No. 34 — September 1, 2000

Feature Article

CHANGES IN JAPANESE REPRESENTATION IN WASHINGTON
REFLECT EVOLUTION OF BILATERAL TIES

A Roundtable Discussion

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Summary

About 20 years ago, the U.S. subsidiaries of major Japanese companies began in increasing numbers to establish offices in Washington, D.C. to monitor, analyze and report on developments in Congress and in the executive branch relevant to their interests. There certainly was much to cover. Japan was emerging as a global economic powerhouse, and its trade surplus with the United States was rising sharply. Moreover, Japanese manufacturers across a broad spectrum of industries seemed to be outcompeting American firms on their own turf. Congress responded in the 1980s with a spate of legislation aimed at protecting U.S. markets and safeguarding the jobs of American workers while prying open foreign markets. This drive culminated in the Omnibus Trade and Competitiveness Act of 1988.

For its part, the executive branch launched a full-scale assault on Japan's market access barriers as well as on its alleged unfair trade practices. Washington conducted two series of in-depth negotiations with Tokyo on structural impediments to imports and investment during the 1980s and also held talks on any number of product-specific issues. Moreover, it initiated in response to industry complaints a rash of antidumping investigations and proceedings under other U.S. trade statutes. Limits were imposed early in the 1980s on Japan's U.S.-bound car exports and, in the middle of the decade, an equally controversial semiconductor trade agreement was forged.

Transpacific trade disputes were not the only hot Japan topics in the halls of Congress and in administration offices farther down Pennsylvania Avenue during the 1980s. Late in that period, the "buying of America" by corporate Japan became the subject of headlines as well. Washington representatives of Japanese companies consequently had their hands full trying to stay abreast of fast-changing developments and, at the same time, working to ensure that their firms were not unduly penalized or otherwise shut out of American markets.

At the start of the new millennium, Japanese firms in America face a different set of challenges. The drumbeat of anti-Japan criticism on Capitol Hill has quieted due largely to the economic role reversal of the two countries; Japan has battled recession for the past decade, while the United States has enjoyed a bull economy. The deep-seated perception of Japan as both an unfair trader and a closed market persists, however, and tempers in Washington could flare quickly if the U.S. economy begins to slow. But important changes have occurred that will make it difficult for administration policymakers to resort to 1980s-style protectionist remedies. Perhaps most significantly, many Japanese firms have substantial manufacturing operations in the United States that collectively employ hundreds of thousands of Americans and procure huge volumes of U.S.-supplied goods and services.

The fact that the U.S. subsidiaries of numerous Japanese companies are integral parts of the American economy has dramatically altered both the nature and the agenda of corporate Japan's activities in Washington. The boom in information technology also has revolutionized how representational offices operate as well as broadened their policy portfolios.

In a recent roundtable discussion, the highly respected Washington representatives of three Japanese companies and an industry trade group — Lawrence Bruser of Mitsui & Co. (U.S.A.), Inc., Michael Call of Mitsubishi International Corp. and David Olive of Fujitsu, Ltd., plus Paul Ryan of the Association of International Automobile Manufacturers, Inc. — discussed with JEI Senior Political Analyst Barbara Wanner the evolution of U.S.-Japan economic relations over the past two decades. The resulting changes, as the participants concur, have affected business decisions, policy agendas and how they represent their firms in Washington.

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Roundtable Discussion

Ms. Wanner: How has Washington's perception of Japan as a trading partner changed over the past decade or so? In the 1980s, Japan was the target of abundant protectionist legislation on Capitol Hill. One heard considerable rhetoric that tagged Japan as the "Evil Empire" aiming to undermine certain U.S. industries. How have American policymakers' views changed since then, if at all?

Mr. Bruser: They have changed in some ways but not in others. To a considerable extent, the fundamental perception in Congress and in the executive branch — correctly or incorrectly — still is that Japan pursues unfair trade practices and is slow to deregulate certain industries at home.

But right now, Japan is viewed as much less a threat, primarily because its economy is so weak. Moreover, this country is king of the hill again, so to speak. The U.S. economy is so strong that it easily can absorb the $61.2 billion trade surplus that Japan had with this country in 1999. However, given the size of the trade imbalance, Japan once again may be perceived as a threat if the U.S. economy goes into recession.

