"Master & Vassal": The Uneasy Economic Relationship Between America & Japan
by Gloria R. Lalumia
As a child I was fascinated by the treasures in my mother's china closet. Tucked in a back corner behind the crystal was a delicate teacup and saucer set, decorated with a flower pattern in soft yellows, blues, and greens with gold etching on the rim and handle. The imprint on the bottom of each piece read "Handpainted China Made in Occupied Japan."
Over forty years later, that teacup still sits in the china closet. But since 1952, when the U.S. forces occupying Japan after World War II departed, the economic changes that have transformed the devastated country have been nothing short of incredible. The early days of cheap goods (including handpainted teacups) have given way to today's dominance in the world economy. Along the way the relationship between the U.S. and Japan has grown increasingly strained as recent trade difficulties demonstrate.
How did all these problems start?
Our recent trade difficulties have their roots in the period following World War II when Japan became an American stronghold of military bases. Occupied Japan served as a deterrent against Soviet and Chinese communist expansion. In 1951 a peace treaty was signed which led to the formal end of the occupation in 1952. Japan emerged as an economically strong and political stable country at the end of the occupation in what has been described as a "master-vassal" relationship with the U.S. This relationship continued as Japan continued to house American troops through the Korean and Vietnam Wars, right up to the end of the Cold War.
In return for its support of U.S. interests in the Far East Japan was granted special trade status by the U.S. At first the U.S. imported low value goods (remember when "Made in Japan" meant cheap stuff?), but later allowed higher value Japanese products into the country.
Since the end of the Cold War U.S. leaders have become more and more dissatisfied with what has become a lopsided arrangement. Japan now exploits open U.S. markets while restricting its own markets to U.S. goods, particularly high end products like electronics and automobiles, a situation that now poses a threat to U.S. industries and jobs. Forces in the U.S. itself--namely, the Pentagon--insist that Japan must be mollified so that it will continue to act on our behalf as a hedge against possible unrest in Asia. But most observers feel that in the missile age, China is long past being restrained by a small American military force in Japan. And Japan is now beginning to go its own way in foreign affairs, for example, by refusing to join the U.S. trade embargo against Iran. So, letting Japan continue to take advantage of our open markets no longer seems to hold any strategic benefit for the U.S.
The showdown at the end of June over U.S. access to Japan's auto market was just the latest in a series of attempts to end this one-sided trade relationship. In previous negotiations the Japanese have promised to allow access to their markets, but because they've refused to go along with measurable sales targets for goods, these agreements have fizzled. Why has it been so hard for the U.S. to make any substantial headway on trade issues with its number one economic rival?
The Japanese Character
The qualities that make Japan such a tough adversary are clearly evident in the chart for the time of restored sovereignty (Midnight JST, April 28, 1952). Japanese tenacity and perseverance are immediately obvious in the locomotive shaping of the chart; the Capricorn Ascendant and Scorpio MC; and the Taurean Sun, whose placement in the 3rd House within a stellium which includes Venus, Ceres, and Jupiter (all in Aries) points to the aggressive and persistent approach by the Japanese to communications, trade, and automobiles, in particular. Second House Pallas sextile the Ascendant describes the Japanese skill in strategizing, planning, and mobilizing for concrete success in acquiring needed resources. The Sun opposes the MC/Mars conjunction in Scorpio (with Mars in its alternate ruling sign functioning as the elevated planet in the chart) indicating that Japan is perceived by other countries as persistent, perhaps obsessive as it pursues its goals, as well as secretive and needing to maintain total control, traits which create the potential for strained relations with its trade partners. This tendency toward tense relations is reinforced since 2nd House Mercury in Aries, assertive in trade and commerce, quincunxes the MC/Mars conjunction.
Seventh House Vesta, posited in its ruling sign at 0 degrees Virgo, further highlights the Japanese focus and drive with regard to foreign relations, while Pluto exalted in Leo in the 7th House intensifies Japan's power in this sphere. The Pluto/Juno(1st House) opposition along and Juno's square to the MC emphasize the conflict between Japan's need to assert its power and control in its foreign relations versus its need to cultivate partnerships.
Pluto's 7th House placement also hints at the possibility of Japan's manipulation and devious use of power in its foreign relations. Contacts involving 9th House Neptune further emphasize these disquieting elements of the Japanese approach to foreign trade issues. Specifically, the Juno/Moon/Neptune Grand Trine in Air linking the 1st, 5th, and 9th Houses, respectively, underscores the shifting nature of Japan's dealings involving commerce with other countries. Juno's 1st House placement in Aquarius emphasizes Japan's desire to go its own way, and the trines from Juno to Neptune and the Moon indicate that other countries may never be certain of what to expect when dealing with Japan. Neptune's square to the Capricorn Ascendant also indicates that a deceptively straightforward presentation may hide the true intentions Japanese representatives.
