Dear Japan,

Our relations are deteriorating so rapidly that economic nationalism threatens the prosperity of both our countries. Before we plunge into protectionism and retaliation, it is time to recognize our mutual dependence and to negotiate our legitimate grievances.

First, we must tone down the rhetoric on both sides. You complain, correctly sometimes, of Japan-bashing by Americans. But there is a lot of America-bashing coming from Japan right now. We regularly see America caricatured as a land of lazy illiterates producing nothing but shoddy products. Yet the U.S. is the world's leading exporter, its productivity higher than anyone else's, its universities the world's best. Shoddy products? Does that include Microsoft, Intel, Merck, Motorola, IBM, or Boeing, to name but a few?

Perhaps the most sensitive part of America-bashing concerns race. Our histories, in this respect, are utterly different: You are a homogeneous people in a traditionally closed society; we spring from numerous ethnic and racial backgrounds. Most Americans see enormous strength in our diversity. It is who we are. Yet we are frequently told by many Japanese--from former Prime Minister Yasuhiro Nakasone on down--that our problem is too many blacks or Hispanics. Or sometimes, code words are used--such as "lazy" or "illiterate." Apologies quickly follow, but the damage is lasting. You often say Americans don't understand Japan. Perhaps. But clearly, the reverse is true as well.

The second step is to recognize how much the world is changing. At the end of World War II, America demonstrated unprecedented generosity toward a vanquished enemy. It helped rebuild your country. It opened its markets for your products and allowed your markets to remain closed while you rebuilt your industries. America spent trillions of dollars on defense, much of it to protect Japan from any Soviet threat--allowing you to concentrate all of your resources and energy on commercial activities. It was America that chiefly paid the price to end the Soviet threat.

Now the cold war is over, and, yes, a new world order is unfolding. America's role must change. No longer can we be the enforcer of Pax Americana and the dominant economic power. Instead, we must become a cooperative partner in an integrated global economy in which no country is preeminent. And as you rightly point out, we must also deal with long-neglected domestic problems.

But Japan must change, too. In today's integrated global economy, it is untenable for any one country to run a huge trade surplus with virtually every other nation in the world. Besides, such mercantilist goals are unworthy of the great power Japan should be: You have a bigger role to play than just exporting cars and VCRs. The world needs your presence in diplomacy, foreign aid, and expansion of world markets. And, like America, Japan has its own domestic needs--from improved housing to a cleaner environment.

We recognize that changing Japan's role in the world will be difficult. It's not as simple as repealing quotas or tariffs. You have few left. But it is a matter of changing attitudes, even changing culture. Many of the practices outsiders see as keeping them out seem rooted in Japanese traditions. The keiretsu form of corporate cooperation, for example, may breed great efficiency and teamwork, but it also excludes foreigners. The tradition of doing business with longstanding partners may build loyal relationships, but newcomers, however innovative, are not welcome. These attitudes have made Japan an insular society--a difficult role to sustain in an increasingly global world. For all of America's faults, it has been remarkably open--to people, ideas, and products.

Fundamental attitudes can't easily be changed. But you are right to ask America to make basic changes, too--for example, to change from a consumer culture to a more investment-oriented society. Moreover, we believe fundamental changes in Japan are in your interest. Your people deserve a higher standard of living--in better housing, more leisure time, and less expensive consumer products.

It is time for both nations to stop blaming each other and get on with fundamental change in a changed world. Let the process begin.

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