claims of Former World War II POWs and Civilian Internees.
Congress has indicated interest in another issue in which the U.S. and Japanese
governments have been in essential agreement. A number of surviving American
World War II Prisoners of War (POWs) and civilian internees who were forced to
work for Japanese companies — including Mitsui, Nippon Steel, and Mitsubishi —
during the war have filed suits in Japan and California seeking compensation of
$20,000 for each POW or internee for forced labor and torture. Former POWs and
civilian internees were paid about $1.00-2.50 for each day of internment from a fund
of seized Japanese assets administered by a War Claims Commission (WCC)
established by Congress in 1948. Thus far, the Japanese courts and the U.S. Court
of Claims have dismissed the suits on grounds that Japan’s obligations to pay
compensation were eliminated by Article 14 of the 1951 Multilateral Peace Treaty
with Japan. The Departments of State and Justice support the position of the
Japanese government, but some Members of Congress have sided with the plaintiffs.
The core issue is whether the Peace Treaty with Japan relieved only the Japanese
government from future claims or whether it covered private companies as well. A
number of bills and amendments introduced in the last several Congresses have
sought to block the executive branch from upholding the supremacy of the Peace
Treaty in civil suits. None have been enacted, in part due to opposition from the
Bush Administration.3 (See “Legislation” section.)
3 See CRS Report RL30606, U.S. Prisoners of War and Civilian American Citizens
Captured and Interned by Japan in World War II, archived but available by request from
the coordinator.

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CRS-8
Military Issues4
Deepening Cooperation. Japan and the United States are military allies
under a security treaty concluded in 1951 and revised in 1960. Under the treaty,
Japan grants the United States military base rights on its territory in return for a U.S.
pledge to protect Japan’s security. In October 2005, at a Security Consultative
Committee meeting (SCC, also known as the 2+2 meeting) of the Japanese and U.S.
foreign and defense ministers, the two sides released an interim report,
Transformation and Realignment for the Future, announcing several significant steps
that will expand the alliance beyond its existing framework. A follow-up
implementation plan, announced in May 2006, lays out the final agreement, including
the key provision that Japan will bear over $6 billion of the estimated $10.2 billion
cost for relocating 8,000 Marines from Okinawa to a facility in Guam by 2014. U.S.
officials say Japan will pay an estimated $26 billion overall for the realignment
initiative. Some military officials in Japan are concerned that the high cost of the
realignment could result in decreased capabilities because of budgetary restraints.
As U.S. personnel and facilities in Japan are realigned as part of the broader
Pentagon strategy of deploying a more streamlined and mobile force, Japan is to take
a more active role in contributing to global stability, primarily through increased
coordination with the U.S. military. Key features of the new arrangement include a
reduction in the number of U.S. Marines in Japan, the relocation of a problematic air
base in Okinawa, the deployment of an X-Band radar system in Japan as part of a
missile defense system, expanded bilateral cooperation in training and intelligence
sharing, and Japan’s acceptance of a nuclear-powered aircraft carrier in the Yokosuka
Naval Base. Many of the agreement’s most controversial elements are likely to face
continued obstacles, particularly from local Japanese politicians in the areas
identified to host new facilities and troops. In March 2006, 89% of voters in
Yamaguchi prefecture voted against expanding the Iwakuni base to accommodate
more U.S. troops in a non-binding referendum, and scheduled talks on the
realignment were postponed.
The most recent overhaul builds upon the 1997 revised defense cooperation
guidelines that grant the U.S. military greater use of Japanese installations in time of
crisis and refer to a possible, limited Japanese military role in “situations in areas
surrounding Japan.” At the “2 + 2” meeting in February 2005, Secretaries Rice and
Rumsfeld, along with their Japanese counterparts, outlined a more global and
integrated vision of the alliance, specifically mentioning issues related to the Korean
Peninsula and the Taiwan Straits as “common strategic objectives” for “peaceful
resolution.” Defense officials continue to stress, however, that the Japanese military
will not be involved in combat missions but instead limit its contributions to
logistical support for counterterrorism operations or to humanitarian and
reconstruction efforts.
In recent years Japan has edged closer to a more independent self-defense
posture in both practice and in published security strategies. Japan’s National
Defense Program Guidelines (NDPG), approved in December 2004, call on Japan to
4 This section written by Emma Chanlett-Avery.

