Order Code RL33436
Japan-U.S. Relations:
Issues for Congress
Updated July 30, 2008
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

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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 initially 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 non-combat support of U.S. and
allied forces in Afghanistan. In 2004 Tokyo sent non-combat troops to Iraq, despite
considerable domestic opposition. In 2005 the United States 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 ruling party’s historic defeat in Upper House elections in July 2007 may
slow some of this cooperation. As Prime Minister Yasuo Fukuda attempts to restore
his party’s leadership, some of Koizumi and Abe’s platform may be placed on hold.
If political jockeying weakens Tokyo’s focus on U.S.-Japan relations as an aging
Japanese population demands more attention to domestic economic issues, the U.S.-
Japan relationship may struggle to maintain its momentum of the past several years.
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 United States’ 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, which have since resumed.

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Contents
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Fukuda, Bush Meet After U.S. “Delists” North Korea . . . . . . . . . . . . . 1
Gridlock and Uncertainty in Japanese Politics . . . . . . . . . . . . . . . . . . . 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
North Korea and the Six-Party Talks . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
United Nations Security Council Reform . . . . . . . . . . . . . . . . . . . . . . . 5
Kyoto Protocol and Climate Change . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Regional and Historical Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
South Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Military Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Agreements to Deepen Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Loss of Momentum in 2007-2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
New International Security Partnerships . . . . . . . . . . . . . . . . . . . . . . . . 9
Article 9 Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
U.S. Bases on Okinawa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Burden-Sharing Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Cooperation on Missile Defense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Economic Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Overview of the Bilateral Economic Relationship . . . . . . . . . . . . . . . . . . . 11
Bilateral Trade Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Japan’s Ban on U.S. Beef . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
U.S.-Japan FTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
The Byrd Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
WTO Dispute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
The Doha Development Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Japanese Politics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Japan’s First Experience with a Divided Parliament . . . . . . . . . . . . . . 16
The Democratic Party of Japan (DPJ) . . . . . . . . . . . . . . . . . . . . . . . . . 16
Constitutional Revision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Japan’s Demographic Challenge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Selected Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
110th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

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List of Figures
Figure 1. Map of Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Figure 2. Map of Military Facilities in Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
List of Tables
Table 1. U.S. Trade with Japan, Selected Years . . . . . . . . . . . . . . . . . . . . . . . . . 12

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Japan-U.S. Relations: Issues for Congress
Recent Developments
Fukuda, Bush Meet After U.S. “Delists” North Korea. Prime Minister
Yasuo Fukuda and President George Bush met ahead of the G-8 Summit, just days
after the White House announced that it intended to remove North Korea from the
lists of state sponsors of terrorism. (See Six-Party Talks section below for more
details.) The removal, part of a series of phased actions agreed upon in the Six-Party
Talks, was opposed by many in Japan who felt it disregarded Tokyo’s concerns,
particularly the abduction of several Japanese citizens in the 1970s and 1980s. Bush
assured Fukuda that the United States would not abandon the abductees and the two
leaders agreed to cooperate on both the nuclear and abductions issues.
Gridlock and Uncertainty in Japanese Politics. Fukuda continues to
face plummeting public approval ratings and gridlock in the divided Diet
(parliament). The Upper House of the Diet, controlled by the opposition Democratic
Party of Japan (DPJ), has successfully stymied several legislative initiatives from
Fukuda’s Liberal Democratic Party (LDP) in an attempt to force Fukuda to call for
early elections in the more-powerful Lower House. By law, the Lower House
election must be held by September 2009. The government’s mismanagement of
pension records have dragged his approval ratings to the 20% range, and the Prime
Minister appears to have received little to no public approval boost from hosting the
G-8 summit. In June, the DPJ-led Upper House passed a non-binding censure
motion against Fukuda, a first in Japanese history. The following day, the LDP-led
Lower House passed a confidence motion in support of Fukuda.
Despite the LDP’s woes, it appears unlikely that the DPJ, itself riven with
internal conflicts, will force a general election in the summer or early fall. There are
signs, however, that the DPJ is making preparations for an early dissolution of the
Lower House (i.e. for elections) in 2008 or early 2009. In September, the DPJ will
hold its regular election for party president. Current president Ichiro Ozawa is widely
expected to easily retain his post.

