The Structural Impediments Initiative: An Example of Bilateral Trade Negotiation

In June 1990, the governments of the United States and Japan concluded the Structural Impediments Initiative ("SII"), a series of bilateral trade negotiations. The SII came about as a result of a large trade imbalance between the two countries in favor of Japan, which, despite many efforts, the United States and Japan had been unable to reduce. It was the U.S. government's perception that the real cause of the trade imbalance was not Japan's protective border measures in the form of tariffs or quantitative restrictions, such as import quotas on agricultural and leather products, but rather the oligopolistic industrial sector in which large companies linked together by stock-holdings and interlocking directorates exclude outside parties from transactions. This perception on the part of the United States was what initiated the SII.