TECHNICAL ADVANCE THROUGH NATIONAL COLLABORATION
Japanese initiative in leading Cold War consumer markets also stemmed from increased collaborations among firms and associations and state support of key national business sectors. As public policy scholars Leonard Lynn and Timothy McKeown have noted, Japan has "intensified" its efforts since 1945 to promote the interest of exporting firms and formalizing increased legal protection for home markets against foreign competition. In particular, the passage of the Export-Import Transactions Law of 1952 coupled with a frequent relaxation of the Antimonopoly Law permitted postwar Japanese firms "to engage in a wide range of collective action to promote exports" including joint R&D, marketing, and technology purchases.^[25]

Technology-driven industries such as steel and machine tools immediately realized a surge in competitive strength against Western imports and, for the first time, established a foothold in world export markets due to the new collaborative spirit of Japanese enterprise. New business associations such as the Kozai Club and the Japan Machinery Exporters Association provided special reports and seminars outlining in detail the technological base, operational structure and trade markets of U.S. and Western European competitors.^[26] Similar associations soon developed in several major Japanese industrial sectors including automobiles, light industry, shipbuilding, textiles, and electrical and wire products. The collaborative nature of Japanese technology research and transfer reached a peak from 1961-1983 when 63 separate research associations were formed to pool technical resources and information in such sectors as computer hardware and software, steel, aircraft engines, optical and medical instruments, manufacturing systems, plastics, chemical and polymer production, paper, textiles, and synthetic dyes technology, petroleum refining and production, automobiles, metallurgy, coal, and aluminum processing, and biotechnology.^[27]

National R&D grants from the Japanese government such as the VLSI project in computer development has substantially aided firms in their attempts to acquire or transfer new technical knowledge. Between 1950 and 1982, a broad spectrum of Japanese firms received over 50 billion yen in direct loans to engage collaboratively to carry out technology research and establish connected business markets.^[28] By contrast, U.S. and, to a lesser extent, European firms continued to conduct R&D in a costly, competitive environment at home as well as abroad marked by private expenditures and a reliance on university and government-based research laboratories. While the Reagan Administration took steps in 1983 through the Keyworthy Initiative to develop closer ties between government, university, and business R&D efforts, Japan's lead in high-tech exports had already breached a variety of America's own markets, both home and abroad.^[29] Armed then with cutting edge technical knowledge flowing from out new business associations, state-sponsored research, and Cold War economic assistance, Japan aggressively pursued technical modernization as a postwar pathway to finally triumph over foreign dependencies in its home markets and successfully compete in lucrative high-tech and civilian export markets worldwide.

The postwar advent of Japanese neo-nationalism and business independence clearly forced American policymakers and executives to re-adjust the former focus of U.S. trade and business policies in favor of liberalization and partnership over paternalism and restraint. The first signs of American recognition of Japanese parity emerged in the late 1950s as the Eisenhower Administration reverted to the highly unfavorable prewar system of bilateral VERs (voluntary export restraints) to stem rapidly rising levels of such Japanese imports as fresh and frozen tuna, cotton clothing, flatware, and china, and other light industry products into the United States.^[30]

The VERs of the 1950s, however, did not signal a return to the older, prewar nature of U.S.-Japanese trade relations. In the 1920s and 1930s, VERs had fostered a "big brother-little brother" relationship which favored the protection of American industries and significantly limited the growth of Japanese innovation and expansion, not only in consumer staple markets, but in such fledgling, sophisticated light manufacturing products as automobiles, optical and scientific instruments, and electrical components. The newly competitive nature of Japanese postwar products, both in terms of price and quality, coupled with Japan's aggressive attempts to protect its domestic markets forced American policymakers and business executives to agree to quid pro quo export restraints aimed at stemming the escalating tide of imports and dumping practices on both sides of the Pacific. Also, the United States had to extend increased import-export trade concessions to keep Japan solidly tied to the West and away from economic threats posed by encroaching communism in Southeast Asia.^[31]