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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 the 109th Congress, members showed a renewed interest in U.S.-Japan relations.
After holding only two Japan-specific public hearings from 2001 through 2004,
Congress held four in 2005-2006. 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

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by worsening Sino-Japanese and South Korean-Japanese relations. Former Chairman
of the House International Relations Committee Henry Hyde suggested in an April
2006 letter to Speaker Dennis Hastert that Prime Minister Koizumi should not
address a joint session of Congress unless he pledged to stop visiting Yasukuni
Shrine, which enshrines the names of several Class A war criminals from World War
II, and convened a hearing on Japan’s “history problem” in September 2006.
The “comfort women” controversy in the 110th Congress reignited congressional
concern about revisionist views of history in Japan. In September 2007, the House
passed H.Res. 121, calling on the government of Japan to “formally acknowledge,
apologize, and accept historical responsibility in a clear and unequivocal manner” for
its treatment of women forced to serve as prostitutes for the Japanese military during
its colonization and occupation of Asia in the 1930s and 1940s. The resolution
passed by voice vote and attracted 167 co-sponsors, reportedly driven in part by a
June 2007 Washington Post advertisement signed by several Japanese legislators and
academics rejecting the historical basis of the resolution. A few days later, the House
also passed H.Res. 508, which praised the U.S.-Japan alliance and Japan’s
contributions to the effort against international terrorism. The bill was seen as an
attempt to blunt the negative diplomatic impact of the former resolution. The
question of historical truth and memory has emerged as a prominent theme in
congressional relations with Japan. (See the “Legislation” section.)
Major Diplomatic and Security Issues1
Global Issues
Japan Country Data
Counterterrorism Cooperation.
Population: 127.4 million (July 2006 est.)
Following the terrorist attacks of September
% of Population over 64: 21% (U.S. =
11, 2001, the Koizumi government initiated
12.4%) (2007)
a series of unprecedented measures to
Area: 377,835 sq km (slightly smaller
than California)
protect American facilities in Japan and
Life Expectancy: 82 years (2007 est.)
provide non-lethal, “rear area” logistical
Per Capita GDP: $33,800 (2007 est.)
support to U.S. military operations against
purchasing power parity
Al Qaeda and the Taliban in Afghanistan.
Primary Export Partners: US 22.8%,
The latter mainly took the form of at-sea
China 14.3%, South Korea 7.8%,
Taiwan 6.8% (2006)
replenishment of fuel oil and water to U.S.,
Primary Import Partners: China 20.5%,
British, French, and other allied warships
U.S. 12%, Saudi Arabia 6.4%, UAE
operating in the Indian Ocean. The
5.5%, Australia 4.8%, South Korea
dispatch of Japan’s Maritime Self-Defense
4.7% (2006)
Forces (MSDF) was the first such
Yen:Dollar Exchange Rate: 117.99
(2007), 116.18 (2006), 110.2
deployment since World War II. A small
(2005), 108.2 (2004), 115.9 (2003),
flotilla of Japanese transport ships, oilers,
125.4 (2002)
and destroyers provided about 30% of the
Foreign Exchange Reserves: $881 billion
fuel used by U.S. and allied warships, and
(2006 est.)
Japan’s Air Self-Defense Force (ASDF)
Source: CIA World Factbook, February 2008
conducted hundreds of airlift support
1 This section was written by Emma Chanlett-Avery.

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CRS-4
missions for U.S. forces. After a suspension due to political opposition, Fukuda
reinstated the Afghanistan mission in early 2008.
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. The Lower House of the Diet approved a two-year extension
of the air force transport mission in May 2007, but, according to some reports, the
ASDF may end its mission once U.N. authorization for multinational forces in Iraq
expires in December 2008.
North Korea and the Six-Party Talks. As the Bush Administration has
moved aggressively to reach a deal on denuclearization with North Korea in the Six-
Party Talks, distance has emerged between Washington and Tokyo. Former Prime
Minister Abe rose to prominence based on his hardline position on Pyongyang’s
responsibility to disclose the fate and/or whereabouts of several Japanese citizens
abducted by North Korean agents in the 1970s and 1980s.2 Japan pledged that it
would not provide economic aid to North Korea without resolution of the abductees’
issue. U.S. chief negotiator Christopher Hill and President Bush have given
rhetorical support for Japan’s position, but have also indicated that the negotiations
will not be held up because of a lack of progress in Japan-North Korea bilateral
issues. The abductee issue remains an emotional topic in Japan, and the opposition
party has not taken a substantially different position from the LDP. Although some
Japanese officials and media figures privately acknowledge that Japan may need to
compromise in order to remain relevant in the ongoing talks, the political potency
and widespread anger surrounding the abductees make it difficult for leaders to adopt
a softer position.
Before the United States announced it planned to remove North Korea from the
list of state sponsors of terrorism in June 2008 in exchange for North Korean
concessions on its nuclear program, Japanese officials had expressed alarm about the
anticipated removal. In the past, U.S. leaders linked North Korea’s inclusion on the
list to the abduction issue, although State Department officials reportedly claimed
that the issue was not a legal obstacle for removal. In December 2007, the
2 For more information, see CRS Report RS22845, North Korea’s Abduction of Japanese
Citizens and the Six-Party Talks, by Emma Chanlett-Avery.

