This report discusses the summit held by President Bill Clinton and other leaders of the Asia Pacific Economic Cooperation (APEC) on November 19, 1995. The report discusses the primary reason for the summit, an Action Agenda intended to lead to free and open trade and investment among its members. The report also discusses how APEC countries were divided on certain issues going into this summit.

Japanese officials interviewed for this project in May-early June 1993 were generally sanguine about relations with the United States at the start of the Clinton Administration, but the Administrations's strong emphasis on U.S.- Japan trade issues in recent months deepened their pessimism over the near term prospects of U.S.-Japan relations. They were uncertain whether U.S.- Japanese talks on trade issues prior to the Clinton-Miyazawa summit of July 1993 would reflect a basic change in U.S. trade policy that in term would alter their generally pessimistic outlook.

Japan,s rise as a leading economic power has been attributed to many factors. Increasingly, attention has focused on Japan,s ability to apply innovative technologies to develop new products. Technology development and applications are at the core of a system in which the government and the private sector facilitate industrial policies and practices. Japanese research and development efforts increasingly stress what one Japanese policymaker calls the "fusion" solution, or combining advances in different technologies to generate new products and innovations.

This report examines: (1) the definition(s) of managed trade, (2) the underlying economic arguments for and against such policies, (3) past U.S. experiences with managed trade, (4) perceptions that Japan is somehow "different" from other trading nations and warrants a distinctive approach to resolving trade disputes, (5) the implications of the Administration's current results oriented approach to U.S.-Japan trade issues, and (6) alternative proposals offered in Congress to resolve trade disputes with Japan.

Front: Text describes action on various war fronts : France, eastern front, Marianas, Bonins, Southeast Asia, Southwest Pacific, Italy Maps: Southwest Pacific; France. Insets: Far east; France. Photographs: [Soldier voting policy]; Burma road in China. Back: Silence means security.

Front: Victory in Europe--map overlays photograph of military prisoners ; map of Japan and Japanese-held areas includes text pointer giving current and projected troop strength of Japanese military forces. Back: [text and ill.]: This is why we fight-- [Concentration camp victims]./ Photo on back: Pfc. James L. Watkins, Oakland, Cal., 106th Inf. Div is examined by Army personnel after rescue.

Front: The text highlights the methods by which Japan adopted democractic principals after the war ended. Map: a typical Japanese village on Echigo Plain. Photographs: Images of Hirohito dressed in royal robes and Western style clothing Back: The 1946 calendar. Phrase: Soldiers' deposits pay 4% interest : see your personnel officer.

Front: Text describes action on various war fronts: USSR, Italy, Marshall Is., Southwest Pacific, Paramushiru, Air offensive. Inset maps: [South Pacific], [Kwajalein], [Soviet border from Sept. 1, 1939 to Nov. 5, 1943]. Includes photographs: Captured Japanese light tank, Mt. Trocchio, Nettuno beachhead, British anti-tank gun. Back: Central Italy. Map with inset of oblique view showing difficult terrain.

Front: Text describes action on various war fronts: Plans, Russia, Italy, Far East, Southwest Pacific, Argentina. Maps: The Eastern Front; large world map shows United Nations, Axis and Axis occupied areas, countries with Axis relations broken, and neutral countries. Photographs: Gangway, I'm a choo choo train [Army jeep pulls a freight car] -- Member of Chinese Expeditionary Force trains at a U.S. Army base in India -- Soldiers move material into place to build a bridge -- Chinese soldier simultaneously receives immunization shots in both arms. Back: The Making of a U.S. Bluejacket. Text and 25 photographs illustrate the training of the Naval personnel.

Japan and the United States are the two largest economic powers. Together they account for over 30% of world domestic product, for a significant portion of international trade in goods and services, and for a major portion of international investment. This economic clout makes the United States and Japan potentially powerful actors in the world economy. Economic conditions in the United States and Japan have a significant impact on the rest of the world. Furthermore, the U.S.-Japan bilateral economic relationship can influence economic conditions in other countries. More generally, other issues regarding U.S.-Japan economic relations may emerge on the agenda of the 112th Congress. U.S. and Japanese leaders have several options on how to manage their relationship, including stronger reliance on the World Trade Organization; special bilateral negotiating frameworks and agreements; or a free trade agreement.

This report provides background information on the U.S.-Japan alliance and discusses the politics of U.S. basing in Okinawa.