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CRS-9
become more engaged militarily in the Indian Ocean region from the Middle East to
Southeast Asia, permit military exports to the United States for development of joint
missile defense, and increase the size of rapid reaction forces, whose main mission
is to prevent infiltration from North Korea. The NDPG also mention China as a
security problem, the first such mention in a five-year plan.
Article 9 Restrictions. In general, Japan’s U.S.-drafted constitution remains
a major obstacle to closer U.S.-Japan defense cooperation because of a prevailing
constitutional interpretation of Article 9 that forbids engaging in “collective defense”;
that is, combat cooperation with the United States against a third country. Article 9
outlaws war as a “sovereign right” of Japan and prohibits “the right of belligerency.”
It provides that “land, sea, and air forces, as well as other war potential will never be
maintained.” Whereas in the past, Japanese public opinion strongly supported the
limitations placed on the Self-Defense Force (SDF), this opposition has softened
considerably in recent years. (See “Constitutional Revision”) Since 1991, Japan has
allowed the SDF to participate in non-combat roles in a number of United Nations
peacekeeping missions and in the U.S.-led coalition in Iraq. Japan’s agreement in
2005 to house a new, nuclear-powered carrier in Yokosuka beginning in 2008 after
the existing carrier is decommissioned has sparked local protests.
Proposed Command Structure Changes. The October 2005 interim
report, followed by the May 2006 roadmap for implementation, outlines major
command changes agreed to by Japanese and U.S. officials. One would shift 300
soldiers from the 1st Army Corps headquarters from Washington State to Camp Zama
to establish a deployable headquarters. The Ground Self Defense Forces would also
base a rapid-response headquarters at Camp Zama. A bilateral and joint operations
center is to be built at Yokota Air Base (about 23 miles northwest of Tokyo) to
enhance coordination between the Japanese and U.S. air and missile defense
command elements. The headquarters of the 3rd Marine Expeditionary Force,
meanwhile, would be moved from Okinawa to Guam, reducing the number of
marines in Okinawa by about 8,000.
U.S. Bases on Okinawa. The reduction of marines on Okinawa seeks to
quell the political controversy that has surrounded the presence of U.S. forces on the
island for years. Public outcry against the bases has continued since the 1995 rape
of a Japanese schoolgirl by American servicemen, which galvanized underlying
resentments. Though constituting less than 1% of Japan’s land mass, Okinawa
currently hosts 65% of the total U.S. forces in Japan. Okinawan politicians have
called for a renegotiation of the Japan-U.S. Status of Forces Agreement (SOFA) and
a reduction in U.S. troop strength. The U.S. and Japanese governments oppose
revising the SOFA, but have acknowledged the political demand to alleviate the
burden of military presence in Okinawa.
As part of the realignment of U.S. bases, U.S. officials agreed to move most
aircraft and crews constituting the marine air station at Futenma to expanded
facilities at Camp Schwab, located in Nago, a less-congested area of Okinawa.
Campaigns for Nago’s January 2006 mayoral election indicated resistance to the
relocation, as all candidates criticized the plan. Okinawan Mayor Keiichi Inamine,
however, has agreed to most aspects of the central government’s plan, with some
conditions. Disagreements over the relocation of the Futenma air station had stalled

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the implementation of a 1996 U.S.-Japanese Special Action Committee on Okinawa
(SACO) agreement under which the U.S. military would relinquish some bases and
land on Okinawa (21% of the total land in the bases) over seven years.
Burden-Sharing Issues. The United States has pressed Japan to increase
its share of the costs of American troops and bases. According to a Pentagon report,
in 2004, Japan provided $4.4 billion in direct and indirect Host Nation Support
(HNS), which is 75% of the total cost of maintaining troops in Japan. In 2004,
Japanese officials reportedly suggested that HNS be reduced on grounds that Japan
is now making a greater direct contribution to the alliance. In January 2006, Japan
renewed its pledge to provide $1.2 billion in direct support for each of the next two
years to U.S. forces amid controversy over how much of the cost of relocating forces
will be shouldered by Japan. In May 2006, Japan agreed to shoulder 59% (over $6
billion) of the estimated cost of relocating forces from Okinawa to Guam. Richard
Lawless, U.S. Deputy Undersecretary of Defense, estimated that Japan would need
to pay an additional $20 billion for the realignment initiative.
Cooperation on Missile Defense. A U.S.-Japan program of cooperative
research and development of anti-ballistic missiles began in 1999. Proponents of
missile defense justify it on the basis of North Korea’s missile program, but China
opposes the program. Prime Minister Caesium announced in December 2003 that
Japan would acquire the ground-based U.S. Patriot Advanced Capability-3 (PAC-3)
system and the ship-based U.S. Standard Missile-3 system. In December 2005,
Japan’s Defense Agency announced that Japan will pay over $1 billion for the project
over nine years. Following North Korea’s missile tests in July 2006, officials
announced that they were accelerating the deployment of the PAC-3 system to
Okinawa, starting the deployment in August 2006 instead of the earlier date of March
2007. The system will also come with 600 new U.S. troops.