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Committee on Abduction of Japanese Citizens by North Korea of the Lower House
adopted a resolution urging the United States to refrain from “de-listing” North
Korea. Although conservative groups in Japan have protested the move, the overall
reaction has been somewhat muted. Tokyo officials maintain that U.S. and Japanese
goals remain the same. During his visit to Japan for the G-8 summit, President Bush
promised Fukuda that he would not forget the abductions issue.
Until the shift toward negotiation in Washington, Japan’s policy toward North
Korea aligned closely with the U.S. position in the Six-Party Talks. Japan has
insisted on North Korea abandoning its nuclear weapons, has taken steps to squeeze
North Korea economically, and participates in the U.S.-led Proliferation Security
Initiative (PSI). After North Korea test-fired several missiles in July 2006 and tested
a nuclear device in October 2006, Japan strongly supported punitive United Nations
Security Council resolutions that condemned the actions and called for trade
restrictions. In addition, Japan imposed unilateral sanctions more stringent than the
UNSC resolutions, including a ban on all North Korean ships in Japanese ports,
restrictions on imports and on most North Koreans entering Japan, and a freeze on
bank remittances to North Korea from the ethnic Korean community in Japan.
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, 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. To become a member, Japan
must obtain support from two-thirds (128 countries) of all 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.
Efforts to gain membership appear to have stalled in the past few years.
Kyoto Protocol and Climate Change. Tokyo has sought to highlight
Japan’s leadership on environmental issues. At the Davos World Economic Forum
in January 2008, Fukuda announced that he wants Japan to become a “catalyst and
a locomotive” in creating a post-Kyoto framework after 2012, and that he wants
“future generations to remember the new framework in association with my country.”
At the 2008 G-8 summit in Hokkaido hosted by Japan, the forum agreed to work
towards halving the amount of greenhouse gas emissions by 2050, marking the first
time that the United States has signed on to such a goal.
Japan is the fourth-leading producer of 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 the plan. In 2005, Japan joined with the United States, China,
India, South Korea, and Australia in the non-binding Asia-Pacific Partnership on
Clean Development and Climate, which calls for cooperation on the development and
diffusion of technology to combat climate change, reduce pollution, and promote
energy security. Some environmentalists have criticized the arrangement for its
absence of mandates — particularly on greenhouse gas emissions — and for being

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a part of a suspected U.S. strategy to prevent the Kyoto Protocol from being renewed
after it expires in 2012. A summit to address how to replace the Protocol is
scheduled for May 2009 in Copenhagen, Denmark.
Regional and Historical Issues
Despite underlying distrust, Tokyo’s relationships with Beijing and, until
recently, Seoul appear to be on a solid upward trajectory. Part of this is due to
Fukuda’s emphasis on developing friendly relations with Japan’s neighbors; his
pledge not to visit the controversial Yasukuni Shrine was perhaps the most
significant in terms of improving the diplomatic atmosphere. The Shinto shrine
honors Japanese soldiers who died in war, including 14 war criminals who were
convicted by the International Military Tribunal for the Far East following Japan’s
defeat in World War II. Under former Prime Minister Koizumi (2001-2006), Japan’s
relations with China and South Korea suffered, largely because of his annual visits
to the site. Historical issues have long dominated Japan’s relationships with its
neighbors, with many Asians, and particularly those in China and South Korea, still
resentful of Japan’s occupation policies and aggression in the World War II period.
China. In concert with the leadership in Beijing, which has been keen to shore
up its foreign relations before the 2008 Summer Olympics, both Abe and Fukuda
substantially warmed Sino-Japanese ties. Although analysts emphasize that
geopolitical rivalry between China and Japan is likely to endure, the short-term
outlook is positive. The past year has seen several notable accomplishments,
including successful reciprocal visits by heads of state and a breakthrough agreement
to jointly develop gas fields in the East China Sea, the site of long-standing
territorial disputes. Driven by self interest, both sides appear to have decided to put
aside nationalist rivalries for now and focus on common concerns such as regional
stability to further economic development and boost already robust trading relations.
Chinese President Hu Jintao’s carefully orchestrated visit to Japan in May 2008
was the first by a Chinese leader to Japan in a decade. The warmth of the visit was
in stark contrast to Jiang Zemin’s 1998 visit — during which he criticized publicly
Japanese officials for imperial Japan’s war-time aggression — and the subsequent
downturn in relations under former Prime Minister Junichiro Koizumi. Notably
absent from the Chinese leader’s statements was a call for Japan to apologize for
historical grievances, and both sides emphasized a “forward-looking” friendship. The
two leaders agreed to hold annual summits, cooperate on environmental technology,
and enhance cultural exchanges. Days later, after China was struck by a devastating
earthquake, Japan immediately offered condolences and pledged assistance. Sixty
Japanese earthquake rescue experts then were dispatched to the hard-hit Sichuan
province, the first foreign team that Beijing accepted.
The official reconciliation, however, may be challenged by sentiment among the
Japanese public, some political groups, and the military. In early 2008, several
packages of “gyoza” meat dumplings imported into Japan from China that contained
a toxic pesticide sickened scores of people. Although Chinese and Japanese officials
reportedly reacted quickly, the incident renewed long-standing concerns among the
Japanese public about the safety and hygiene practices for Chinese products. Further,
some conservative nationalist voices have criticized the Fukuda government for

