For most of the U.S. public, trade relations with Japan are the dominant issue of international economic policy. International debt is the problem of the bankers and may even serve them right; agricultural trade and the European Economic Community (EEC) is a farmers' problem; but the Japanese issue touches not only our sense of national pride but also our jobs. The future growth of world trade depends more on how the United States comes to perceive its trade with Japan than on any other issue.

The question of how to manage U.S.–Japanese trade relations comes on at least two levels. The first level is one of ascertaining the facts. Does Japan take unfair advantage of our open market while closing its own? Many, perhaps most, Americans believe this, though few economists would agree. I will take it as a working assumption in this that the perception of Japan as a villain is at least 95% wrong. Even a brief review of the evidence explodes most of the myths that continue to circulate in U.S. discussion. While there is room to criticize Japan, the idea that Japan is pursuing beggar-my-neighbor policies on a grand scale is essentially preposterous. Nonetheless, many influential Americans believe it.