Overall, though, Washington's appreciation of Japan as an ally has improved in the past decade because of growing concerns about the People's Republic of China and North Korea. The importance of the U.S.-Japan alliance to regional stability is widely recognized.

Mr. Ryan: I agree with Larry. But I think it is important to note that increased Japanese investment in the United States over the last 10 years also has created a bit of confusion in policymakers' minds about the extent to which our trading partner is a threat to our interests.

In reality, this investment has generated considerable tax revenues for both the state and federal governments as well as provided jobs for American workers. These undeniable benefits directly challenge the still broadly held perception that Japan is an unfair trader, which, at times, leaves legislators at all levels feeling somewhat conflicted and confused.

Mr. Call: Even though U.S. government officials may acknowledge the substantial contribution of Japanese investment to this nation's economy, they remain reluctant to give Tokyo the benefit of the doubt. I have sensed over the years a deterioration in attitudes, a pervasive negativism concerning Japan's trade and other economic policies.

Mr. Olive: To the extent that an undercurrent of pessimism still exists, I think that it comes from a lack of experience in certain quarters. With Japan, there can be no quick fixes or easy decisions. The negotiating process on any issue will be time-consuming. It is my impression, though, that the core group of executive branch officials and the selected members of Congress who have dealt with Japan for the past decade have learned this and, as a result, have more realistic expectations about what can and cannot be achieved.

Another important development is the apparently improved balance in the U.S.-Japan relationship. Ten to 15 years ago, Washington put more weight on the political and security sides of the relationship. The Clinton administration may have overcompensated by focusing almost entirely on economic relations. Now, however, Congress and the administration have sought to establish a better balance between Japan's role as a political and security ally and its position as a trading partner.

Mr. Call: And, the end of the Cold War certainly adjusted that balance.

Mr. Ryan: But Larry's point about why Japan is not perceived as a threat is an important one. The new balance has not been tested by an economic downturn in the United States. So how far we have really traveled in developing a comprehensive view of Japan is open to question.

Mr. Olive: Absolutely. The perception of the U.S.-Japan relationship will be influenced by overall political or economic conditions. The past few years have been without the domestic economic problems or the external political factors that have caused undue frictions in our trading relationship in the past.

Mr. Call: But U.S.-Japan relations have not been free of tension. The current dispute concerning alleged dumping in the U.S. market by Japanese steelmakers has given us a foretaste of what might happen with an economic downturn in the United States. Any time you mention Japanese steel imports, tensions invariably flare.

Mr. Bruser: The administration's late July report on steel [Global Steel Trade: Structural Problems and Future Solutions] seems to indicate that the perceptions of Japanese trading practices in that industry are almost identical to what they were 20 years ago. Specifically, the report cites collusion among manufacturers, fixing of market shares, barriers to imports and dumping in the U.S. market.

The Japanese government, for its part, complains about U.S. implementation of its antidumping laws. The nature of trade-related frictions has not changed in 20 years. Similar tensions are apparent in the U.S. drive to improve foreign access to Japan's flat glass, automotive parts, construction and communications markets. It is remarkable.

If 15 or 20 years ago, you had suggested to any of us that bilateral trade relations would be as relatively placid as they are now with Japan's $60 billion-plus trade surplus, we would have been shocked into disbelief. As I said earlier, given the continuing perception that Japan engages in unfair trading practices, there could be a renewal of serious tensions in bilateral relations if the United States slips into recession.

Mr. Call: Yes, the anti-Japan drumbeat continues on Capitol Hill, but it is quieter than before. If you look at some of the recent pronouncements by Sen. Max Baucus (D, Mont.) concerning the steel dispute and at the legislation introduced by Sen. Ernest Hollings (D, S.C.) that focuses on investment in U.S. communications firms by government-affiliated foreign companies, it becomes clear that there is an agenda for dealing with Japanese trade and other economic issues.

Mr. Ryan: Yes, the drumbeat is there, but politically, the timing is not right. With a booming U.S. economy and record-low unemployment, it has been difficult for Japan critics to find a vein of discontent to tap.