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CRS-7
being too “soft” on Beijing and practicing “kow-tow diplomacy.” And despite
official military-to-military contact in the form of reciprocal port calls, suspicion of
Beijing’s motives remains high among some military officials, who report periodic
Chinese military activities around Japan’s territory, including a submarine incursion
in 2004 close to Okinawa and a fleet of warships near a disputed gas field.
South Korea. The election of Lee Myung-bak as president of South Korea
appeared at the outset to improve prospects for Seoul-Tokyo relations. After his
election in December 2007, Lee indicated his desire to engage in more cooperation
with Japan, in contrast to his predecessor Roh Moo-hyun, whose rhetoric against
Japan many claimed precluded any meaningful engagement. Lee has said he would
not emphasize history issues with Japan. However, in summer 2008 a long-standing
dispute over the ownership of several small islands (known as Dokdo in Korean and
Takeshima in Japanese) has flared anew after reports that Japan would refer to the
islands as its territory in a handbook for teachers and textbook publishers. (The
islands have been administered by South Korea since 1945.) This led South Korea
to recall its ambassador to Japan and rebuke the Japanese ambassador in Seoul, as
well as reject an offer for talks between the two foreign ministers at a regional forum
in Singapore. Although both capitals have made some attempt to quell the
controversy, the weakened political standing of both leaders limits their ability to
take on an issue charged with nationalist tones. In addition, fundamental
disagreements on a range of issues, including how to deal with North Korea’s nuclear
weapons, may challenge a full-scale revitalization of bilateral ties.
Military Issues3
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
recent years Japan has edged closer to a more independent self-defense posture in
both practice and in published security strategies. In December 2006, Japan’s
Defense Agency was formally upgraded to a ministry for the first time since World
War II, giving the ministry more clout in budget and policy-making decisions.
Agreements to Deepen Cooperation. A series of Security Consultative
Committee meetings (SCC, also known as the “2+2” meeting) of the Japanese and
U.S. foreign and defense ministers have outlined plans to expand the alliance beyond
its existing framework. 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 slated to take a more active role in contributing to global stability, primarily
through increased coordination with the U.S. military. Key features of the
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.
3 For more information on the U.S.-Japan alliance, see CRS Report RL33740, The Changing
U.S.-Japan Alliance: Implications for U.S. Interests, by Emma Chanlett-Avery.

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CRS-8
A statement from the “2+2” session in April 2007 reiterated many features of
previous meetings, with an emphasis on intelligence sharing and ballistic missile
defense cooperation. Implementation of the plan to relocate 8,000 Marines to Guam
and to replace the controversial Futenma Marine Air Station in Okinawa remains
slow. 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. 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
Japanese capabilities because of budgetary restraints.
Loss of Momentum in 2007-2008. Political shifts in Japan since 2006
appear to have slowed some of the increased cooperation in the U.S.-Japan alliance.
Although ties remain strong fundamentally, the Bush Administration shift on North
Korean nuclear negotiations, the July 2007 House resolution criticizing the Japanese
government for past “comfort women” policies, and the apparent decision not to
consider exporting the F-22 to Japan may have undermined to some degree Japanese
confidence in the robustness of the alliance.4 Koizumi and Abe’s platform of
enhancing Japan’s role in global affairs had been encouraged by U.S. officials who
saw Japan’s strategic interests aligning with their own. Implementation of the “2+2”
agreements depends on Tokyo providing the necessary resources and political capital.
Because the realignment and transformation initiatives involve elements that are
unpopular in the localities affected, successful implementation depends on leadership
from the central government. If the ruling party continues to struggle to reestablish
itself, details of the hard-fought agreements designed to sustain the alliance
politically may falter.
A series of high-profile alleged crimes committed by U.S. military personnel in
2007-2008 sparked public anger about the troops’ presence in Japan. Four Marines
were accused of gang-raping a 19-year old in Hiroshima, another marine was accused
of sexually abusing a 14-year old in Okinawa, and a sailor was charged with
murdering a taxi driver in Yokosuka. U.S. officials, mindful of fall-out from a
similar incident in 1995, in which three U.S. servicemen were convicted of raping a
12-year-old, cooperated with local Japanese authorities by handing over the suspects
and, in the first two cases, decided to court-martial the marines when Japanese
prosecutors dropped charges. The officials also announced they would undertake a
review of sexual harassment training procedures for U.S. military personnel.
During the political maneuvering that followed the July Upper House elections,
Japanese support of the U.S.-led Operation Enduring Freedom (OEF) in Afghanistan
emerged as a key issue of contention. Although re-fueling operations were eventually
resumed, the opposition parties succeeded in allowing the “Anti-terrorism Special
Measures Law” authorization to expire, creating a gap in MSDF participation.
Japanese participation is limited to activities related to provision of fuel and water
to coalition forces. The opposition took a similar tactic for the renewal of host nation
support funding. (See “Burden Sharing Issues” section below.)
4 For more information on the F-22 issue, see CRS Report RS22684, Potential F-22 Raptor
Export to Japan, by Christopher Bolkcom and Emma Chanlett-Avery.

