ABSTRACT
A Ministry of International Trade and Industry (MITI) study group that examined Asia-Pacific cooperation has concluded that such Pacific cooperation is an inevitable development. It emphasized that regional cooperation should be outward looking and should not be aimed at forming a block economy. In the minds of many Americans, the economic threat to US well-being presented by Japan and its Asian neighbors is beginning to displace the military threat of the Soviet Union. The Japanese also see the world dividing into trading blocs. Economic integration in the European Community by 1992 and the Canada-US. Free-Trade Agreement have raised the prospect that Japan and its neighbors could be excluded from these preferential trading arrangements. The gap between the escalating debtor status of the United States and the rising creditor status of Japan implies that Japanese citizens will continue to accrue net income through their overseas investments, while Americans will have to shoulder increasingly burdensome interest payments on their debts.