The "Keiretsu" System
The structure of Japan's domestic economy is another key to understanding the difficulties in U.S.-Japanese trade relations. Essentially, Japan's "keiretsu" system allows major industries to operate as cartels, described by columnist John Farmer as being "integrated to cover every aspect from finance through production and supply networks to distribution outlets--all blessed by a government bureaucracy designed to pro tect producers, not consumers." By keeping foreign products out of the country, Japan's industries enjoy protected markets (captive consumers) at home while exporti ng to open markets overseas.
It's obvious why the "keiretsu" system is so entrenched. The sign of Taurus on the IC is an indicator of the solid traditionalism which binds Japanese society together. Within the character of the Japanese people there is a willingness to work cohesively, by merging and associating for group cooperation, as indicated by the out of sign conjunction of the North Node (Aquarius) and the Part of Fortune (Pisces) in the 1st House. This combination squares the Sun/Moon midpoint in Taurus in the 4th House, again focusing on the deep-rooted Japanese sense of tradition and nationalism. The North Node/Part of Fortune combination also sextiles/semi-sextiles the Venus/Ceres/ Jupiter/Sun stellium in the 3rd House which emphasizes how the productivity of the nation (Ceres) is achieved through close networking with associates (3rd House).
The "keiretsu" system also thrives because of the Japanese government's involvement in the economy. A Cardinal Grand Cross linking Mercury, Uranus, Saturn, and Chiron in the 2nd, 6th, 8th, and 12th Houses, respectively, describes how the Japanese use this system to deal with the demands of international relations. Saturn (exalted in Libra) in the 8th House (tariff's, international finance) opposes 2nd House Mercury (security concerns, financial resources, values). Saturn represents controlling forces in the state, such as policies, hierarchies, and old, ingrown practices that affect the trade system (Mercury). Saturn's square to 6th House Uranus indicates strong resistance to any change to the economic system, particularly as it applies to the organization of the labor force.
Chiron's placement in Capricorn in the 12th House is particularly significant since it symbolizes the isolating protectionist manner in which the Japanese choose to handle their trade issues. Richard Nolle comments that this Chiron position also describes a "survivor" that will exhibit tenacity as it "aims to prevail despite any adversity" and may well seem ruthless in the process of achieving its goals, while Chiron's opposition to Uranus (6th House) represents the unpredictable individualistic streak and willingness to "go it alone" that set Japan's protectionist policies at odds with the movement toward global free trade. The squares from Chiron to Mercury (3rd House) and Saturn (8th House) indicate that Japan will face challenges to its positions on trade and tariffs. Chiron's trine to the 3rd House Sun and sextile to the MC/Mars conjunction further reinforces the tensions between Japan and its trading partners, particularly with the U.S. where automobiles are concerned.
In addition, the Pluto trine from the 7th House (foreign relations) to Venus and Ceres in the 3rd House (networking, communications) illustrates that the "keiretsu" system's focus on linking groups together in cooperative efforts may be so fixed and controlling that negative repercussions are likely to occur in Japan's relations with other countries.
Planetary Forces and the Latest Round of Trade Talks
During the latest round of talks the "keiretsu" system was precisely the issue that prompted the U.S. to threaten trade sanctions against Japan. The sanctions called for increasing tariffs on luxury automobile imports by 100 percent, a move that would have guaranteed an outright trade war between the world's two largest economic powerhouses. The deadline for sanctions was scheduled to take effect at Midnight EDT (Washington, D.C) on June 29, 1995. Although an agreement was reached just hours before the deadline, a number of transits that came into range approximately a week to ten days before the deadline and stayed in range from a week to several months after it passed clearly illustrate the tensions that surrounded the talks.
Prominent contacts to the U.S. chart (4:47 P.M., July 4, 1776) during this period included transiting Chiron conjunct the U.S. Neptune in Virgo in the 9th House, highlighting the focus of U.S. energy on the pursuit of the ideal solution to trade problems with Japan. This contact may also indicate that U.S. negotiators may have expected too much and that the goal of rectifying the trade imbalance would be elusive. The 7th House Mars square to the radix Neptune/transiting Chiron combination added to the possibility that the competitive instincts of the U.S. against Japan could result in bitter conflict if sanctions had been imposed.
As the deadline approached transiting Jupiter Rx in Sagittarius was conjunct the U.S. Ascendant and in opposition to the Uranus/Descendant conjunction in Gemini. Jupiter was primed to heighten the U.S. tendency to push its view of the world on its international partners and encourage the perception that the U.S. was arrogant at the bargaining table. In fact, Administration critics warned that following through on the threat of sanctions would ultimately result in the U.S. "shooting itself in the foot" as it pushed Japan into a corner.