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CRS-9
New International Security Partnerships. In early 2007, Japan signed a
bilateral agreement with Australia that pledges cooperation on counterterrorism,
maritime security, peace-keeping operations, and disaster relief. The pact, though
short of a formal military alliance, may help to establish a framework of security
cooperation among Japan, Australia, the United States, and, potentially, India. Such
partnerships adhere to the stated goal of “values-based diplomacy,” in which Japan
plans to strengthen ties with other democracies with similar political and economic
freedoms. Continuing this trend, in September 2007 Japan joined a multinational
naval exercise with the United States, Australia, Singapore, and India in the area west
of the Malacca Straits. The exercise reinforced two interrelated trends in Asia-
Pacific defense dynamics: the U.S.-led campaign of strengthening security ties
among democratic allies and the strategic countering of Chinese military power. On
the sidelines of the 2007 Asia Pacific Economic Cooperation (APEC) forum, Japan,
Australia, and the United States held their first trilateral meeting.
Article 9 Restrictions. In general, Japan’s U.S.-drafted constitution remains
an obstacle to closer U.S.-Japan defense cooperation because of a prevailing
constitutional interpretation of Article 9 that forbids engaging in “collective self-
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.” 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. Abe had indicated his intention to amend some of these
restrictions by reinterpreting the right of collective self defense and, eventually,
amending the constitution itself. (See “Constitutional Revision.”) Fukuda is thought
to be less supportive of such a change. 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.
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. In early 2008, the charge that a U.S. Marine sexually abused a
young Japanese girl renewed public outcry against the bases that had existed since
the 1995 rape of a Japanese schoolgirl by American servicemen. 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. The agreement remains
stalled, however, over a host of environmental, noise, and funding concerns.
Burden-Sharing Issues. The United States has pressed Japan to increase
its share of the costs of American troops and bases. According to Pentagon reports,
Japan has over the years provided up to$4 billion annually in direct and indirect Host
Nation Support (HNS), which constitutes about 75% of the total cost of maintaining
troops in Japan. In recent years, Japanese officials have reportedly suggested that
HNS be reduced on grounds that Japan is now making a greater direct contribution

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CRS-10
to the alliance. Political divisions between the LDP-controlled Lower House and the
DPJ-controlled Upper House in spring 2008 led to a delay in the implementation of
a new agreement, which pledges to pay directly about 140 billion yen annually (about
$1.4 billion) through FY2010 to defray the costs of stationing troops in Japan. The
Upper House rejected the bill, citing opposition to paying for “recreational” activities
by the U.S. military, but the approval by the more powerful Lower House went into
effect after a month’s delay. Japan pays for most of the salaries of about 25,000
Japanese employees at U.S. military installations.
Cooperation on Missile Defense. A U.S.-Japan program of cooperative
research and development of anti-ballistic missiles began in 1999. The decision to
acquire the ground-based U.S. Patriot Advanced Capability-3 (PAC-3) system and
the ship-based U.S. Standard Missile-3 system was justified largely on the basis of
North Korea’s missile program. In December 2005, Japan’s Defense Agency agreed
that Japan will pay over $1 billion for the project over nine years. Following North
Korean missile tests in July 2006, officials announced that the deployment of the
PAC-3 system to Okinawa would accelerate. In December 2007, a Japanese destroyer
successfully intercepted a missile in a test exercise near Hawaii.
Figure 2. Map of Military Facilities in Japan

