For the past half-century, the management of relations with the United States has been the primary challenge for both Japan and Canada in their foreign, and at times even domestic, affairs. But during the past decade, America’s relationship with its two major Pacific partners has become a central question for the United States, and the entire international community as well. The end of the Soviet Union and the Cold War, the consequent shift of attention to economic and social issues in an age of intense globalization, and the rise of Japan and Canada alongside the United States as major powers...

No unilateral U.S. policy has caused as fundamental a shift in the international political economy as the so-called Nixon Shokku (Shocks) of 15 August 1971.¹ By forcibly suspending the U.S. dollar’s convertibility to gold and imposing a 10 per cent surcharge on all dutiable goods coming into the United States, the Nixon regime precipitated conflict with its close allies. It also destroyed the Bretton Woods international monetary system. Canada and Japan, the United States’ largest and second-largest trading partners, were particularly damaged. Both took steps to counteract the Shocks. The outcomes of Ottawa’s and Tokyo’s policies, however, were divergent: in...

This chapter compares Japanese and Canadian experiences in coping with, and influencing, U.S. macroeconomic diplomacy. U.S.-Japan relations underwent intensive negotiations on macroeconomic issues particularly, if not exclusively, during the decade of 1977-87 (hereafter referred to as the 1980s). Although Washington and Ottawa were occupied with the Free Trade Agreement during the 1980s, they had to settle their disagreements on U.S. balance of payments measures during the 1960s. In the past, each dyad has been studied separately. By analysing this set of dyads together, this chapter attempts to deepen understanding of the complex political economy of macroeconomic relations in the two...

Bilateral political bargaining is deeply embedded in the everyday fabric of Japanese-American economic relations. As transnational relations have proliferated and mutual economic dependence has deepened, and as the manifold benefits of commercial ties across the Pacific have spread across both national economies, the political forays by politicians and bureaucratic officials into the heartland of economic activity have also expanded dramatically. At times it seems that almost any aspect of domestic and cross-border commercial life can become the object of petty haggling. While considered to be a mode of joint deliberation and decision making of last resort, the least efficient and...

A significant characteristic of Japanese-Canadian relations over the last fifteen years or so has been the steady rise of a Japanese business presence in Canada. As Japanese firms began to invest overseas in earnest following the yen revaluation (endaka) in 1985-86, the number of Japanese companies operating in Canada grew rapidly. This growth in direct foreign investment (DFI) and corporate start-ups represented a ‘new wave’ of Japanese business activity.¹ It involved not only higher amounts of investments by value, but also increasingly sophisticated forms of Japanese involvement.² The recent wave of DFI ended dramatically with the bursting of the Japanese...

In the late 1980s, Japan’s economy soared to unprecedented heights in terms of Gross National Product (GNP), market share, and asset prices. During this period, Japan became rightly viewed as the world’s money machine, exporting on average more than $100 billion of long-term capital per year from 1985 to 1989. Both the United States and Canada became increasingly reliant on inflows of Japanese capital. For Canadians, the flow was especially critical: by 1991 Japanese investors held 25 per cent of all foreign-held Canadian bonds, up from less than 2 per cent a decade earlier, and Japan ranked third, after the...

The growing interdependence of the economies of the North Pacific Triangle has contributed to the surge in collaborative agreements between economic entities from the United States, Japan, and Canada. Collaborative agreements have been made, for example, in licensing, joint ventures, co-production, joint research and development, and co-marketing. The successful negotiation of the terms and conditions for their establishment is a necessary requisite to the formation of such agreements. Even after the successful formation of such collaborative agreements, there is a continuing need for the partners to negotiate on issues and conflicts that may arise over the life of the cooperative...

In the nineties, Canada was one of the first Pacific states to urge ‘cooperative security’ whereby both defenders and potential challengers to Asia Pacific regional peace would meet regularly to consult on security issues.¹ Together with Australia, it strove to persuade a reluctant United States and Japan to join in such a multilateral security approach. The early nineties seemed a good time for this: Australia had already inaugurated the first regional multilateral governmental economic grouping, the Asia Pacific Economic Cooperation forum, in 1989. The nineties also ushered in a new era of comparatively good relations among the major powers due...

It has been suggested that there are three important processes at work in U.S.-Japanese-Canadian relations in the 1990s: a trilateralization of economic interactions, a broadening of the trilateral agenda to include regional and global security issues, and increasing collaboration in multilateral institution building. As a result of these processes, Japan and Canada no longer resemble spokes on a wheel with an American hub, as they did in the heyday of the Cold War. Increasingly they deal with each other – and with the United States – if not as perfect equals, at least as partners with a deeper appreciation for...

With the end of the Cold War and the outbreak of the Gulf War, the issue of Japan’s role in the international community and of Japan’s contribution to international peace and security became the focus of a debate within Japan over sending national military forces abroad. Japan did take a historic step by sending its Self-Defence Forces (SDF) to Cambodia to serve as part of the United Nations peacekeeping operations in that country. However, UN peacekeeping has a history of more than forty years, with many states, such as Canada, participating since the inception.

In the Cold War era, the...

Environmental issues highlight the new forms of relations emerging among North Pacific partners.¹ Traditionally, environmental issues were largely a function of domestic considerations and local politics. However, in the 1980s they emerged as high-priority items on the international agenda. This environmental agenda provided a contrast to the prevailing economic and security agendas of earlier international politics. It was not dictated exclusively by a global power such as the United States, but provided an opportunity for smaller countries such as Canada to promote issues such as ozone depletion, acid precipitation, habitat protection, and development assistance. Japan also responded to selected environmental...

It is fair to ask why the question of managing relations between Canada and Japan arises at all. Both countries are free societies with democratic institutions and market economies. Both are members of the small group of advanced industrial economies in the Group of Seven (G-7). Normally the web of connections between countries of this kind is complex. The relationship is shaped by thousands of autonomous decisions, taken by thousands of people. Governments can set national objectives for the development of relations. They can try to create frameworks within which they want parts of the relationship to be conducted. They...

The legitimation imperative – the need for governments to explain and justify policy to their various constituencies, to engage élites and attentive publics – marks the conduct of foreign policy in open societies. It puts a premium on communication skills and explains the growth of government investment in the apparatus of communication, for if governments cannot explain and justify policy adequately, others will attempt to do it for them, demonstrating official incompetence. That foreign policy must contribute to government credibility and popularity while serving national unity as well as the national interest is an axiom for all governments of whatever...

In August 1994, Malaysian Prime Minister Dr Mahathir bin Mohamad declared that there was no need for Japan to apologize for its actions during World War II.¹ Central though it might be to any attempt to encourage Japan to play a greater role in Asia, this claim is also significant because of the implicit suggestion that it would be acceptable to ignore part of the past when looking towards the future of institution building in Asia Pacific. An assessment of the diplomatic strategies used by Japan and Canada in their respective current approaches to regional cooperation and institution building challenges...

Since the 1975 creation of the annual Seven-Power Summit, both Japan and Canada have shared a strong interest in having it and its associated institutions develop as the primary instrument through which to pursue their foreign policy priorities and to shape international order. The Summit gives both Japan and Canada a unique opportunity to act as equal, influential ‘principal powers’ in an informal, adaptable, and at times highly effective club that collectively controls a commanding share of economic and other capabilities in the international system.¹ In sharp contrast to the security and political institutions of the United Nations and Atlantic...