As world leaders in high technology, it is not surprising that the United States and Japan occasionally have not seen eye-to-eye on the subject of protecting intellectual property rights, such as patents, copyrights and trademarks. A 1994 bilateral accord, however, was intended to address the IPR concerns of both sides and led to substantive changes in the operations of both countries' patent offices. In a July 24, 1997, speech to the Japan Commerce Association of Washington, D.C., U.S. Patent and Trademark Office Commissioner Bruce A. Lehman brought the audience of local Japanese business people up to date on bilateral intellectual property issues. While Mr. Lehman gives a positive assessment of IPR changes across the Pacific, he is chagrined that the United States has not yet lived up to the spirit of the 1994 agreement.

Gross Domestic Product Plummets
--- by Douglas Ostrom

The experts knew that Japan's second quarter gross domestic product statistics would be bad, but they had no idea the numbers would be as grim as the preliminary figures the Economic Planning Agency released September 11. According to the EPA, seasonally adjusted GDP after price adjustments plunged 11.2 percent on an annualized basis during April-June (see Table). Although analysts offered a number of plausible explanations for the figures and suggested that they did not point to a trend, the results were actually worse in some ways than they appeared to be on the surface.

	FY 1995	FY 1996	July- September 1996	October- December 1996	January- March 1997	April-June 1997
Gross Domestic Product	¥466,855.0	¥480,480.9	¥477,357.4	¥481,795.5	¥488,498.5	¥474,228.1
	(2.4%)	(2.9%)	(1.3%)	(3.8%)	(5.7%)	(-11.2%)
Consumer Spending	277,205.9	284,909.3	280,113.0	283,417.7	295,755.7	278,786.5
	(2.8%)	(2.8%)	(-0.7%)	(4.8%)	(18.6%)	(-21.0%)
Private Residential Construction	22,783.8	26,012.7	25,711.9	26,752.1	25,712.8	22,762.1
	(-6.8%)	(14.2%)	(-2.1%)	(17.2%)	(-14.7%)	(-38.6%)
Private Fixed Nonresidential Investment	74,915.5	79,734.9	79,000.1	80,771.5	81,377.9	80,165.4
	(5.7%)	(6.4%)	(8.3%)	(9.3%)	(3.0%)	(-5.8%)
Change In Business Inventories	1,472.1	548.4	842.3	407.5	37.5	1,078.5
	*	(-62.7%)	*	*	*	*
Government Current Expenditures	43,870.3	44,880.7	44,879.3	45,163.2	45,185.7	44,615.1
	(3.5%)	(2.3%)	(5.5%)	(2.6%)	(0.2%)	(-5.0%)
Government Fixed Investment	42,474.2	42,280.2	45,486.2	42,116.7	36,900.1	38,394.8
	(7.7%)	(-0.5%)	(-7.7%)	(-26.5%)	(-41.1%)	(17.2%)
Changes in Government Inventories	174.4	115.2	51.8	29.9	215.2	85.3
	(-41.2)	(-33.9%)	*	*	*	*
Net External Sector	3,958.7	1,999.5	1,272.8	3,136.9	3,313.6	8,340.4
	(-53.3%)	(-49.5%)	*	*	(24.5%)	*
Exports of Goods and Services	57,103.6	59,194.6	57,849.4	60,739.4	61,172.4	65,063.2
	(4.5%)	(3.7%)	(6.5%)	(21.5%)	(2.9%)	(28.0%)
Imports of Goods and Services	53,144.9	57,195.1	56,576.6	57,602.5	57,858.8	56,722.8
	(15.1%)	(7.5%)	(-1.1%)	(7.5%)	(1.8%)	(-7.6%)
	----	----	----	----	----	----
Gross National Product	470,931.6	486,154.1	484,145.2	487,038.4	494,356.8	479,598.9
	(2.5%)	(3.2%)	(2.9%)	(2.4%)	(6.1%)	(-11.4%)

*Cannot be calculated or meaningless.

Source: Economic Planning Agency

New Cabinet Lineup Draws Fire
--- by Barbara Wanner

Prime Minister Ryutaro Hashimoto came under fire September 11 in announcing a new cabinet lineup that appears to give credence to a view that nothing much has changed in Japan's Machiavellian political world, notwithstanding the premier's reform-committed rhetoric. The new Hashimoto team reflects the prime minister's careful distribution of ministerial posts according to seniority and faction size -- a throwback to the pre-August 1993 era, when the Liberal Democratic Party enjoyed a 38-year monopoly on power and party chieftains determined among themselves who would govern Japan. Equally significant, Mr. Hashimoto allowed intraparty rivalries to influence cabinet selection by freezing out key figures in the LDP camp that support dumping their current parliamentary allies, the leftist Social Democratic Party of Japan and the New Sakigake Party, in favor of a union with the largest opposition party, conservative Shin-shinto. Further proving the meaninglessness of Mr. Hashimoto's stated commitment to systemic change, media critics charge, the prime minister placed political concerns above principle by appointing a politician convicted of bribery to lead his comprehensive reform agenda.

Japanese Liners Docked For Port Practices, But Talks Continue
--- by Jon Choy

Despite five months of talks aimed at reforming domestic port practices, the Ministry of Transport was unable fully to close the gap between shipping companies and an association that represents stevedores and dockside warehouses. As promised, therefore, September 4 the Federal Maritime Commission began levying a $100,000 fine against the vessels of three Japanese cargo vessel operators each time one of their ships docks at a U.S. port. The Japanese have protested the FMC sanction -- the government via diplomatic channels and the shipping companies in a U.S. court -- and have redoubled their efforts to negotiate a solution. While some Japanese interests involved in the talks have threatened to retaliate for the unilateral American action, they have not yet taken such steps. Officials of the Japanese cargo liners expect the dispute to be resolved shortly, and observers do not think that this issue will harm seriously the overall Japan-U.S. relationship.

Foley Nominated As U.S.-Japan Trade Tensions Rise
--- by Eric Altbach

On August 29 the Clinton administration finally officially nominated Thomas S. Foley, former speaker of the House of Representatives, as ambassador to Japan. The nomination comes nearly nine months after Mr. Foley's predecessor, Walter Mondale, left Tokyo. Mr. Foley, a long-time Democratic representative from Washington State with a distinguished legislative record, has already come under criticism from trade hawks who argue that he is too "soft" on Japan and will not exert sufficient pressure on the wide range of trade issues that are subject to ongoing negotiations. On the positive side, despite recent tough talk on U.S.-Japan trade from Jesse Helms, the powerful chair of the Senate Foreign Relations Committee, the confirmation process does not appear to be headed for trouble. Foreign Relations Committee staff expect the nomination to go before the committee by the end of September. The American Chamber of Commerce in Japan has also come out in support of the Foley nomination.