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CRS-11
Economic Issues5
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.
Overview of the Bilateral Economic Relationship
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 end of 2006. At one time Japan was the largest source of foreign
direct investment in the United States, but by 2006 had fallen behind the United
Kingdom. It was the ninth-largest target for U.S. foreign direct investment abroad
as of the end of 2005. The United States remains Japan’s largest export market and
second-largest source of imports as of the end of 2006.
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
has shown signs of achieving sustained economic recovery during the last three years.
Some long-standing trade disputes continue to irritate the relationship. The U.S.
bilateral trade deficit with Japan reached a record $88.4 billion in 2006. In 2007,
U.S. exports rose slightly and imports declined because of a depreciating dollar, the
U.S. trade deficit with Japan decreased to $82.8 billion. (See Table 1.)
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
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
2006
59.6
148.1
-88.4
2007
62.7
145.5
-82.8
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.
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.
Bilateral Trade Issues
Japan’s Ban on U.S. Beef.8 In December 2003, Japan imposed a ban on
imported U.S. beef 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.
In December 2005 Japan lifted the ban after many months of bilateral
negotiations but reimposed it in January 2006 after Japanese government inspectors
found bone material among the first beef shipments to have arrived from the United
States after the ban was lifted. The bone material violated the procedures U.S. and
Japanese officials had agreed upon. U.S. Secretary of Agriculture Mike Johanns
expressed regret that the prohibited material had entered the shipments.
8 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-13
In July 2006, Japan announced it would resume imports of U.S. beef from cattle
20 months old or younger; the first shipments arrived in August 2006. While
praising the decision, some officials have called on Japan to broaden the procedures
to include beef from older cattle. Members of the 110th Congress may press Japan
to lift restrictions on imports of U.S. beef further. In February 2007, Japan
suspended beef shipments from a Tyson’s plant in Nebraska after Japanese inspectors
discovered beef from cattle older than 30 months. To date, the action has not
affected other shipments of U.S. beef from Japan.
In May 2007, the World Organization for Animal Health (OIE) announced that
the United States was a “controlled risk” regarding BSE, and the U.S. Department
of Agriculture urged Japan to allow U.S. boned and boneless beef from cattle older
than 20 months to enter Japan. The Japanese government has replied that it needs
to verify the results of audits of U.S. meat-packing facilities and obtain findings from
the Japanese government Food Safety Commission. On August 3, 2007, Japanese
officials notified their U.S. counterparts that Japan is considering allowing imports
of U.S. beef from cattle up to 30 months of age. The government’s recommendation
would have to be approved by the independent Japan Food Commission before it
could go into effect. The Japanese officials did not say how long this process would
take.9 The change could have a major impact on U.S. exports to beef to Japan, by
increasing the share of cattle eligible for export to Japan from 10% of the herd to
90%, according to one analysis. A major concern of Japanese agricultural officials
is the ability to trace the origin of beef to ensure compliance with Japanese safety
regulations.10
In late April 2008, the Japanese government suspended imports of beef from one
U.S. supplier, National Beef, because the shipment contained beef parts that are
banned under the regulations agreed to by the United States and Japan. However,
Japan did not ban all beef imports from the United States, although National Beef
had been the largest supplier. U.S. officials said they would investigate to see why
the errant shipment took place.11 It is not clear whether this episode would affect
U.S. efforts to get Japan to lift all restrictions on imports of U.S. beef.
U.S.-Japan FTA. With the conclusion of negotiations on a U.S.-South Korean
free trade agreement (KORUS FTA) on April 1, 2007, and the formation of FTAs
among other East Asian countries, interest seems to have increased in the possibility
of a U.S.-Japan FTA. Japanese business leaders are concerned about being adversely
affected by the trade preferences that South Korean exporters would gain under the
proposed KORUS FTA. In May 2007, a Japanese government advisory panel
recommended that Japan undertake the formation of an economic partnership
agreement (EPA), Japan’s version of an FTA, with the United States. During their
late April 2007 summit meeting, President Bush and Prime Minister Abe touched on
the issue. According to a White House fact sheet, they agreed to exchange
information about one another’s FTAs and EPAs with third countries. U.S.
9 International Trade Daily. August 6, 2007.
10 Feedstuffs. August 13, 2007.
11 International Trade Reporter. May 1, 2008.

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CRS-14
Ambassador to Japan J. Thomas Schieffer stated in a May speech before the Asia
Society that the United States would welcome an FTA with Japan as long as
agricultural trade is a part of it. A number of observers have argued that Japan’s
restrictions on agricultural imports would be a major stumbling block to an FTA.
Insurance. Market access in Japan for U.S. and other foreign insurance
providers has been the subject of bilateral trade agreements and discussion for some
time. Current U.S. concerns center around making sure that Japan adheres to its
agreements with the United States, especially as Japan’s domestic insurance industry
and government regulations of the industry are restructured. Specifically, American
firms have complained that little public information is available on insurance
regulations, how those regulations are developed, and how to get approval for doing
business in Japan. They also assert that government regulations favor insurance
companies that are tied to business conglomerates — the keiretsu — making it
difficult for foreign companies to enter the market.
The United States and Japan concluded agreements in 1994 and 1996 on access
to the Japanese market for U.S. providers of life and non-life insurance and also on
maintaining competitive conditions for foreign providers in the specialty insurance
market — cancer insurance, hospitalization, nursing care, and personal accident
insurance. U.S. and Japanese officials continue to meet under those two agreements,
and U.S. providers have been able to expand their presence in Japan under them,
according to the Office of the U.S. Trade Representative (USTR).
However, the United States has raised concerns about Kampo, the
government-owned insurance company under the Japan Postal Service, which offers
insurance services that directly compete with U.S. and other privately owned
providers. The United States has also raised questions about the activities of
regulated and unregulated insurance cooperatives, kyosai, claiming that these entities
do not have to adhere to the same regulations that bind traditional private insurance
companies, creating an unfair competitive advantage. A Japanese government
privatization framework released in July 2006 generated statements from the
American Chamber of Commerce in Japan and from the American Council of
Insurers arguing that the privatization plan would allow Kampo to compete with
foreign insurance providers by offering new products before it has been completely
privatized. On October 1, 2007, the Japanese government began the privatization,
a process that is expected to last ten years. U.S. industry and U.S. policymakers have
indicated they will continue to monitor the privatization to make sure U.S. service
providers are not placed at a competitive disadvantage in the Japanese market.
The Byrd Amendment. Japan, together with other major trading partners,
challenged U.S. trade laws and actions in the World Trade Organization (WTO). For
example, Japan and others challenged the so-called Byrd Amendment (which allows
revenues from countervailing duty and antidumping orders to be distributed to those
who had been injured). The WTO ruled in Japan’s favor. In November 2004, the
WTO authorized Japan and the other complainant-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 had 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