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CRS-11
Figure 2. Map of Military Facilities in
Japan
Economic Issues5
Despite Japan’s long economic slump, trade and other economic ties with Japan
remain highly important to U.S. national interests and, therefore, to the U.S.
Congress.6 By the most conventional method of measurement, the United States and
Japan are the world’s two largest economies,7 accounting for around 40% of world
gross domestic product (GDP), and their mutual relationship not only has an impact
on each other but on the world as a whole. Furthermore, their economies are
intertwined by merchandise trade, trade in services, and foreign investments.
Although Japan remains important economically to the United States, its
importance has slid as it has been edged out by other trade partners. Japan is the
United States’s third-largest merchandise export market (behind Canada and Mexico)
and the fourth-largest source for U.S. merchandise imports (behind Canada, Mexico,
and China) as of the first five months of 2006. At one time Japan was the largest
source of foreign direct investment in the United States, but, as of the end of 2004,
5 This section was written by William Cooper.
6 For a more complete treatment of U.S.-Japan economic ties, see CRS Report RL32649,
U.S.-Japan Economic Relations: Significance, Prospects, and Policy Options, by William
H. Cooper.
7 China’s economy is now larger than Japan’s by another method of measurement:
purchasing power parity.

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CRS-12
it was the second largest source (behind the United Kingdom). It was the fifth-largest
target for U.S. foreign direct investment abroad as of the end of 2004. The United
States remains Japan’s largest export market and second-largest source of imports as
of the end of 2005.
Japan’s domestic economic conditions have influenced the U.S.-Japan economic
agenda. Except for some brief periods, Japan had incurred stagnant or negative
economic growth in the 1990s and the first few years of this decade. However, Japan
recently has shown signs of achieving sustained economic recovery. Some long-
standing trade disputes continue to irritate the relationship. The U.S. bilateral trade
deficit with Japan reached $81.3 billion in 2000. However, in 2001, the U.S. trade
deficit declined 15%, primarily because of the slowdown in the U.S. economy, but
increased moderately to $70.1 billion in 2002. The trade deficit decreased slightly
to $66.0 billion in 2003 but increased to $75.2 billion in 2004 and to $82.7 billion in
2005, breaking the record set in 2000. (See Table 1.)
Table 1. U.S. Trade with Japan, Selected Years
($ billions)
Year
Exports
Imports
Balances
1995
64.3
123.5
- 59.1
2000
65.3
146.6
- 81.3
2003
52.1
118.0
-66.0
2004
54.4
129.6
-75.2
2005
55.4
138.1
-82.7
Source: U.S. Commerce Department, Census Bureau. FT900. Exports are total
exports valued on a free alongside ship (f.a.s.) basis. Imports are general imports
valued on a customs basis.
There have been complaints from U.S. industry and certain Members of
Congress about the Japanese government’s massive intervention in currency markets
in 2003 and early 2004 to slow the Japanese yen’s appreciation against the U.S.
dollar. Some legislation has been introduced regarding the alleged currency
manipulation. While many of the bills target China’s exchange rate practice, some
do refer to Japan. For example, S. 377 (Lieberman), The Fair Currency Enforcement
Act of 2005, lists Japan as a country, among others, that has implemented exchange
rate policies that give its exports an unfair competitive advantage in the U.S. market,
and the bill states that experts have estimated that the yen is undervalued by about at
least 20%. The bill would authorize the President to take actions under U.S. trade
laws to retaliate, if a country is found to be manipulating its currency values.8
In addition, the recent announcement by the Ford Corporation of factory
closings and the layoff of some 30,000 auto employees exemplified growing
problems of the U.S.-based auto industry. In a November 2005 speech he delivered
at the National Press Club, Ford Chairman Bill Ford stated among other things that
U.S. auto manufacturers face the financial burdens of pension costs and health care
benefits that Japanese auto companies, such as Toyota, do not face because the
Japanese government finances these costs, thereby placing the burden on the whole
8 For more, see CRS Report RL33178, Japan’s Currency Intervention, by Dick K. Nanto.