Along with Cold War-inspired trade concessions, Japan equalized its position with the United States in terms of world business status and activity by encouraging joint ventures and licensing agreements over ownership arrangements with U.S. companies. As reported by the U.S. Conference Board in 1994, Japan ranked first in foreign licensing agreements with American manufacturers, comprising double the share when compared with the second ranking country, the United Kingdom. Hirchmeier and Yui have also commented on the overwhelming postwar transfer of American technology know-how to Japan through frequent licensing deals:

In addition to licensing, U.S. firms also reported in 1994 two to three times the number of joint ventures in Japan than in other countries though only 3.3% of American majority-owned plants had been established concurrent to such agreements.^[34] While the report clearly showed that U.S. multinational firms preferred majority-owned subsidiaries over joint ventures and licensing agreements, particularly in high technology fields, Japan had, nonetheless, managed to stave off excessive American encroachment in home industries through its postwar system of associative collaborations and government legal and funding supports. By entering into joint and licensing ventures over subsidiary relationships with American firms, Japanese companies realized the double benefits of exposure to new technical processes and technologies while maintaining independent management and operational structures.^[35]

Increased Japanese strength against American firms in technology markets also came as a result of significant gains in such key competitive business areas as private R&D investment spending, worker productivity gains, and capital investment. By 1980, Japan led all industrialized Western countries in terms of worker investment increases with the United States falling from fist to sixth place. In contrast, American productivity growth also lagged significantly behind Japan, which increased manufacturing rates at a rate of 5% v. the U.S. rate of 2.5%. American policymakers were also forced to note that aggressive R&D spending on the part of Japan had placed it on equal footing with the United States and had prompted "a competitive advantage in a number of high-technology products" for Japanese firms.^[36]

Alarmed and concerned over the growing domination of Japan in world high technology markets, the Reagan Administration conceded to American business pressure to finally alter the Cold War framework of U.S. foreign economic policymaking. In addition to championing an unprecedented number of embargo exceptions requests before CoCom, the Reagan Administration also spearheaded the passage of the 1988 Omnibus Act to simplify and de-regulate American export licensing procedures, establish higher import quotas in key domestic industries such as steel, electronics, and automobiles, and promote greater business opportunities abroad. While the Bush and Clinton Administrations have pursued similar protectionist measures, the rivalries and partnerships that have marked Japanese and American technology and enterprise since the end of World War II has not been substantially altered. Vigorous competition as well as cooperation still marks Japanese and U.S. technological pursuits, and as a result of the ongoing "rival partnership" between the two nations, many of the barriers erected in world technology markets under the Cold War have been dismantled and liberalized, particularly since the 1980s.

