After a decade of sub-par performance, the Japanese economy remains in the doldrums. Now, after a decade of extraordinarily strong performance, the United States economy is slowing. The ability of the world's two largest economies to reestablish strong growth is of critical importance to themselves and to the world as a whole. Trade frictions between the United States and Japan have remained muted in recent years but the deteriorating economic situation in the United States will lead to renewed attentionto trade issues. Japan will feature prominently. The bilateral trade agenda is increasingly moving beyond the traditional border impediment issues toward the more politically sensitive issues of internal regulation and deregulation. In the past, security concerns have mitigated trade tensions but the end of the Cold War has undercut a primary justification for the United States-Japan security alliance, in turn requiring a rebalancing of economic, diplomatic, and security priorities....

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