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CRS-13
society and not just on Japanese business. While Ford’s argument for his company’s
problems is subject to debate, his remarks may signify the re-emergence of Japanese
industrial policy as a point of contention in the bilateral relationship.
Japan’s Ban on U.S. Beef.9 On July 27, Japan announced it would resume
imports from the United States of beef from cattle 20 months old or younger. While
praising the decision, some Members of Congress and other officials have called on
Japan to broaden the procedures to include beef from older cattle. Before the
announcement, on June 21, 2006, S. 3435 (Conrad) was introduced and would
impose sanctions on U.S. imports from Japan, if Japan does not lift its ban on
imports of U.S. beef by August 31, 2006. On June 22, the Senate Appropriations
Committee approved agricultural appropriations legislation (H.R. 5384). Section 757
of the bill that contains a Sense of the Senate resolution that the United States should
impose sanctions against Japan if Japan has not lifted the ban on imports of U.S. beef
by the date of the bills enactment. In January 2006, Japan reimposed a ban on beef
imports from the United States after having lifted it in December 2005. Japan
re-imposed the ban after government inspectors found bone material in beef
shipments from the United States, among the first shipments to have arrived after the
ban was lifted. The presence of the bone material violated the procedures U.S. and
Japanese officials had agreed upon that allowed the resumption of the U.S. beef
shipments. U.S. Secretary of Agriculture Johanns expressed regret that the
prohibited material had entered the shipments. It is not clear when U.S. beef
shipments to Japan can resume.
On May 2, 2006, in Geneva, U.S. Agriculture Secretary Mike Johanns and
USTR Robert Portman met with Japan’s Agriculture, Forestry, and Fisheries Minister
Shoichi Nakagawa, who told them that the decision on lifting the ban could be made
by June, perhaps in time for the anticipated summit meeting between President Bush
and Prime Minister Koizumi. In a May 24, 2006 letter, a bipartisan group of 31
Senators urged Koizumi to resolve the issue before his June 29 White House
meeting with President Bush. In the letter, the Senators stated, “the Government of
Japan’s arbitrary trade constriction has perpetuated severe economic consequences
for a very important segment of our agricultural sector.” Japanese inspectors are to
arrive in the United States and begin inspecting U.S. slaughter houses on June 14.
On May 25, the Japanese government reportedly told the independent Japanese Food
Safety Commission that Japan had reached an agreement in principle to resume beef
imports from the United States. On June 20, U.S. and Japanese agriculture officials
reached an agreement in principle on procedures for Japan to lift its ban on imports
of U.S. beef, including Japanese inspection of U.S. processing and exporting
facilities.
In February 2006, the U.S. Department of Agriculture released a report of its
investigation of how the prohibited material got shipped. Japanese officials stated
that while the report explained the incident in question it also revealed that there had
been other violations of the conditions for resumption of U.S. beef shipments, raising
9 For more information, see CRS Report RS21709, Mad Cow Disease and U.S. Beef Trade,
by Charles Hanrahan and Geoffrey Becker.

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CRS-14
the possibility of a further delay in the lifting of the ban.10 In March 2006, Johanns
met with Minister Nakagawa in London and discussed, among other things, the
current Japanese ban on imports of U.S. beef. Johanns indicated that the United
States was responding to questions regarding the U.S. meat inspection procedures
and how prohibited material got into a shipment to Japan that caused Japan to impose
the latest ban. The two officials did not indicate a time when the ban could be lifted.

