Outsiders, not to mention Ministry of Finance and Ministry of Foreign Affairs trade negotiators, assumed that this year's follow-up on implementation of the December 1996 transpacific insurance pact would be another scripted event. In their thinking, Tokyo again would be forced to defend its decision to allow the cross-market subsidiaries of Japan's big life and nonlife insurers as of January 2001 to offer policies now reserved largely for sale by foreign competitors against repeated charges by Washington that Japan had not earned the right under the transpacific accord to open up the so-called third sector to domestic newcomers that soon.
To the surprise of the Japanese experts attending the working-level consultations, held in Tokyo March 16, the White House team did not challenge the pending move. Neither did the participants from the Office of the U.S. Trade Representative and the Department of Commerce talk before or after the meeting about the options available to the Clinton administration for ensuring Japan's compliance with its commitments. They merely urged the Finance Ministry to fulfill its unmet agreement obligations, including expediting the approval of new insurance products and rates (see JEI Report No. 16B, April 23, 1999).
U.S. trade policymakers offered no clues to why they abandoned the confrontational tactics that had characterized the April 1999 talks and the go/no-go deregulation meeting in June 1998. Most likely, the White House concluded that nothing Washington said was going to stop Tokyo from ending the hold at the start of 2001 on major Japanese insurance companies selling the cancer, hospitalization, personal accident and other hybrid insurance policies that now produce much of the premium income for American and European insurers operating in Japan. Given this reality, administration officials apparently decided that whatever negotiating leverage the United States had should be used to ensure resolution of all outstanding U.S. complaints about regulation in Japan's mainstream life and property/casualty insurance markets.