However, with transiting Saturn conjunct the U.S. IC (generally, the foundations of society) and trining Mercury Rx in the 8th House (tariffs), U.S. trade officials were able to work with patience and restraint as they engaged in painstakingly intricate negotiations aimed at saving U.S. jobs in the auto industry. At the same time, transiting Neptune Rx opposing the U.S. Mercury indicated that negotiators experienced murky communications in dealing with the Japanese. This is not altogether surprising considering how the Japanese have taken previous agreements and interpreted them to their own advantage.
The Clinton Oath of Office chart was also contacted by transiting Chiron, which formed very close quincunx/semi-sextile aspects to the 5th/11th House cusps, respectively, highlighting the role of ambassadors. The 11th House also deals with international friendships and U.S. aims in dealing with agreements and contracts with foreign countries while the 5th House points to financial risks. The Chiron energy shows the disruption to relations and the serious risks to the U.S. economy which would have occurred if sanctions had been imposed. Transiting Chiron was also contacting President Clinton's natal Uranus/Sun sextile (by squaring his Gemini Uranus}, thus triggering Clinton's often described tendency toward rash actions, in this case, pushing a hard line and playing a game of brinkmanship with Japan.
Japan's reaction to this challenge was predictable. Transiting Mars in the 8th House (tariffs) squaring Japan's Ascendant/MC midpoint at 17 Sagittarius 19 pointed to impatience and anger toward the U.S. position, while transiting Jupiter Rx quincunxed the 3rd House Sun, testing Japan's restraint as the threat to their automobile exports intensified. (Japan threatened to retaliate by stopping imports of American agricultural and hi-tech products if sanctions were imposed.) At the same time Pluto Rx in Scorpio quincunxing Ceres increased the possibility that Japan would be forced to eventually make an adjustment in the operation of its "keiretsu" system.
No one is quite sure if such a change has or will take place now that an agreement has been reached. U.S. negotiators dropped demands that Japan meet numerical targets for measuring increasing sales of U.S. automobiles and parts. Tokyo stuck to it's position that numerical targets were "outside the scope of government" and that action would be entirely up to individual Japanese companies. Although critics called the deal another cave-in on the part of the U.S., U.S. manufacturers were pleased with the agreement which Administration official insist contains measurable goals in the form of increased dollar amounts of auto parts purchased over the next three years; an increase in the number of dealerships selling cars over the next five years to 1,000; and increased manufacturing of vehicles in the U.S. by Japanese auto makers. As if to demonstrate their commitment to the deal, Toyota, Nissan, and Mazda announced plans to increase production and investment in U.S. plants and use more American parts assembled in Japan.
But trade specialists believe that the agreement is too vague and allows the Japanese companies too much "wiggle room," and without the government standing behind the deal, the automakers might not meet their business plans. In the long run the success of the agreement will depend on how hard the U.S. government and U.S. automakers work to take advantage of the opening and how closely they hold the companies to their announced plans.
Within days of the accord, the Administration took steps to keep the pressure on Japan's trade practices. On July 3rd, as transiting Pluto Rx moved into range in opposition to Japan's Sun/Moon midpoint in the 4th House, the U.S. announced it's intention to pick another fight with Japan over the film and photographic market, clearly signaling that Japan will continue to face challenges to its protectionist its trade policies. The U.S. is now investigating claims by Kodak that Fuji, with the help of the Japanese government, has created barriers that hurt Kodak sales in Japan. Again, the issue is the "keiretsu" system.
In an interview one month after the end of the auto talks, Walter Mondale, U.S. Ambassador to Japan, stated bluntly, "For the Japanese's own good, they have to become a more forthcoming trading partner...We can't continue to live with th is trade imbalance...If they don't produce (the opening of markets) here (Japan), there's going to be an explosion back home in the United States."
So, keep your eye out for the next round of trade talks. And have enough film on hand--the fireworks should create plenty of those Kodak moments.
Farmer, John. "Japan May Be Set to "Blink" on Trade," The Star-Ledger, (Newark, N.J.), June 26, 1995.
Garraty, John A. The American Nation: A History of the United States, Harper & Row, New York, 1966.
Nolle, Richard. Chiron: The New Planet in Your Horoscope, The Key to Your Quest. American Federation of Astrologers, Tempe, Arizona, 1983.
Reeves, Richard. "Mondale Tells Japan Time Is Running Out," syndicated in The Star-Ledger, (Newark, N.J.), July 28, 1995.
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