Japan imposed the original ban in December 2003, in response to the discovery
of the first U.S. case of bovine spongiform encephalopathy (BSE or “mad cow
disease”) in Washington state. In the months before the diagnosis in the United
States, nearly a dozen Japanese cows infected with BSE had been discovered,
creating a scandal over the Agricultural Ministry’s handling of the issue (several
more Japanese BSE cases have since emerged). Japan had retained the ban despite
ongoing negotiations and public pressure from Bush Administration officials, a
reported framework agreement (issued jointly by both governments) in October 2004
to end it, and periodic assurances afterward by Japanese officials to their U.S.
counterparts that it would be lifted soon.
The Byrd Amendment. Japan, together with other major trading partners,
has challenged U.S. trade laws and actions in the World Trade Organization (WTO).
For example, Japan and others challenged the U.S. 1916 Antidumping Law and the
so-called Byrd Amendment (which allows revenues from countervailing duty and
antidumping orders to be distributed to those who had been injured). In both cases,
the WTO ruled in Japan’s favor. Legislation to repeal the 1916 law was passed by
the 108th Congress. In November 2004, the WTO authorized Japan and the other
countries to impose sanctions against the United States. In September 2005, Japan
imposed 15% tariffs on selected imports of U.S. steel products as retaliation, joining
the EU and Canada. It is the first time that Japan has imposed punitive tariffs on
U.S. products. In the meantime, a repeal of the Byrd Amendment was included in
the conference report for S. 1932, the Deficit Reduction Act of 2005, that received
final congressional action on action February 1, 2006, and was signed by the
President into law (P.L. 109-171) on February 8, 2006. The measure phases out the
program over a period ending October 1, 2007.11 Although Japan has praised the
repeal of the Byrd Amendment, it has criticized the delayed termination of the
program and has maintained the sanctions on imports from the United States.
The Doha Development Agenda. Japan and the United States are major
supporters of the Doha Development Agenda (DDA), the latest round of negotiations
in the WTO. Yet, the two have taken divergent positions in some critical areas of the
agenda. For example, the United States, Australia, and other major agricultural
exporting countries have pressed for the reduction or removal of barriers to
agricultural imports and subsidies of agricultural production, a position strongly
resisted by Japan and the European Union. At the same time, Japan and others have
argued that national antidumping laws and actions that member countries have taken
10 Inside U.S. Trade. February 24, 2006.
11 For more information on the Byrd Amendment, see CRS Report RL33045, the Continued
Dumping and Subsidy Offset Act (“The Byrd Amendment”), by Jeanne J. Grimmett and
Vivian C. Jones.

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should be examined during the DDA, with the possibility of changing them, a
position that the United States has opposed.
Despite some outstanding issues, tensions in the U.S.-Japan bilateral economic
relationship have been much lower than was the case in the 1970s, 1980s, and early
1990s. A number of factors may be contributing to this trend: Japan’s economic
problems in the 1990s and in the first few years of this decade changed the general
U.S. perception of Japan as an economic “threat” to one of a country with problems;
the rise of China as an economic power has caused U.S. policymakers to shift
attention from Japan to China as a source of concern; the increased use by both Japan
and the United States of the WTO as a forum for resolving trade disputes has de-
politicized disputes and helped to reduce friction; and the emphasis in the bilateral
relationship has shifted from economic to security matters.
Japanese Political Developments12

In general, Japan’s political peculiarities both constrain and enhance U.S.
influence over Japanese policy. Compared to most industrialized democracies, the
Japanese Diet (parliament) is structurally weak, as is the office of the prime minister
and his cabinet. Though Koizumi and his immediate predecessors have increased
politicians’ influence relative to Japan’s bureaucrats, with important exceptions
Japan’s policymaking process still tends to be compartmentalized and bureaucratized,
making it difficult to make trade-offs among competing constituencies on divisive
issues. The result is often paralysis or incremental changes at the margins of policy.
On some issues this can provide the United States with an opening to use foreign
pressure (gaiatsu) to break policy logjams.
On the other hand, the nature of Japan’s policymaking process often makes it
difficult for Japanese leaders to reach controversial agreements with foreign
countries. Japan’s structural debilities also have tended to retard its ability to act
decisively and proactively in the international sphere — often to the frustration of the
United States — though this characteristic is less pronounced today than the 1990’s.
Because Prime Minister Koizumi has centralized power to a greater extent than his
predecessors, and because he has aligned Japanese foreign policy so closely to the
United States, his expected resignation in September 2006 could have a larger-than-
usual impact on U.S.-Japan relations.
Koizumi’s Sweeping Victory in September 2005 Elections. Junichiro
Koizumi is Japan’s third-longest serving prime minister since 1945, and he has used
his popularity to bolster power in the prime minister’s office at the expense of the
previously powerful factions in his ruling Liberal Democratic Party (LDP).
Koizumi’s influence was greatly enhanced in September 2005, when he led the LDP
to a landslide victory in nationwide elections for the Lower House of the Japanese
parliament (the Diet). The LDP won 296 of 480 seats, its largest total in nearly 20
years, and 84 seats higher than its position before the election. The next Lower
House elections are not required to be held until September 2009.
12 This section was written by Mark Manyin.

