Japan, as an issue, has entered the debate over U.S. approval of the North American Free Trade Agreement (NAFTA) in several ways. The Clinton Administration has argued that Americans should support NAFTA because if it fails to pass Congress, Japan will rush to negotiate a similar arrangement with Mexico. Proponents of NAFTA also have argued that since Japan opposes NAFTA (because of its presumed protectionism and the benefits it provides to North American businesses), it must be "good for America." Opponents of NAFTA argue that the agreement would provide opportunities for Japanese manufacturers to invest in Mexico and export unfettered to the American market. Also, they assert that NAFTA would be like previous trade agreements, particularly with Japan, that have ended up hurting the U.S. economy. In either case, the effects of NAFTA on Japan would likely be small.

Over the past 30 years, U.S. trade negotiators have pressured Japan to open its market to foreign goods and services. These outside pressures, known as gaiatsu in Japan, have been based partly on economically coercive bargaining and partly on invitation. The coercive element, which has entailed threats of retaliatory market constriction should a satisfactory resolution of the market opening dispute not be forthcoming, generally has been a necessary ingredient in obtaining concessions from Japan. The invitational component, which has included requests for U.S. pressures from Japanese interests who favor reforms, generally has facilitated Japanese concessions and made the gaiatsu process unique.