This is a guest opinion column
Within the past week U.S. President Donald Trump and Japan’s newly-minted Prime Minister, Sakae Takaichi, finalized agreements between the two countries relating to both economics and security. Cooperation, mutual pledges, and investment frameworks ranged across sectors, from biotechnology, to shipbuilding, to space exploration. Both countries’ leaders claimed that these agreements would usher in a new “Golden Age” for U.S.-Japan relations. While such high hopes will take years to come to fruition, if they do at all, exploring the countries’ shared post-war history, and considering how Alabama fits into that history, will inform all who root for our shared prosperity with Japan and her people.
Following WWII, the United States and Japan transitioned rapidly from enemies to allies. Over the past 80 years the countries have navigated tense bilateral waters, including the 1980s “Trade Wars,” where many Americans accused Japan of “dumping” – exporting underpriced goods to the U.S., especially cars – putting market share over profits. However, U.S.-Japan relations also have been helpful and heartwarming at times: The March 2011 earthquake and tsunami along Japan’s northeast coast, which left a wake of destruction and death (an estimated 20,000 Japanese perished; the exact death toll will never be known), saw the U.S. respond with Operation Tomodachi (“Friend‚” in Japanese). Operation Tomodachi put the U.S. Seventh Fleet and other Japan-based U.S. armed forces personnel at Japan’s disposal to provide evacuations, humanitarian assistance and other disaster relief up and down Japan’s east coast. Four weeks later, after the April 27, 2011, north Alabama tornado outbreak, residents of Alabama’s Japanese Sister Cities, including Narashino, Hitachi and Maebashi, raised and sent both funds and heartfelt wishes to hard hit areas during Alabama’s recovery.
The United States ended its post-war occupation of Japan in 1953. During the Cold War, U.S. security concerns involving Japan far exceeded economic issues. In the 1950s the U.S. saw Japan less as a trading partner than as a bulwark against communism in East Asia. The 1959 revised U.S.-Japan Security Treaty led to large, emotionally-charged protests in Japan, even prompting President Eisenhower to cancel his visit to Japan in June 1960. With President Kennedy’s appointment of the esteemed – and in Japan, beloved – Ambassador Edwin Reischower (who was born in Japan and spoke Japanese), most tension abated until the early 1970s. Then came the Nixon Shocks (in Japanese: Nixon Shokku).
Throughout the 1950s and 1960s the U.S. demanded Japan turn a cold diplomatic shoulder to Communist China. Japan obliged. Then, in July 1971, President Nixon announced he would visit China the following year. The U.S. gave Japan no advance warning of this diplomatic earthquake. The next month, again with no warning, Nixon announced the devaluation of the dollar to help staunch the flow of cheap imports (especially textiles) and attack a growing U.S. trade deficit. Again caught flat-footed, Japan’s decision makers increasingly saw the U.S. as an untrustworthy partner.
The next 20 years saw Japan’s economy boom. By the late 1970s, Americans’ love of imported, fuel-efficient, Japanese cars contributed to Chrysler’s near-bankruptcy (and a $1.5 Billion U.S. government bailout). The 1980s saw Japan’s Bubble Economy put the U.S. on its back foot. In 1984 the Nikkei stock exchange hit 18,000 – an annual 40% growth rate. Land prices exploded. It was wildly rumored that if put up for sale, the market value of the Imperial Palace grounds, in the heart of Tokyo, would equal … Canada. In 1986 accords between the U.S. and Japan corrected some imbalances by raising the Yen’s value against the Dollar and addressed, if not eliminated, some non-tariff barriers. Increasingly, Japanese, along with other countries’, manufacturers became incentivized to invest in and open operations in the United States.
In 1991 the Japan, Inc.’s bubble began to burst. Over-leveraged companies were hit hard, deflation reigned, both economic and population growth began to stagnate, and the “Lost Economic Decades” began. Still, Japan has not been without amazing social and technological success. Famed high-speed rail systems, vibrant cities, world-class health care and high literacy rates are a few of Japan’s proud hallmarks. But economic stagnation, an aging population and immigration issues keep Japanese leaders up at night. For Alabama these challenges bring opportunities: Japanese companies continue hedging their bets overseas and investing in Japan remains a solid bet.
The Alabama Department of Commerce estimates that since 1999 Japanese companies have invested more than $10.1 billion and created more than 25,000 jobs in Alabama. As the U.S. President and Japan’s Prime Minister met last week, Alabama announced the opening of a Tokyo-based office to encourage additional Japanese investment in the state. In November Japan’s Ambassador to the United States, His Excellency Shigeo Yamada, will visit Alabama to join the Japan-America Society of Alabama’s celebration of 47 years promoting economic development and cultural and educational exchange.
As part of a newly-touted “Golden Era,” perhaps Alabama can invest more in Japan. While always welcoming large plant expansions, Alabama should also foster smaller, more entrepreneurial enterprises between Alabama and Japan. In this way, Alabama can build on an assuredly interesting past and deepen and broaden its relations to catalyze an even greater, more dynamic, future with Japan.
Richard Newton is a 1985 graduate of the University of Alabama’s New College and a 1990 graduate of the University of Alabama School of Law. He has twice lived in Japan, both as a student in Osaka and, later, as teacher in Hyogo Prefecture, and frequently travels to Japan on business. He has represented various Japanese companies in Alabama and assisted U.S. companies in Japan. He is a member of the Japan-America Society of Alabama Board of Directors and a member of the American Chamber of Commerce in Japan. He practices law in Madison County, Alabama.
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