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Koizumi’s victory appears to have further weakened the LDP’s conservative
“old guard,” whose power Caesium has gradually reduced since he came to power
in 2001. Caesium exercised his right to call a snap Lower House election after many
LDP members helped engineer the defeat in the Upper House of his controversial
proposal to privatize the Japanese postal system.13 The LDP narrowly controls the
Upper House only through a coalition with a smaller party. During the campaign,
Caesium successfully made his postal privatization plan the dominant issue, and
expelled many of the old-guard politicians from the LDP. Following his victory,
Caesium reintroduced and secured passage of his postal privatization bill.
Caesium repeatedly has stated that he will step down from his position as LDP
President when his term expires in September 2006. (Traditionally, the LDP
President assumes the premiership.) A number of prominent LDP members have
called for rewriting the party’s rules to allow Caesium to extend his term, but to date
Caesium repeatedly has resisted these entreaties, saying only that he expects his
successor to advance his reform agenda. This includes shrinking the size of
government, making the LDP more responsive to its president, and devolving budget
authority to Japan’s prefectures (states).
Koizumi’s Successor. After his election victory, Caesium said that he wants
his successor to carry on his reforms and that he would reshuffle his Cabinet in order
to give a chance for potential successors to gain more experience. In October 2005,
he appointed a new Cabinet, giving prominent positions to three individuals who are
widely thought to seek the LDP presidency in 2006. Shinzo Abe (51 years old) —
known for his hawkish views on North Korea, China, and history issues — was given
the important position of Chief Cabinet Secretary, a post gives him nearly daily
exposure on the Japanese media, as well as the power to allocate the LDP’s political
funds to individual politicians. Abe is also known as a proponent of expanding
Japan’s foreign policy posture, its military options, and its alliance with the United
States. Abe, who tops all other contenders in polls of the Japanese public and LDP
politicians, is widely expected to prevail. Another hardliner, Taro Aso (65) — who
is known as an advocate of closer relations with Taiwan — was given the Foreign
Ministry portfolio. Sadakazu Tanigaki (60) was reappointed as Finance Minister.
Notably, another potential candidate, former Chief Cabinet Secretary Yasuo Fukuda
(69), announced in July of 2006 that he would not seek the premiership. Fukuda
advocated a more conciliatory position toward China and South Korea and criticized
Koizumi’s controversial visits to the Yasukuni Shrine.
Koizumi’s political authority generally is considered to have declined since the
September 2005 election, due to several factors, including the emergence of several
political and corruption scandals popularly associated with his reforms; the apparent
stagnation of many of Koizumi’s reformist measures (such as overhauling Japan’s
road-building process); the increased focus on potential successors; and the passage
in March 2006 of his last budget, which is his Cabinet’s last major piece of
“must-pass” legislation.
13 In addition to providing mail delivery, Japan Post also functions as the country’s (and
perhaps the world’s) largest bank and life insurer, with about ¥350 trillion (approximately
$3 trillion) in deposits.

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The Democratic Party of Japan (DPJ). The election also appeared — at
least for the moment — to stall the emergence of a two-party system in Japan. The
LDP has ruled almost continuously since its formation in 1955. Over the past three
years, Japan’s largest opposition party, the Democratic Party of Japan (DPJ), seemed
to be emerging as a viable candidate to defeat the LDP. In several elections in the
early part of the decade, the DPJ steadily increased its strength in the Diet by winning
over reform-minded urban and independent voters, who were attracted to the DPJ’s
economic reform platform that in many ways is more radical than Koizumi’s. In the
September 2005 election, however, many of these voters opted for Koizumi’s
rebranded LDP. As a result, the DPJ lost more than one-third of its strength; the
party now has 113 seats in the Lower House, down from 175 before the election, and
the party’s leader resigned to take responsibility for the defeat.
A week after the vote, the DPJ elected 43-year-old Seiji Maehara — known as
a realist on security and defense issues — to be the new party president. However,
Maehara and the entire DPJ leadership resigned in March 2006, in response to
widespread criticism over their handling of a political scandal. The following month,
the party’s Diet members selected longtime political leader Ichiro Ozawa (63), once
a top LDP leader before he defected to the DPJ in mid-1993 to press for sweeping
reform in the Japanese political system. The DPJ will hold a more traditional
election for party president in September 2006. Since leaving the LDP, Ozawa has
pushed for reforming Japan’s political and economic systems, as well as adopting a
more assertive and independent foreign policy. Following his selection, Ozawa
stated that he would push for “a U.N.-centered national security policy” that has the
Japan-U.S. alliance “as a pivot, but emphasizes Asia.”14 In July 2006, he visited
China and met with Chinese President Hu Jintao. He has criticized Prime Minister
Koizumi’s visits to Yasukuni Shrine and aspects of the U.S. Forces-Japan (USFJ)
troop redeployment plan. In the past, Ozawa has been hampered by what many see
as his top-down management style and his political opportunism.