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Ms. Wanner: Moving to the Japanese point of view, how has the understanding of corporate headquarters about the functions of Washington representation changed in the past 10 to 15 years? Back in the early 1980s, some executives in the home office seemed to have difficulty seeing why a Washington-based government relations presence was necessary and important.

Mr. Bruser: It was never difficult to sell Mitsui U.S.A.'s parent on the need for a Washington office. We opened our office here exactly 20 years ago, and headquarters was enthusiastically behind it for various reasons. For one thing, top management recognized that problems in U.S.-Japan trade relations were beginning to mushroom, which potentially could threaten business.

Mitsui executives and staff were very active on the public affairs front, analyzing policy, promoting the legislation that eventually became the Export Trading Company Act of 1982 and generally providing information to both Congress and the administration about the firm's record as a major exporter of American products. The intent was to give Mitsui a positive identity. Corporate headquarters also realized that certain areas of business — for example, World Bank-related projects — could be supported through a Washington presence.

Mr. Call: I would agree. We never have had a problem selling the Washington office's activities to Mitsubishi in Tokyo or New York. Our office generally has been regarded as an important source of information about the competitive environment.

Mr. Olive: Fujitsu opened its Washington office in 1990, so it may be relatively newer to Washington than some of the other companies. Initially, there may have been some concern in Tokyo about the exact role and mission of the Washington office. But over time, it has come to be regarded by the Japanese management as an important source of information on business and economic developments.

Educating and enlightening headquarters about the Washington office is an ongoing process, though, since executives change, business strategies are revised, the focus shifts and so forth. It is up to the staff in the Washington office to adjust to those changes. But the basic representational functions — serving as a direct source of information and analysis on economic and business trends and policy developments and as a link to government officials and Congress — are viewed as very important by Fujitsu management.

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Ms. Wanner: How has the information technology revolution — encompassing everything from the widespread use of e-mail to the boom in electronic commerce — affected your policy agenda and the nature of your representational activities?

Mr. Bruser: I first noticed the dramatic impact of the IT revolution when I visited Tokyo in early 1991. I had worked in Mitsui's Tokyo headquarters for two years during the 1980s. So when I returned in 1991, six or seven years had passed, and the changes were more evident.

As you may recall, the Persian Gulf War had just begun. The television in the research area where I worked stayed tuned to CNN [Cable News Network]. So there I was, watching the Gulf War live, in real time, just as you were watching it here in Washington. That experience made me realize instantly that the work we were doing in the Washington office was going to have to change.

We no longer would provide value to the company simply by reporting breaking news. From that point on, it was incumbent on the Washington office to get beyond raw information and provide more interpretation, more analysis and more in-depth explanations of why things were happening. That was a big change.

Mr. Call: That is absolutely right. The Internet has profoundly changed the way we do business. Mitsubishi managers in Tokyo now can get their own copies of legislation, they can check the status of a bill, they can follow committee hearings — they can do so much more of what we used to do and, to some extent, still do for them.

As Larry said, our challenge now is to create value-added by providing explanations that are not available on the Internet. We go beyond the language of the legislation to analyze its significance, perhaps pointing to the possible development of another bill that no one else knows about yet. Such insights cannot be captured from the Internet.

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Ms. Wanner: That, it seems to me, requires good old-fashioned Washington networking skills.

Mr. Call: Absolutely. Also important, e-mail has facilitated a lot of internal communication by breaking down some of the barriers to communication between offices and among staff. Now, there is a lot more lateral and diagonal exchange rather than strictly vertical communication. I think that these patterns enhance the value of information immeasurably by getting it quickly to the right place in the company where it can be used most effectively.

Mr. Olive: Fujitsu is one of the leading IT companies, so the IT boom has not altered the firm's activities so much as it has greatly expanded them. A decade ago, IT was viewed as a relatively new, emerging business, different from the traditional electronics industry. Today, the IT industry is global.

With the Internet age and the increasingly networked nature of business, there is greater cooperation in the policy area and more collaboration and partnering among IT companies. A firm like Fujitsu is an important player on the global business scene.