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CRS-15
Deficit Reduction Act of 2005, that 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, 2007.12 Although Japan has praised the repeal of the Byrd Amendment,
it criticized the delayed termination of the program and has maintained the sanctions
on imports from the United States. Consequently, Japan announced in August 2006
that it would maintain the tariff sanctions until October 1, 2007, and again extended
the sanctions for another year in August 2007.
WTO Dispute. On January 10, 2008, Japan requested permission from the
WTO to impose sanctions on U.S. imports valued at around $250 million in
retaliation for the failure of the United States to comply with a WTO Appellate Body
decision against the U.S. practice of “zeroing” in antidumping duty determinations.
On April 21, the WTO agreed to establish a dispute panel to hear the case and the
panel is expected to issue its determination within 90 days.13 The practice is one
under which the U.S. Department of Commerce treats prices of targeted imports that
are above fair market value as zero dumping margin rather than a negative margin.
It results in higher overall dumping margins and U.S. trading partners have claimed
and the WTO has ruled that the practice violates WTO rules.14
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
should be examined during the DDA, with the possibility of changing them, a
position that the United States has opposed.
In July 2006, WTO Director-General Pascal Lamy suspended the negotiations
because, among other reasons, the major participants could not agree on the
modalities that negotiators would use to determine how much they would liberalize
their agricultural markets and reduce agricultural subsides. Negotiators have been
meeting in smaller groups to try to restart the talks. The resumption of negotiations
will depend in large part on whether the United States and Japan, along with the
European Union and developing countries, can resolve their differences.
12 For more information on the Byrd Amendment, see CRS Report RL33045, The Continued
Dumping and Subsidy Offset Act (“Byrd Amendment”), by Jeanne J. Grimmett and Vivian
C. Jones.
13 International Trade Daily. April 21, 2008.
14 International Trade Reporter. January 17, 2008.

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CRS-16
Japanese Politics15
Background
In general, Japan’s political peculiarities both constrain and enhance U.S.
influence over Japanese policy. Compared to most industrialized democracies, the
Japanese parliament is structurally weak, as is the office of the prime minister and his
cabinet. Though former Prime Minister Koizumi and his immediate predecessors
increased politicians’ influence relative to Japan’s bureaucrats, with important
exceptions Japan’s policymaking process 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 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 1990s.
Japan’s First Experience with a Divided Parliament. Prime Minister
Yasuo Fukuda, a pragmatic veteran of the ruling Liberal Democratic Party (LDP),
assumed office in September 2007 after his predecessor, Shinzo Abe, resigned
suddenly. Abe’s resignation was preceded by a major electoral defeat in
parliamentary elections at the hands of the Democratic Party of Japan (DPJ), the
largest opposition party. As a result, the DPJ claimed control of the Upper House,
marking the first time that the LDP has lost power in the less-powerful chamber of
Japan’s bicameral legislature. The LDP still comfortably controls the more powerful
Lower House in a coalition with the smaller Komei (“Clean Government”) party.
DPJ leader Ichiro Ozawa has succeeded in constructing procedural obstacles to block
parts of the LDP’s agenda, but a series of political missteps and a lack of unity in the
DPJ has diminished his overall influence.
In part because of the LDP’s tenuous hold on power, Fukuda is not likely to
pursue Abe’s legislative agenda that sought to expand Japan’s ability to participate
more actively in regional and global security initiatives. Abe’s platform of enhancing
Japan’s role in global affairs had been encouraged by U.S. officials who saw
alignment between Japanese and U.S. strategic interests.
The Democratic Party of Japan (DPJ). With its victory in the July 2007
Upper House election, the DPJ has re-emerged as a viable candidate to defeat the
LDP and created an opening for a two-party system in Japan. The LDP has ruled
almost continuously since its formation in 1955. The results represent a sharp
reversal from the DPJ’s showing in the 2005 Lower House elections, when the DPJ
lost more than one-third of its strength. With this win, the DPJ hopes to build on its
15 This section was written by Mark Manyin and Emma Chanlett-Avery.