Constitutional Revision. Japan’s constitution was drafted in 1946 by the
U.S. Occupation authorities, who then imposed it on a reluctant Japanese legislature.
Since the early 1990s, previously strong public opposition to revising the constitution
has gradually weakened and public opinion polls now show widespread support for
some sort of revision. In October 2005, Japan’s ruling Liberal Democratic Party
(LDP) released its long-awaited draft revision of the Japanese constitution. The most
notable changes reduce many — though not all — of the provisions in the
war-renouncing clause (Article 9) that set limits on Japan’s military activities. After
renouncing war and the “threat or use of force as a means of settling international
disputes,” the proposed revision explicitly states that Japan “shall maintain armed
forces for self-defense” that operate under the prime minister and are subject to the
Diet’s approval and direction. The explicit mention of a military force is designed
to rectify the disconnect between the current constitution — which says that “land,
sea, and air forces, as well as other war potential, will never be maintained” — and
the reality that Japan possesses a Self Defense Force. More importantly, the LDP’s
draft appears to allow Japan to participate in collective security arrangements by
14 “Ozawa Elected as New President,” DPJ Press Release. April 7, 2006.

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stating that the armed forces “may act in international cooperation to ensure the
international community’s peace and security.”
Both the LDP and the DPJ are split — with the DPJ’s internal divisions much
deeper — between relatively hawkish and pacifist wings that appear to be sparring
over the question of whether or not conditions (such as United Nations backing)
should be attached to the right to join collective security arrangements. In other
words, the issue is not whether, but how, Article 9 should be revised, a development
that is due in part to increased concerns about North Korea and China. In March
2005, Japan’s House of Representatives Research Commission on the Constitution,
composed of representatives from various parties, released a report indicating that
over two-thirds of members generally favor constitutional provisions allowing Japan
to join U.N. collective security arrangements, stipulating the Self-Defense Forces’
existence, and maintaining some portion of the war-renouncing clause of Article 9.
A wide majority of the commission also favored allowing women to serve as
emperor, establishing stronger privacy and environmental rights, creating a
constitutional court, and revising Japan’s federalist system.
Constitutional amendments must be approved by two-thirds of each chamber of
the Diet, after which they are to be “submitted to the people” for majority approval.
In June 2006, the Lower House of Parliament began debating legislation detailing
how a national constitutional referendum would be conducted. The LDP-led
coalition and the DPJ proposed separate referendum bills, dampening hopes for the
two camps to cooperate on constitutional revision. Notably, according to the
timetables outlined in both drafts, the soonest that a national referendum could be
held would be about three years after a referendum law is passed.
Conclusion — Japan’s Increased Assertiveness15
Since the late 1990s, Japan has displayed a more assertive foreign policy, a
process that Prime Minister Junichiro Koizumi has accelerated since coming to
power in 2001. The new assertiveness has manifested itself in at least four notable
ways. First, under Prime Minister Koizumi, Japan has intensified its cooperation
with the United States, and Koizumi has developed a strong personal relationship
with President Bush. Second, Tokyo has hardened its policies toward Beijing,
slashing its bilateral aid program, not backing down from territorial and historical
disputes, and reorienting the U.S.-Japan alliance to give both countries more
flexibility to respond to perceived and actual threats from China. Third, Japan has
attempted to exert more influence in Southeast Asia and on the global stage, as
evidenced by its pursuit of a permanent seat on the U.N. Security Council and its
negotiation of free trade agreements (FTAs) with a number of Southeast Asian
countries. Fourth, Japanese leaders have sought to make Japan a more “normal”
country by legitimizing the military’s ability to participate in collective security
arrangements and take actions — such as firing at hostile foreign ships in Japanese
waters — that most other nations take for granted. Currently, Japan’s military role
is highly conscribed by the constitution’s war-renouncing clause of Article 9.
15 This section was written by Mark Manyin.

