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Japan TRADE AND INVESTMENT RELATIONS
Japan is engaged in trade and investment with nearly
every
country in the world. Generally speaking, however, its
greatest
economic interaction is with other developed countries,
and over
time this interaction has grown.
In 1990 about 59 percent of exports went to developed
countries, 40 percent to developing countries, and 1
percent to
communist countries. The largest single destination of
Japanese
exports was the United States, which accounted for an
extraordinary
31.5 percent of all exports. The United States was the
major growth
market for Japanese exports in the 1980s; it had accounted
for only
24 percent of the total in 1980. West Germany, Britain,
the
Republic of Korea (South Korea), and Taiwan were the next
largest
markets, at the much lower level of about 6 percent each
in 1990
(see
table 34, Appendix).
Of imports, 51 percent came from developed countries in
1990,
42 percent from developing countries, and 7 percent from
communist
countries, with the developed countries' share rising over
the
course of the 1980s as raw materials, which predominate in
developing country sales to Japan, declined in price.
Despite
Japan's dependence on foreign sources of energy and raw
materials,
the United States was the largest single source of
imports,
accounting for 22.3 percent in 1990, larger than the
combined share
(13.4 percent) for all Middle Eastern countries, the
suppliers of
much of Japan's oil. Over time, however, dependence on
United
States imports had slipped rather steadily, from 34.6
percent in
1960, as sources of supply diversified. Other major
sources of 1990
imports were South Korea (5 percent), Australia (5.3
percent),
China (5.1 percent), Indonesia (5.4 percent), Taiwan (3.6
percent),
Canada (3.6 percent), and West Germany (4.9 percent) (see
table 35,
Appendix).
Historically, Japan has had trade deficits with raw
material
suppliers and surpluses with other countries. In the
1980s,
however, balances with all trading partners shifted
somewhat in
Japan's favor. Its surplus in trade with developed
countries rose
from US$12 billion in 1980 to US$67 billion by 1988,
before
declining to under US$51 billion in 1990. And the balance
with
developing countries shifted from a deficit of US$25
billion in
1980 to a surplus of nearly US$9 billion in 1990. Its
deficit in
trade with the Middle East, peaked at about US$30 billion
in 1980,
sinking to less than US$22 billion in 1990 (see
table 36,
Appendix).
Partly because of this rapid shift toward surplus, and
because
of continued problems of access to Japanese markets, Japan
faced
increased tensions with a number of its trading partners
during the
1980s. The decade was marked by contentious negotiations
especially
with the United States. Complicating the nature of all
these
relationships was the very swift rise of Japan as a major
investor
in the domestic assets of its major trading partners.
Data as of January 1994
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