Fujitsu has had a presence in Silicon Valley for more than 25 years and has been part of the Internet and information revolutions, providing hardware, software and services that enable Internet use. So the IT boom has helped Fujitsu to become more integrated with American and other firms. That has been very positive.

In addition, information technology has affected all sorts of industries — trading companies, automotive makers and other traditional manufacturers — and has transformed commerce as well. Perhaps most significantly, it has made business more global. To be competitive, a company cannot limit its search for suppliers or customers to those within its own shores. Internet technology can be used to build and expand important domestic and international business opportunities.

Mr. Bruser: I could not agree more with David's last point. For Mitsui, the IT revolution has focused the attention of the entire company — especially top management — on the development of the so-called New Economy in the United States and how the blossoming of the IT sector has enabled America to regain world economic leadership from Japan. The economic positions of the two countries have totally reversed from what they were 10 to 15 years ago.

Mitsui's Washington office, in particular, is under much more pressure from headquarters to stay abreast of developments in the American IT industry as well as to closely follow economic trends in this country. We are spending a lot more time on those issues and much less on the old trade disputes we discussed earlier.

Mr. Ryan: The situation is the same in the automotive industry. The Internet has the potential to profoundly change the way that automobiles are marketed and sold. This is a huge issue for manufacturers and dealers since quite a few long-standing business practices may be dramatically altered by the new technology.

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Ms. Wanner: All of the major Japanese automotive companies have a manufacturing presence in the United States. How has that changed the way they approach representation in Washington or altered the agenda of issues of interest to them?

Mr. Ryan: Their construction of domestic plants has changed representation in fundamental ways. Japanese auto companies do not see themselves as guests in the United States. They see themselves as constituents, and they now are more sophisticated about the political process. I would even say that their long-standing experience with Washington offices has made them more comfortable with the representational process.

The fact that Japanese auto companies generate significant employment in several states means that they have domestic interests that their Washington offices, in large part, are organized to protect. So the biggest change has been that of perception. Japanese auto companies no longer consider themselves passive observers of the political scene in Washington but active players in the policymaking process. They have come down from the stands, so to speak, and have moved on to the playing field to take part in developing policy that affects their industry.

Mr. Olive: The development of business-to-business electronic procurement — that is, using the Internet to obtain automotive parts and components — is an interesting example of a new way of doing business.

Mr. Ryan: I did not mention e-procurement because it is not altogether clear how it will evolve. Certainly, some companies have begun to seriously explore its potential. As with the actual selling of cars on the Internet, e-procurement may significantly change traditional practices as well as the organization of the supplier community.

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Ms. Wanner: Larry mentioned earlier that Mitsui and other trading companies played a role back in the 1980s in facilitating congressional action on the Export Trading Company Act and other initiatives that would help boost exports of U.S. goods by these firms. However, my understanding is that Japanese trading companies do not simply move goods from Point A to Point B but are highly diverse companies. Is that correct?

Mr. Call: Yes, and they always have been very diverse. The common perception is that trading companies move goods — they export and import. But when I talk to people about what Mitsubishi does, I always stress that the firm is heavily involved in all kinds of projects and investment opportunities.

The extent to which those nontrading projects represent a significant part of our business is not commonly understood. For example, both Mitsubishi and Mitsui trade steel over the Internet and are considering other kinds of e-commerce opportunities. The role of trading companies always has been multifaceted, but it is continuing to change and is becoming even more diverse as technology changes.

Mr. Bruser: I would agree with that completely. I have been with Mitsui for nearly 24 years and from my first day on the job, I have been struck by the company's incredible diversity. It is difficult for any individual employee to grasp immediately the totality and the diversity of a Japanese trading company. It takes a long time.

But as Michael said, our activities constantly evolve as well. There has been no dramatic increase in diversification during the last few years, but there has been a continual search for new markets, new suppliers, new customers and new types of business. At the other end, Mitsui has been shedding old suppliers, old customers and old types of business.

I often tell people who do not know Mitsui that we do everything in the field of business around the world. Whether it be simple importing or exporting, investing or financing, major project development, technology transfer or providing insurance, shipping and warehousing, you name it and we do it. Mitsui always has done these things.

