April 17, 2015
U.S.-Japan Relations
trend. The joint response to the 2011 tsunami and
Prime Minister Shinzo Abe is scheduled to address a joint
earthquake in Japan demonstrated the interoperability of the
meeting of Congress on April 29, becoming the first
two militaries. Japan continues to pay roughly $2 billion per
Japanese leader to do so. In power since 2012, Abe is
year to defray the cost of stationing roughly 54,000 U.S.
positioned to be one of the longest-serving prime ministers
forces in Japan.
in post-war Japan. He has ambitions to achieve other
historic milestones as well. Among them are reforming
This spring the two allies are to announce a revision to their
Japan’s military, amending the U.S.-drafted post-war
Mutual Defense Guidelines (MDG), the main policy
constitution, and transforming aspects of Japan’s economy.
document defining the bilateral defense arrangement. Last
updated in 1997, the guidelines outline the division of labor
Abe led the conservative Liberal Democratic Party (LDP)
between U.S. and Japanese militaries in peacetime and in
back into power in late 2012 following a six-year period in
war. U.S. and Japanese officials say that one main objective
which six different prime ministers served. Since then, he
of the revision is to establish new guidelines for
has stabilized Japanese politics and shored up the
cooperation in domains of combat that were not addressed
foundation for long-term U.S.-Japan cooperation and
in 1997: cyber warfare, military uses of space, ballistic
planning. Globally, the two countries cooperate on scores of
missile defense, and others. Another goal is to enable a
multilateral issues, from nuclear nonproliferation to climate
more agile and “seamless” bilateral response to
change negotiations to responding to the outbreak of Ebola
contingencies that do not cross the threshold of war. The
in 2014. Abe has prioritized the alliance with the United
revised MDG may also outline new areas for U.S.-Japan
States: He increased the defense budget for the first time in
security cooperation beyond the defense of Japan,
10 years (albeit modestly) and secured approval for the
particularly in light of the Abe government’s decision in
construction of a new U.S. Marine Corps base on Okinawa.
2014 to allow Japanese forces to participate in collective
He has also led Japan into the Trans-Pacific Partnership
self-defense, meaning the defense of another country that
(TPP) free trade agreement (FTA) negotiations and has
has been attacked. The removal of the blanket prohibition
attempted to revitalize Japan’s economy, including seeking
on collective self-defense will enable Japan to engage in
a number of economic reforms favored by many interests in
more cooperative security activities, such as non-combat
the United States. Abe’s boldness in pursuing such
logistical operations and defense of distant sea lanes. The
measures has been welcomed by U.S. officials and aligns
government’s 2014 decision, however, also establishes
with the Obama Administration’s strategy of “rebalancing”
conditions for exercising collective self-defense that could
to the Asia-Pacific region.
inhibit full implementation of this new policy.
However, Japan’s relationships with South Korea and
A prominent controversy over the relocation of the Futenma
China have been problematic due in part to Abe’s handling
Marine Corps base in Okinawa has yet to be resolved,
of historical issues dating from the World War II era.
despite the Abe government’s success in securing approval
History has long colored Japan’s relationships with its
from the former Okinawan governor in late 2013. Local
neighbors, who argue that the Japanese government has
opposition to the bilateral agreement to move the facility to
neither sufficiently acknowledged nor “atoned” for Japan’s
a less congested part of the island remains strong:
occupation and belligerence in the first half of the 20th
Politicians who oppose the relocation won all major
century, with the implication that Japan’s current moves to
elections in Okinawa in late 2014. Ongoing anti-base
expand its military capabilities cannot be trusted. Abe has
protests and the opposition of the new Okinawan governor
made some statements that suggest he may ratchet back
present steep challenges to implementing the planned
previous Japanese apologies and acknowledgements of
relocation.
imperial Japan’s record. The upcoming 70th anniversary of
the end of World War II in August 2015 has heightened
Regional Relations
attention to these issues.
In recent years, Abe has forged stronger ties with Australia,
The U.S. – Japan Alliance
India, Russia, and many countries in Southeast Asia, but
relations with neighboring countries have been rocky. Abe
Since the early 2000s, the United States and Japan have
and South Korean President Park Geun-hye have not yet
taken significant strides to improve the operational
held a bilateral summit, and Abe has met Chinese President
capability of the alliance as a combined force, despite
Xi Jinping only once briefly since both took office in 2012.
political and legal constraints. The original, asymmetric
Leaders in Seoul and Beijing were outraged by Abe’s 2013
arrangement of the alliance, dominated by the U.S. security
visit to Yasukuni, a Shinto shrine established to “enshrine”
guarantee, has moved toward a more balanced security
the “souls” of Japanese soldiers who died during war,
partnership in the 21st century. Japan’s decision to engage
which includes 14 individuals convicted as Class A war
in collective self-defense (see below) may accelerate that
criminals after World War II. Seoul has criticized the Abe
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U.S.-Japan Relations
Administration’s moves that appear to downplay the
areas has been uneven, particularly on structural reforms. In
imperial Japanese government’s involvement in the
early 2015, Japan’s powerful agriculture lobby agreed to a
“comfort women” system, referring to the thousands of
significant restructuring, which many analysts interpreted
women “recruited” to provide sex to Japanese soldiers.
as a signal of Abe’s commitment to such reforms. The Abe
Critics claim that the Abe government has attempted to
Administration has also placed particular emphasis in its
change the prevailing understanding that Japan coerced the
economic growth reform agenda on encouraging the
women into sexual slavery.
participation and advancement of women in the workforce,
a policy labeled “womenomics.”