1. Charles R. Taylor and Witold J. Heniz, U.S. Manufacturers in the Global Marketplace (New York, NY: The Conference Board, 1994), p. 21.
2. U.S. Economic and Trade Policy Staff, Study of U.S. Competitiveness (GOP: July, 1980), p. I-3.
3. For an overview of the modern evolution of U.S.-Japanese commercial relations, please see Alfred Eckes, Opening America's Market: U.S. Foreign Trade Policy Since 1776 (Chapel Hill, NC: University of North Carolina Press, 1995 and William McClenahan, "Orderly Competition: American Government, Business and the Role of Voluntary Export Restraints in United States-Japan Trade, 1934-1972" (Ph.D. Dissertation, The George Washington University, 1993).
4. Aaron Forsberg, America and the Japanese Miracle: The Cold War Context of Japan's Postwar Economic Revival, 1950-1960 (Chapel Hill, North Carolina: University of North Carolina Press, 2000), p. 3.
5. For more on the shifting objectives of early Cold War U.S.-Japanese economic relations, see William S. Borden, The Pacific Alliance: United States Foreign Economic Policy and Japanese Trade Recovery, 1947-1955 (Madison, Wisconsin: University of Wisconsin Press, 1983), Aaron Forsberg, America and the Japanese Miracle: The Cold War Context of Japan's Postwar Economic Revival, 1950-1960 (Chapel Hill, North Carolina: University of North Carolina Press, 2000) and Michael Schaller, The American Occupation of Japan: The Origins of the Cold War in Asia (New York: Oxford University Press, 1985).
6. In his Ph.D. dissertation, William McClenanhan portrays in a detailed fashion the re-emergence of Japanese competition in light manufacturing and U.S. efforts to control Japan's re-ascent as a world trading power. In particular, see Chapter Two, "Orderly Competition: American Government, Business, and the Role of Voluntary Export Restraints in U.S.-Japan Trade, 1934-1972" (University of Michigan Dissertation Service, 1993). Also, Alfred Eckes, Opening America's Market: U.S. Foreign Trade Since 1776 (Chapel Hill, North Carolina: University of North Carolina Press, 1995).
7. Eckes, Opening America's Markets, pp. 168-176; 206-210.
8. For more on the American government aims for the USTA&P, see Jacqueline McGlade, "From Business Program to Production Drive: The Transformation of US Technical Assistance to Western Europe" in Matthias Kipping and Ove Bjarner, eds., The Americanisation of European Business: The Marshall Plan and the Transfer of US Management Models (London, UK: Routledge Press, 1998) and "Americanization: Ideology or Process? The Case of the United States Technical Assistance and Productivity Programme" in Jonathan Zeitlin and Gary Herrigel, eds., Americanization and its Limits: Reworking US Technology and Management in Post-War Europe and Japan (Oxford, UK: Oxford University Press, 2000).
9. Japanese firms and organizations often sought technical advice and assistance, not only from the United States, but France and Germany, most notably in its coal mining, electrical, automobile, textiles, and shipping industries prior to World War II. For examples of Western influence on pre-World War II Japanese industries, see Satoshi Sasaki, "Scientific Management Movements in Pre-war Japan," Yukio Yamashita, "The Inside Contract System in Japan: With Particular Reference to the Coal Mining Industry," and Toshiaki Chokki, "Modernization of Technology and Labor in Pre-War Japanese Electrical Machinery Enterprises," in Japanese Yearbook in Business History, Volume 4, 1987, and Masaru Udagawa, "The Prewar Japanese Automobile Industry and American Manufacturers," Japanese Yearbook in Business History, Volume 2, 1985.
10. Kinsaburo Sunaga, "American Technical Assistance Programs and the Productivity Movement in Japan," Japanese Yearbook on Business History, Vol. 12, 1995, pp. 35-36. Also see, Satoshi Sasaki, "The Emergence of the Productivity Improvement Movement in Postwar Japan and Japanese Productivity Missions Overseas," Japanese Yearbook on Business History, Vol. 12, 1995, pp. 49-52.
11. See Jacqueline McGlade, "The Illusion of Consensus: American Business, Cold War Aid, and the Recovery of Western Europe, 1948-1958); Ph.D. dissertation (The George Washington University, 1995).
12. Takenori Saito, "Americanization and Postwar Japanese Management: A Bibliographical Approach," Japanese Yearbook on Business History, Vol. 12, 1995, p. 17.
13. See Kauo Wada, "The Development of Tiered Inter-firm Relationships in the Automobile Industry: A Case Study of the Toyota Motor Corporation," Japanese Yearbook on Business History, Vol. 18, 1991, pp. 36-38.
14. Aaron Forsberg, America and the Japanese Miracle, pp. 187-189.