With more recent technological breakthroughs, the firm's activities have become increasingly sophisticated. As Michael said, both of our companies are moving as fast as they can to get into e-commerce and other aspects of the IT revolution.

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Ms. Wanner: How do those developments affect the activities of the Washington representatives? Do your offices serve as hubs for certain types of business development — that is to say, projects with the World Bank or other Washington-based development agencies?

Mr. Bruser: Yes, we have a lot of World Bank-related work, and one staff person focuses almost exclusively on those projects. For the past decade, we also have had an individual who specializes in export controls. That job has become more complex as technology has become more sophisticated.

Trade in high technology products and services has been deregulated considerably in the last several years, but the controls that remain may be even tighter and more complicated. In addition, the types of products affected are more sophisticated and more complicated. So export-control cases that are referred to the Washington office have become more interesting in recent years, but they also are more difficult to deal with.

Ms. Wanner: Which makes you all the more important to Tokyo?

Mr. Bruser: Yes, that's true. But to answer your question about how it affects what we do, I would say that there has been a mushrooming of policy issues affecting IT and the New Economy. These days, Mitsui's Washington office devotes considerably more staff time to analyzing and reporting on changes in the U.S. high tech industry, developments in e-commerce and such issues important to IT as privacy rights, copyright protection, trade and so forth.

Ms. Wanner: Given the attention focused on the IT boom, do your head offices rely on you as another source of information on Nasdaq developments? The so-called dot-coms seem to blossom — and collapse — every day, and the Nasdaq reacts accordingly. Does headquarters ask you for your impression of these developments and how they reflect industry trends?

Mr. Olive: As part of that industry, Fujitsu obviously is keenly interested in such developments. But headquarters does not look to the Washington office for a regular reading on stock market developments. We do help out in terms of organizing conferences or providing information on trends in the New Economy, including the rise of dot-coms, because it is of such high interest to Fujitsu and other IT companies.

It is important to bear in mind that even five years ago, the Internet and e-commerce were exotic concepts. Now, not a day goes by without a conference or some sort of program on these subjects.

Just as important, the IT revolution has created a proliferation of private-sector coalitions that focus on issues related to the Internet and e-commerce. These groups have enabled companies like Fujitsu to increase its involvement in the development of appropriate policy and regulatory frameworks to promote information infrastructures and e-commerce. And, the strong interest here in Washington in these matters has created new representational activities.

Plus, the governments of the United States and other countries are looking for information about these new technologies and their implications for policies. Since the Internet is worldwide, U.S. officials typically will ask, "What are the global aspects of this?" They tell us that they want to hear the views of Japanese and European companies.

More than in the past, we are being invited to offer our perspectives on industrial and policy developments. People in Washington want to know how other governments and businesses are dealing with the impact of the Internet on commercial and economic activities.

Ms. Wanner: For about the past 15 years, the U.S. subsidiaries of Japanese companies have focused greater attention on being good corporate citizens through various community outreach and philanthropic endeavors. Ideally, these activities benefit both the host community and the company. What have been the experiences of your companies?

Mr. Ryan: Certainly, the host communities of the huge Japanese auto manufacturing facilities in Tennessee, Kentucky and Ohio understand very directly how those operations have benefited them in terms of employment generation and community support.

Daimler-Benz's 1998 takeover of Chrysler Corp. made a strong impression on everyone. This deal not only drove home the point that the auto industry had gone global, but it also illustrated in rather stark terms the fact that ownership alone cannot be used as a guide to determine the benefits of having a certain manufacturer in your midst.

Rather, it is more important to consider a company's approach to giving back to the community and whether that company has proved to be a good corporate citizen. I think that Nissan [Motor Co., Ltd.]'s outreach activities in Smyrna, Tennessee and Toyota [Motor Corp.]'s programs in Georgetown, Kentucky, for example, have helped to enlighten locals on this issue.

Mr. Call: Japanese automobile companies and electronics manufacturers have perhaps better-organized grass-roots programs than other U.S. subsidiaries of foreign companies, in part because they have such a large employment base. The presence of a factory in a community is felt literally by thousands of people.