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CRS-17
earlier progress: 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. In the September 2005 election, however, many of these voters
opted for Koizumi’s LDP, in part because Koizumi was able to establish himself —
rather than the DPJ — as the symbol of reform. In the July 2007 elections, however,
the DPJ was able to capitalize on widespread discontent with Abe by emphasizing
economic and social security issues, and succeeded in winning over large numbers
of voters from the rural areas of Japan, usually an LDP stronghold.
Much of the credit for the DPJ’s victory has been accorded to Ozawa’s electoral
strategy. Ozawa was once a top LDP leader before he defected in mid-1993 to press
for sweeping reform in the Japanese political system. 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.” 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, the 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 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

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CRS-18
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 May 2007, after over a year of debate, the Diet passed legislation detailing how a
national constitutional referendum would be conducted. However, the bill was
passed without any significant DPJ support. Indeed, 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 timetable outlined in
the bill that passed, the soonest that a national referendum could be held would be
three years after a referendum law is passed, i.e. 2010.
Japan’s Demographic Challenge
Japan’s combination of a low birth rate, strict immigration practices, and a
rapidly-ageing population present policymakers with a significant challenge. Polls
suggest that Japanese women are avoiding marriage and child-bearing because of the
difficulty of combining career and family in Japan; the birthrate has fallen to 1.25,
far below the 2.1 rate necessary to sustain a population size. Japan’s current
population of 128 million is projected to fall to about 100 million by mid-century.
Concerns about a huge shortfall in the labor force have grown, particularly as the
elderly demand more care. Japan’s National Institute of Population and Social
Security Research projects that the working-age population will fall from 85 million
in 2005 to 70 million by 2030. Japan’s immigration policies have traditionally been
strictly limited, but policy adjustments have allowed for a larger foreign labor force.
Over 68,000 foreign workers came to Japan in 2006 under a government-sponsored
training program, in addition to 80,000 on an extended program.16 With government
encouragement, some private firms offer incentives to employees with children.
Selected Legislation
110th Congress
H.R. 6497 (Hooley). Requires the payment of compensation to members of the
Armed Forces and civilian employees of the United States who were forced to
perform slave labor by the Imperial Government of Japan or by corporations of Japan
during World War II, or the surviving spouses of such members, and for other
purposes. Referred to the Committee on Armed Services on 7/15/2008, and in
addition to the Committees on the Judiciary, and Ways and Means, in each case for
consideration of such provisions as fall within the jurisdiction of the committee
concerned.
S. 3107 (Bingaman). Requires the payment of compensation to members of the
Armed Forces and civilian employees of the United States who were forced to
16 “Foreign Labor Works for Japan,” Wall Street Journal Asia. May 25, 2007.

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CRS-19
perform slave labor by the Imperial Government of Japan or by corporations of Japan
during World War II, or the surviving spouses of such members, and for other
purposes. Referred to the Committee on Finance on 6/10/2008.
H.R. 2886 (Knollenberg). To address the exchange-rate misalignment of the
Japanese yen with respect to the United States dollar, and for other purposes.
Referred to the Committee on Ways and Means on 6/27/2008, and in addition to the
Committee on Financial Services, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned.
H.R. 1570 (Mica). Provides compensation for certain World War II veterans
who survived the Bataan Death March and were held as prisoners of war by the
Japanese. Referred to House Committee on Armed Services on 3/19/2007.
H.R. 3650 (Ros-Lehtinen). Provides for the continuation of restrictions against
the government of North Korea unless the President certifies to Congress that the
government of North Korea has met certain benchmarks, including releasing the 15
Japanese nationals recognized as abduction victims by the National Police Agency
(NPA) of Japan. Referred to the House Committee on Foreign Affairs on 9/25/2007.
H.Res. 121 (Honda). Expresses the sense of the House of Representatives that
the Government of Japan should formally acknowledge, apologize, and accept
historical responsibility in a clear and unequivocal manner for its Imperial Armed
Force’s coercion of young women into sexual slavery, known to the world as
“comfort women,” during its colonial and wartime occupation of Asia and the Pacific
Islands from the 1930s through the duration of World War II. Referred to the House
Committee on Foreign Affairs on 1/31/2007.
H.Res. 508 (Saxton). Recognizes the strong security alliance between the
government of Japan and the United States and expresses appreciation to Japan for
its role in enhancing stability in the Asia-Pacific region and its efforts in the global
war against terrorism. Passed/agreed to in House on 9/5/2007.
S. 1021 (Stabenow). Addresses the exchange-rate misalignment of the Japanese
yen with respect to the United States dollar, and for other purposes. Referred to
Senate Committee on Finance on 3/28/2007.
S. 1686, Sec. 6 (Landrieu). Establishes a United States-Japan Inter-
parliamentary Group to meet once per Congress with representatives of the Diet of
Japan for discussion of common problems in the interest of relations between the
United States and Japan. Placed on Senate Legislative Calendar under General
Orders on 6/25/2007.
S.Res. 399 (Brownback). Expresses the sense of the Senate that certain
benchmarks must be met before certain restrictions against the government of North
Korea are lifted, including that the government of North Korea has released or fully
accounted to the satisfaction of the government of the United States and the
government of the Republic of Korea for the whereabouts of the 15 Japanese
nationals recognized as abduction victims by the National Police Agency (NPA) of
Japan. Referred to the Committee on Foreign Relations on 12/10/2007.

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