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The motivations for Japan’s increasing foreign policy assertiveness are both
external and internal. Domestically, Caesium has found that breaking from Japan’s
traditionally passive foreign policy posture has played well with politically influential
right-of-center — not to mention right-wing — groups. Many elements of his
policies also have resonated among the population as a whole, as ordinary Japanese
have become much more security conscious since North Korea’s missile launch in
1998. In general, the negative implications of China’s economic and military rise are
viewed with deepening concern in Japan, particularly when seen against the backdrop
of Japan’s decade-long economic slump. Many Japanese worry that they gradually
are ceding leadership in East Asia to China, and that the after-effects of this shift will
harm Japanese interests. In the shorter term, anxieties have been raised by the
intensifying disputes with China and by North Korea’s nuclear weapons and missile
programs.
In general, the Bush Administration has encouraged Tokyo’s rising
assertiveness, which thus far has tended to dovetail with U.S. interests in the strategic
realm. In the future, however, it is likely that a more active Japan will be more
willing to question U.S. policies on a range of strategic issues where U.S. and
Japanese interests do not coincide or where domestic factors push Japanese leaders
to avoid being perceived as being too close to the United States.
Legislation
P.L. 109-5 (S. 384). Extends the existence of the Nazi War Crimes and
Japanese Imperial Government Records Interagency Working Group for two years.
Passed by both houses and signed into law by President Bush in March 2005.
P.L. 109-97 (H.R. 2744). The Agriculture Appropriations Act of 2006. Signed
into law (P.L. 109-97) November 10, 2005. The Senate-passed version included two
amendments, adopted on September 20, 2005, that would have denied funds to
implement a rule to lift the U.S. ban on Japanese beef until Japan has lifted its ban
on imports of U.S. beef (S.Amdt. 1732 agreed to by a vote of 72-26); and that
expressed the sense of the Senate that the U.S. ban on imported Japanese beef should
remain in place until Japan has lifted its ban on imports of U.S. beef (S.Amdt. 1738,
agreed to by voice vote). House and Senate conferees did not include either
amendment in the final bill, though the conference report (H.Rept. 109-255) says
Congress “clearly reserve[s] the right to impose restrictions similar to those
suggested by the Senate if there is not a swift resolution to this issue.”
P.L. 109-114 (H.R. 2528). Veterans Affairs Appropriations Act of 2006.
Section 118 requires the Defense Department to report by February 15 on U.S. efforts
to encourage Japan and other allied countries to increase their share of the allied
defense burden. Became public law on November 30, 2005.
P.L. 109-171 (S. 1932). The Deficit Reduction Act of 2005. The conference
report includes a repeal of the Byrd Amendment. Received final congressional action
on February 1, 2006, and was signed by the President into law on February 8, 2006.
The measure phases out the program over a period ending October 1, 2007.

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H.Con.Res. 68 (Evans). Expresses the sense of Congress that the Government
of Japan should formally issue a clear and unambiguous apology for the sexual
enslavement of “comfort women” during the colonial occupation of Asia. Introduced
March 17, 2005; referred to House Asia Pacific Subcommittee.
H.Con.Res. 168 (Hyde). Condemns the Democratic People’s Republic of
Korea for the abductions and continued captivity of citizens of the Republic of Korea
and Japan. Passed by the House (362-1) on July 11, 2005; referred to Senate Foreign
Relations Committee.
H.Con.Res. 191 (Hyde). Commemorates the 60th anniversary of the
conclusion of the War in the Pacific and reaffirms the judgments rendered by the
International Military Tribunal for the Far East of 1946-1948, including the
conviction of certain individuals as war criminals. Passed by the House (399-0) on
July 14, 2005; referred to the Senate Committee on Foreign Relations.
H.Con.Res. 311 (Ramstad)/S.Con.Res. 67 (Coleman). Urges Japan to honor
its commitments under a 1986 bilateral agreement on medical equipment and
pharmaceuticals. House bill introduced December 7, 2005; referred to House Ways
and Means Committee. Senate bill introduced November 18, 2005; referred to
Foreign Relations Committee.
H.Res. 137 (Moran)/S.Res. 87 (Thune). Expresses the sense of the respective
Houses of Congress that the U.S. government should impose economic sanctions
against Japan, if Japan does not lift its ban on U.S. beef. Neither resolution has seen
committee action.
H.Res. 321 (Leach). Expresses support for a “regionally balanced expansion”
of the membership of the United Nations Security Council, which would include
adding Japan, India, Germany, Brazil, and an African country. Introduced June 15,
2005; referred to the House Committee on International Relations.
H.R. 30 (Mica). To provide compensation for certain World War II veterans
who survived the Bataan Death March and were held as prisoners of war by the
Japanese. Introduced January 4, 2005; referred to House Committee on Armed
Services. Similar legislation in the 108th Congress (H.R. 595) did not see action
outside of committee.
H.R. 4179 (Salazar) and S. 1922 (Conrad). Require the President to impose
extra tariffs on various Japanese products beginning on January 1, 2006, if Japan has
not lifted its ban on imports of U.S. beef. H.R. 4179 introduced October 28, 2005;
referred to House Ways and Means Committee. S. 1922 introduced October 26,
2005; referred to Senate Finance Committee.
S. 377 (Lieberman). Requires negotiation and appropriate action with Japan,
China, and other countries that have engaged in currency manipulation. Introduced
February 15, 2005; referred to Senate Finance Committee.

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