Japanese trading companies also have a presence in their host communities but often not on the scale of manufacturing companies. One U.S.-based Japanese automobile factory may represent twice as much of the American employment base of all of Mitsubishi International. Nevertheless, we also are committed to being a good corporate citizen. Mitsubishi feels that it is important to make its best efforts to contribute to host communities, no matter where the office or facility is located.

Mr. Bruser: Michael is right. Mitsui does not have a huge employment base in the United States and because the firm does not deal in consumer goods, it does not have a very visible presence in this country, either.

We have a philanthropic foundation, though, that focuses mostly on education and the arts. As Paul said, the reaction at the local level has been very positive. I have seen some of the letters that students and college administrators have written in gratitude for support from the Mitsui Foundation, and it is really overwhelming.

For many of the reasons mentioned by Paul and Michael, Mitsui has not integrated its local giving into a national effort. The company also has a very important policy: no lobbying. It keeps its philanthropic activities focused at the local level and does not attempt to leverage the goodwill they generate by lobbying congressional staff or administration officials.

Mr. Ryan: I think it probably is harder for trading companies to do something at the national level precisely because they do not have a big presence in consumer products. On the other hand, a car, for example, is a very visible thing, something that everyone can relate to. You can open the hood and see that the engine was manufactured in America. On the road, you see evidence of Japanese auto companies as you drive or sit in traffic. It is easier to build a corporate image when you have that kind of concrete presence than when your company is involved in so many different kinds of businesses, as is the case with trading companies.

Mr. Olive: Being a good corporate citizen is important to businesses, whether they have facilities in the United States or anywhere else. These activities demonstrate that the company is reliable and is a responsible business and community partner.

As with auto and other companies, Fujitsu's activities are based around its plants. Its local operations make contributions to the United Way, sponsor scholarships, establish links to schools for technical education and so forth. Fujitsu helped to found a school for international business management called the Japan-American Institute of Management Science, which is based in Honolulu, Hawaii. But the company does not necessarily publicize these activities nationwide. Locally, however, they are well-known and appreciated.

Our efforts to be a good corporate citizen do help us in Washington in that they increase the company's name recognition. When I opened the Washington office in 1990, many people here thought that Fujitsu either made film or had a blimp. Fujitsu was not a household name yet. Our community-support activities have helped build the company's image and enhance the public's understanding of what Fujitsu is all about.

Mr. Call: From time to time, Japanese companies have been criticized for their philanthropic activities. Cynics have suggested that such corporate generosity is simply a way for Japanese companies to buy off policymakers. That attitude is really unfortunate since it makes our philanthropic activities suspect in some quarters. But that does not mean that we should stop these efforts.

Mr. Ryan: Some people are suspicious of any kind of corporate philanthropy for the same reasons. They always have been. Obviously, the fact that the benefactor is Japanese makes it even more likely to be criticized, but it is the company that is the target — not the local program, scholarship or activity in and of itself.

Mr. Olive: This also may explain why the Japanese prefer a quiet approach to corporate giving. The involvement of Japanese companies in local community activities is not necessarily for public relations purposes. Rather, they are engaged because the event or activity involves their employees or has an impact on the corporation's presence in the community.

Mr. Ryan: Japanese companies understand that the place to really get things done is at the local level. So, to the extent that you have strong and harmonious relations with the host community, you generally can count on having a more productive work force.

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Ms. Wanner: What challenges do you anticipate for Washington representation in the years to come?

Mr. Bruser: We talked earlier about the potential for a renewed bout of trade friction if the United States goes into recession. This would not necessarily be a new challenge but, compared with the last two to four years, it would represent a return to the climate of the 1980s. We would have to regroup and relearn many of the strategies that we used to deal with the tensions of 10 or 15 years ago.

Having said that, though, the trade disputes would not be completely identical to those of the 1980s because the one shoe that never has quite dropped concerns Japanese antitrust practice. Washington has not been able to get very far in persuading Japan to strengthen antitrust enforcement. As we discussed earlier, many U.S. policymakers still hold the view that Japan's unfair trading practices persist — and anticompetitive activities are behind many of the pending issues, especially flat glass, auto parts and construction.

So, if we experience an upsurge in trade-related tensions, they well could focus on antitrust enforcement in Japan. I do not think that would affect trading companies directly. However, stronger antitrust enforcement potentially could affect our customers and suppliers in Japan as well as alter conditions in certain markets important to us.

