This volume, sponsored by the National Bureau of Economic Research, is an unusually valuable contribution to the literature on the Pacific economy and U.S.-Japanese economic relations in the Pacific. It stands apart from most volumes of collected essays because the essays are of almost uniformly high quality and the contributions are from both economists and political scientists.
In a concluding chapter, Martin Feldstein, president of the NBER, summarizes his findings:
Japan has become the dominant investor and the leading supplier of development aid in the Pacific, but the overall regional trade pattern does not indicate that the Pacific is becoming a trading bloc or that Japan is playing a particularly central role in regional trade.
There is no compelling evidence that Japan is seeking to become a hegemonic power in East Asia. The costs to Japan would be too great, and relations with the United States, Japans largest market and strongest ally, would suffer. Moreover, the countries of East Asia would resist.
The U.S.-Japanese alliance has been weakened by the collapse of the Soviet Union, which makes each country strategically less dependent on the other and more likely to pursue policies that have adverse effects on the other.
The United States is not financially vulnerable to Japan but may be technologically vulnerable. The United States now depends on Japan for semi-conductors, machine tools and many of the components of aircraft and military equipment. This situation is potentially dangerous because some future Japanese government might decide to ban military exports to the United States. To eliminate or reduce this vulnerability, Washington should seek greater access to Japanese strategic technology through joint production and other arrangements.