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“The Case for Trade between the United States and Japan

• John Thomas Schieffer, Former Ambassador to Japan (2005-2009), said that about 71 years after the end of the war, “It was not easy for either of us to look beyond the past to build a better future, but we did because organizations like the Japan America Society have nurtured and sustained the notion that is the long run there was more that could bring us together than drive us apart.”

• He quoted the words from former Ambassador to the U.S. Ryozo Kato that the US-Japan alliance was like a beautiful garden that required continuous tending. He spoke about the American history of its foreign policies and trade before talking about the tending of the garden.

• After its independence, the U.S. took a distance from the turmoil in Europe; however, it decided to enter WWI. The U.S. lost hundreds of thousands of young men in a single afternoon, and both France and Britain lost millions of people in a single generation. Their economies were also devastated, and the U.S. realized that repaying the massive loans the country had made to the allies would be unlikely.

• Americans grew bitter and cynical about their experience in the war and recoiled from the whole experience and returned to isolationism with a vengeance.
• The isolationism and protectionism became common, and President Herbert Hoover implemented the Smoot-Hawley Tariff that triggered trade wars around the world and complicated the already deepening great depression. By 1934, world trade was reduced by 66 % in the four years. And finally WWII occurred in 1939.

• Schieffer said that the U.S. came to a profound conclusion that the two oceans were not capable of protecting the country from the devastation of war, and that isolationism brought disastrous consequences both in the U.S. and the rest of the world.
• “If we wanted peace in the world, we would have to be a part of the world. If we wanted a new international order that promoted democracy, protected the rights of individual, believed in free markets, and supported the rule of law, we would have to lead it. For over 70 years, that has been the essence of American foreign policy,” Schiffer said.

• Keeping the policy has been not an easy task because it has required sacrifices, and every president has faced the citizen’s tough question, “Why was their sacrifice necessary to create a better world?” Schieffer said, “As they look at the world, it is so much better than it was in 1945.”

• Ambassador Schieffer said that one of the pillars of American post-war success was trade. In 1966, a surplus of imports and exports in the U.S. was less than $50 billion and grew to $4 trillion in the recent year. He quoted an old saying, “When traders cross borders, soldiers don’t.”

• The U.S. Government has supported liberalizing effective trade since the country learned lessons from the protectionism. The U.S. launched the Marshall Plan and encouraged Europe and Japan to engage in trade.
• Presently, the U.S is the largest economy in the world, and Japan is the third, and Germany is the fourth. The two countries have been recognized as the cornerstones of peace in Asia and Europe, and model citizens of the world.

• Schieffer is concerned about one thing that hasn’t changed from the end of WWII. It is stereotypes that easily demonize unfamiliar groups of people or countries. He said that it would take so much work and time.
• Many people in the U.S. say that the trade has shifted American jobs overseas. While it is true, many jobs have been lost due to emerging technologies.
• In the 1980s, Japan and the U.S. went through a difficult period in trade negotiations, and it made “Japan bashing” common in the U.S. However, 75 % of the parts of Toyota cars sold in the U.S. were made in the U.S.
• Schieffer said, “The point is Japanese companies are making parts and assembling cars in the U.S. and creating good paying American jobs.”

• Regarding free trade agreements, Schieffer said, “They are tough but in a negotiation you have to give up something to get something. Balancing trade agreements have produced far more wealth for far more people on both sides of our borders than any policy of protectionism could ever do.”
• He said that TPP (Trans Pacific Partnership) was the most important trade agreement ever proposed and expressed his concerns about the U.S. congress’s opposition. He pointed out that TPP would produce more customers for the U.S. For example, Japan will be the best customer for insurance products, pharmaceuticals, medical devices, movies, baseball broadcasts, and more products and entertainments if TPP is realized. “It also promotes a safer Pacific. Remember, when traders cross borders, soldiers don’t,” Schieffer emphasized.

• At the end of his speech, Ambassador Schieffer talked about the two nations’ leadership that requires duty and sacrifice. He said, “Together we can still lead, but we must remember the prosperity alone cannot purchase security. We must recognize that the leadership demands duty, and duty demands sacrifice. Neither of us can expect a better world if either of us walks away from our responsibilities. Duty and sacrifice can still produce peace and prosperity.”
• He mentioned that an organization like the Japan America Society of Chicago could contribute to remind Japan and the U.S. that no two nations in the world have contributed more to the peace and stability of Asia than the U.S. and Japan.

John Thomas Schieffer, Former Ambassador to Japan, speaks at the 86th annual dinner of the Japan America Society of Chicago.