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First Japan and more recently China have pursued export-oriented growth strategies. While other Asian countries have done likewise, Japan and China are of particular interest because their economies are so large and the size of the associated bilateral trade imbalances with the United States so conspicuous. In this paper the authors focus on U.S. efforts to restore the reciprocal GATT/WTO market-access bargain in the face of such large imbalances and the significant spillovers to the international trading system. The paper highlights similarities and differences in the two cases. The authors describe U.S. attempts to reduce the bilateral imbalances through targeted trade policies intended to slow growth of U.S. imports from these countries or increase growth of U.S. exports to them. They then examine how these trade policy responses, as well as U.S. efforts to address what were perceived as underlying causes of the imbalances, influenced the evolution of the international trading system. Finally, the authors compare the macroeconomic conditions associated with the bilateral trade imbalances and their implications for the conclusions of the two episodes.

Balance of concessions --- Bilateral trade --- Comparative advantage --- Competitive advantage --- Concessions --- Currencies and Exchange Rates --- Currency --- Domestic industry --- Economic Theory and Research --- Export Growth --- Exporters --- Exports --- Finance and Financial Sector Development --- Foreign technology --- Free Trade --- Import markets --- Industrial policy --- International agreements --- International Economics & Trade --- Law and Development --- Market access --- Public Sector Development --- Reciprocity --- Terms of trade --- Trade Law --- Trade policies --- Trade Policy