Mr. Call: In addition to these issues, I see the challenges ahead in a professional sense. Especially with the IT revolution, Washington offices must strive to perfect, enhance, develop and create a professional cadre. It is important to have a staff that understands the company, but it is equally important to have employees who possess the sort of Washington expertise that cannot be acquired overnight.

For that matter, Japanese corporations need to develop a special cadre of professionals who can serve the company not only in Washington but also in London, Moscow, Brussels, Tokyo and elsewhere because information is becoming so important to everything. It is one thing for a company to have employees who can sell products. But it is quite another to have a group of individuals who can work in a policy environment and understand the implications of the act of selling a product as it relates to policy.

Mr. Ryan: I could not agree with Michael more. Certainly, the globalization of business in every single industrial sector has placed a great deal of pressure on Japanese companies to reduce costs. And one way that firms — and not just Japanese concerns, by the way — have sought to trim costs is to outsource many of the activities performed by their Washington offices.

This makes the maintenance of a special cadre, to use Michael's term, all the more important. A company needs professionals who can take the incredible amount of information that is now available from so many different sources and distill it into something that is understandable and relevant to business activities. An individual who is hired simply to advise the company once in a while cannot provide this service very effectively because that sort of person generally lacks a thorough understanding of the business.

Mr. Call: And, with the Internet, so much more information is available. Having an understanding of how Washington works enables a person to better sort through the plethora of information and exercise greater selectivity.

As we discussed earlier, every office around the globe with access to the Internet can obtain a particular bill or testimony — but invariably they come back to us with questions as basic as, "But what does it mean?" The challenge is to keep ahead of the IT learning curve as well as to stay abreast of developments in industry and the economy and to understand how to use all of the tools available via the Internet to aid business development and, in turn, boost sales.

It is important to understand that politics is a labor-intensive business. Not everything can be done over the Internet. Effective Washington representation requires developing interpersonal skills, building relationships, investigating and rooting out information. One must uncover the story behind the story. The need for those talents and capabilities will continue for quite some time. This makes it all the more important to educate companies on the importance of Washington-based professionals.

Mr. Olive: I would add that Washington, in and of itself, is constantly changing. Soon, there will be a new administration and a new Congress and, no doubt, new business organizations. This will necessitate creating new links, contacts and networks as well as reaffirming and further developing long-established relationships. Thus, Washington representation will continue to be an ever-challenging and ever-changing process.

The views expressed in this report are those of the author
and do not necessarily represent those of the Japan Economic Institute

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ABOUT THE GUESTS

Lawrence Bruser is deputy general manager and director of government affairs in the Washington, D.C. office of Mitsui & Co. (U.S.A.), Inc. He joined Mitsui's New York office in 1976 and worked in the Information and Research Division at Tokyo headquarters from 1982 to 1984.

Michael Call is vice president and deputy general manager of the Washington, D.C. office of Mitsubishi International Corp. Before joining Mitsubishi International in 1987, he was with International Business-Government Counsellors, Inc., a Washington, D.C.-based government relations consulting firm. He also served on the staff of Rep. Les AuCoin (D, Ore., 1974-92).

David Olive is deputy general manager of Fujitsu, Ltd.'s Washington, D.C. office, which is part of the company's external affairs group. He advises Fujitsu's business units on public policy issues concerning information technology, the Internet, electronic commerce, telecommunications, international trade, and science and technology. He joined Fujitsu after completing numerous overseas postings as an officer in the Department of State's Foreign Service.

Paul Ryan is director of commercial affairs for the recently organized Association of International Automobile Manufacturers, Inc. Before joining AIAM, he spent nearly 12 years with the Washington, D.C.-based government affairs office of Nissan Motor Co., Ltd., organizing grass-roots lobbying efforts, assembling and leading coalitions, and developing media relations campaigns. He also worked as a legislative analyst in the economic section of the Embassy of Japan in Washington, as a defense policy specialist at the Pentagon and as a staffer on Capitol Hill.

The views expressed in this report are those of the author
and do not necessarily represent those of the Japan Economic Institute

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