Territorial Dispute with China
The results of Abenomics to date have been mixed. Overall
Japan and China have engaged in a dispute over islets in the
economic growth has remained relatively weak, including a
East China Sea known as the Senkakus in Japan, Diaoyu in
recession in 2014, but recent data show that Japan emerged
from recession in the last quarter of 2014. Abenomics has
China, and Diaoyutai in Taiwan. The uninhabited territory,
also contributed to a 50% depreciation of the yen against
administered by Japan but also claimed by China and
the dollar since 2012, making Japanese exports more
Taiwan, has been a subject of contention for years but grew
competitive but raising the costs of imports into Japan.
increasingly heated after the Japanese government
Japan’s stock market indexes have more than doubled since
purchased three of the eight islets from a private landowner
the program began.
in 2012. Since then, China has begun regularly deploying
maritime law enforcement ships near the area, and near-
The TPP Negotiations
daily encounters between the two countries’ ships have
occasionally escalated, though not into military conflict.
Japan’s decision to join the 12-nation TPP talks in July
Although the United States does not take a position on the
2012 greatly increased the economic significance of the
sovereignty question, it is U.S. policy that the 1960 U.S.-
potential FTA but also introduced a number of challenges
into the negotiations, particularly in the areas of auto and
Japan Security Treaty covers the islets, because Article 5 of
agricultural trade. Japan is by far the largest U.S. trading
the treaty stipulates that the United States is bound to
partner in the negotiations without an existing U.S. FTA.
protect “the territories under the Administration of Japan.”
Japan’s involvement also strengthens the strategic
This commitment poses the possibility, however remote, of
importance of TPP, giving the endeavor greater clout and
U.S. engagement in a military conflict with China over the
viability. The TPP constitutes the economic cornerstone of
islets.
the Obama Administration’s “rebalance” strategy to Asia.
Economic and Trade Issues
U.S. bilateral negotiations with Japan remain a key
challenge in the overall TPP negotiations. On many non-
U.S. trade and broader economic ties with Japan remain
tariff issues, such as intellectual property rights protections,
highly important to the United States. The United States
U.S. and Japanese goals are reportedly closely aligned. In
and Japan are the world’s largest and third largest
the areas of auto and agricultural trade, however,
economies and are closely intertwined by trade in goods
disagreements remain. U.S. automakers have long argued
and services and by foreign investment. In 2014, Japan was
that a variety of non-tariff regulatory barriers impede their
the fifth largest U.S. trading partner for goods and services
access to the Japanese market. Japan meanwhile continues
exports ($115 billion) and fourth largest for imports ($168
to resist the removal of import protections for its five
billion).
“sacred” commodities—sugar, dairy, beef and pork, wheat
and barley, and rice. Some Members of Congress and
Figure 1. U.S. Trade with Selected Nations (2014)
analysts have also expressed concerns about “currency
manipulation” in the context of the proposed TPP, primarily
500
$s
focused on Japan.
n
Exports
Imports
illio 400
B
Additional Information
For more, see CRS Report RL33436, Japan-U.S. Relations:
300
Issues for Congress. Also see CRS Report RL33740, The
U.S.-Japan Alliance; CRS Report R42645, The U.S.
200
Military Presence in Okinawa and the Futenma Base
Controversy; and CRS Report R42694, The Trans-Pacific
100
Partnership (TPP) Negotiations and Issues for Congress.
0
Emma Chanlett-Avery, Coordinator,
China
Japan
South Korea
Canada
Mexico

echanlettavery@crs.loc.gov, 7-7748
Source: U.S. Census Bureau, FT-900, exhibit 20.
Mark E. Manyin, mmanyin@crs.loc.gov, 7-7653
Ian E. Rinehart, irinehart@crs.loc.gov, 7-0345
In an effort to reverse nearly two decades of Japanese
Rebecca M. Nelson, rnelson@crs.loc.gov, 7-6819
economic stagnation, including chronic deflation and low
growth, Abe has promoted a three-pronged economic
Brock R. Williams, bwilliams@crs.loc.gov, 7-1157
program, nicknamed “Abenomics,” that includes monetary

stimulus, fiscal stimulus, and structural economic reforms.
IF10199
Many economists agree that progress across these three
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