The focus of America’s business interests in Japan has changed from “trading with Japan” to “doing business in Japan,” according to a biennial report released Wednesday by the American Chamber of Commerce in Japan.

The ACCJ meanwhile urged Tokyo to further liberalize Japanese markets, especially in telecommunications. The report specifically calls for more competition among the group companies of Nippon Telegraph and Telephone Corp., the country’s dominant telecom carrier.

Reflecting changing U.S. corporate interests here, the latest report bears the title “2001 U.S.-Japan Business White Paper,” instead of “U.S.-Japan Trade White Paper,” which has been used since the 1970s, ACCJ President Robert Grondine said at a news conference.

More and more U.S. companies have come to do business in Japan over the past five years as a result of the inflow of direct investment following financial deregulations, economic globalization and corporate restructuring, Grondine said.

“This has provided an increasing number of American companies new opportunities to operate in the market as domestic businesses — what we refer to as being ‘inside the castle.’ ” Grondine said. “U.S. businesses have gone from primarily trading with Japan to doing business in Japan.”

In contrast to the traditional approach to removing trade barriers by applying “gaiatsu,” or pressure from outside Japan, American companies are increasingly participating directly in the Japanese policy process and can become a part of “naiatsu,” or domestic pressure for change, according to the report.

The American business community in Japan promotes changes through the exercise of both external and internal forms of advocacy, which can be called “nai-gaiatsu,” according to the report.

Also, the report calls for policy changes in three priority areas to pull Japan out of its economic slump: the promotion of information technology, the improvement of corporate governance and liberalization of financial markets, and the full use of market mechanisms to cope with the country’s aging population.

Specifically the report recommends reducing telecommunications costs through competition policies and facilitating electronic commerce through regulatory reforms.

The report calls for swift legal revisions to improve corporate governance and promote labor mobility. It also recommends Japan deregulate the health and home care industries and upgrade services in these sectors through market mechanisms.

The report consists of a section providing overall policy review and a section analyzing individual market sectors and cross-cutting structural issues, ranging from food to labor mobility and foreign direct investment.

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