NO. 9 -- March 7, 1997


Feature Article


As a consequence of the prolonged recession of the early 1990s and the rapidly rising level of international competition, the Japanese public and corporate executives alike are questioning many traditional aspects of government, business and society. The structure, functions and cost of government have attracted particular attention under the heading of administrative reform. The national debate on how to transform the government is gaining momentum, fueled by the release of initiatives drafted by groups both inside and outside the public sector. Given the current organization and operation of the government, however, the chances of rapid and drastic reforms are low. When deregulation and reform are the topics, Japan will pursue changes in a way that reflects its values and mores, not those of the United States.

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Weekly Review

Restrictions On Holding Companies To Be Relaxed
--- by Douglas Ostrom

Students of postwar Japan long have noted the importance of Article 9 in two of that country's American occupation-influenced documents. The better known, Article 9 of the constitution, renounces the use of force as a means of settling international disputes. Linked to this provision in some people's minds is Article 9 of the 1947 Antimonopoly Law, sometimes referred to as Japan's economic constitution. This stipulation prohibits holding companies. Over the years government officials and business leaders have interpreted both articles in ways that arguably have softened the impact of the original wording. The announcement February 25 that the ruling Liberal Democratic Party and its two legislative allies, the Social Democratic Party of Japan and the New Sakigake Party, had reached an agreement to scrap Article 9 of the Antimonopoly Law was highly symbolic.


Ozawa Survives Leadership Challenge Despite Scandal, Looming Breakup by Barbara Wanner

Living up to his reputation as one of Japan's most savvy political operators, Shinshinto chief Ichiro Ozawa successfully fended off calls for his resignation at a February 26 party meeting. At the same time the largest opposition group finds itself mired in a scandal that all but destroys its image as a champion of political reform. The February 19 indictment of upper house member Tatsuo Tomobe on charges of massive fraud and related suspicions of wrongdoing by Shinshinto leaders in selecting Mr. Tomobe to run on the party's ticket in the 1995 upper house polls rocked the party, prompting a small group of younger members to demand Mr. Ozawa's resignation.


Divisions Sharpening In Fast-Track Debate by Christopher B. Johnstone

Although the 105th Congress is only two months old, the prospects for renewing the president's "fast-track" trade negotiating authority in the near term already may be fading. President Clinton continues to offer rhetorical support for fast track, and White House trade officials have suggested that they will submit a detailed proposal to Congress as early as this month. Nevertheless, a crowded congressional calendar and the impending constraints of the next election cycle dictate that action on the measure must come soon, perhaps before summer, if it is to have any hope of passage during the current legislative session.


Washington Lowers Boom On Japanese Port Practices by Jon Choy

Targeting the operational practices of Japanese ports -- which underlie the high cost of docking in Japan -- the Federal Maritime Commission announced February 26 that, beginning April 14, it would penalize the vessels of three Japanese shipping companies when they land at U.S. ports unless current procedures are improved. American shipping companies praised the FMC decision, hoping that it will lead to long-sought reforms. The FMC's action caps an extended investigative and negotiating process that involves the Ministry of Transport and the Japan Harbor Transportation Association, which represents stevedore and transport companies.



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