15. As of 1951, Belgium, Canada, Denmark, France, West Germany, Italy, Japan, Luxembourg, The Netherlands, Norway, Portugal and the United Kingdom had agreed to participate in the Consultative Group, COCOM and the ensuing "ICDV" system. By 1953, Greece and Turkey also joined the group. Austria, as a result of its reliance on trade with Eastern Europe, and Spain remained notably absent >from the list. Worldwide Enforcement of Strategic Trade Controls, pp. 22-23.
16. Ibid, pp. 20-21.
17. Michael Mastanduno, Economic Containment and East-West Trade (Ithaca, NY: Cornell University Press, 1993), pp. 69-70.
18. See Jacqueline McGlade, "The Illusion of Consensus: American Business, Cold War Aid, and the Reconstruction of Western Europe, 1948-1958", Ph.D. dissertation, (University of Michigan Microfilm Publications), 1995, Ch. 8 and also Office of Technology Assessment, Technology and East-West Trade (GPO, 1979), p. 156.
19. Archives Diplomatiques, Ministere des Affaires Etrangeres, Paris, CoCom Papers, Folder 587, Documents Related to International Lists. The documents bear out the fact that while European pressure led to several major revisions of the COCOM lists starting in 1957, the economic and trade base of several member nations were, nevertheless, noticeably altered by the artificial barriers that had coincided with the critical period of post-WW II recovery. The drastic nature of early COCOM controls had further impeded the abilities of European firms and industrial sectors, already struggling with problems of disrupted materials markets, inflation and depleted money supplies, disabled transportation and communication systems, and depressed buying cycles, to return to pre-war markets and conduct "business as usual."? As goods (or parts of goods) in both emerging consumer as well as suppliers markets became affected by East-West embargoes, a widening circle of companies were forced to alter or abandon altogether their pursuit of traditional trajectories of business development, production, management, and delivery.
20. See Aaron Forsberg, America and the Japanese Miracle, pp. 1-4.
21. Archives Diplomatiques, Ministere des Affaires Etrangeres, CoCom Papers, Folder 642, Export Controls, Document 842, "Message from the Chairman of CoCom on Japan," August 6, 1952.
22. There are numerous documents in the CoCom Papers on committee struggles to block Western ship technology to the communist bloc. For detailed technical discussions, please see CoCom 1954-1958 Sub-Committees Exports Controls and Lists, Folder 625, Document (54) 5 "Coordinating Committee Statement of the Chairman of the Sub-Committee on Fishing Vessels," March 4, 1954.
23. The CoCom Papers at the Archives Diplomatiques in the Ministere des Affaires Etrangeres in Paris contains hundreds of documents, which outline the trade alterations, business difficulties, and technological consequences of the East-West embargo. For technical information, please see the 500 series of CoCom Folders that contain detailed reports from the expert subcommittees formed to study each industrial sector or products affected by the embargo lists.
24. For more on Japanese competition for postwar shipping and high-tec consumer markets, see Alfred Eckes, Opening America's Market, p. 259 and Alfred D. Chandler, Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge, MA: Harvard University Press, 1990), pp. 612; 616-617.
25. Leonard Lynn and Timothy McKeown, Organizing Business: Trade Associations in America and Japan (American Enterprise Institute for Public Policy Research, Washington, D.C., date!), p. 120.
26. Ibid, pp. 128-129.
27. MITI Agency for Industrial Science and Technology, Kenkyu Kaihatsu Josei Seido (Tokyo: MITI, 1983).
28. Ibid.
29. See Alfred Eckes, Opening America's Markets, pp. 258-260.
30. See William McClenanhan, "Orderly Competition: American Government, Business, and the Role of Voluntary Export Restraints in U.S.-Japan Trade, 1934-1972" (University of Michigan Dissertation Service, 1993), pp. 52-111. Also, Alfred Eckes, Opening America's Market, pp. 170-176.
31. See U.S. Office of Technology Assessment, U.S. Industrial Competitiveness: A Comparison of Steel, Electronics, and Automobiles (Washington, D.C.: GOP, 1981).
32. Joannes Hirschmeier and Tsunehiko Yui, The Development of Japanese Business, 1600-1973(Cambridge, MA, 1975), p. 258.
33. Alfred Chandler, Scale and Scope, p. 617.
34. Charles Taylor and Witold Henisz, U.s. Manufacturers in the Global Marketplace (New York: The Conference Board, 1994).
35. U.S. International Trade Commission, International Technology Transfer: A Review of Related Legal Issues (Washington, D.C.: GOP, 1979)
36. U.S. Congress, Economic and Trade Policy Subcommittee, "Study of U.S. Competitiveness," (Washington, D.C.: GOP, 1980), p. I-3.