Nebraska, Indiana Enjoy Thriving Economic Partnerships with Japan

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by Kim Meihua Roy
In 1988, Subaru opened an automobile assembly plant in Lafayette, Indiana; the facility achieved “zero-landfill status” in 2004 and does not produce any waste. Subaru is one of several Japanese automakers that invests heavily in the Midwestern United States. Image courtesy of Subaru of Indiana Automotive, Inc.

In September 2016, government leaders and company executives from 10 US states participated in the 48th Annual Midwest-US Japan Association conference held in St. Louis, Missouri. The Association’s purpose is to promote trade and investment between Japan and the American Midwest. Of the 10 states, five sent their governors as part of official delegations that showcased state industries to Japanese investors with the intent of deepening business ties. Governors from Missouri, Illinois, Nebraska, Michigan, and Wisconsin were in attendance, as was the governor of Japan’s Saitama Prefecture. Among the 10 US member states, only Nebraska and Indiana count Japan as their top trading partner in Asia, while China takes the top spot with the others.

In addition to being its top export destination in Asia, Japan is also Nebraska’s third largest trade partner globally. In 2013, Nebraska’s goods and services exports to Japan totaled $1.1 billion. Most of these goods were food and agricultural products, as Japanese consumers are particularly fond of Nebraska's beef. From 2014 to 2015, the value of Nebraska’s exports to Japan increased 8.2%. Furthermore, Nebraska’s top foreign investor is Japan. In 2012, the Cornhusker State had 15 Japanese majority owned firms that provided jobs for 4,000 local people. One such example is Japan’s Kawasaki Motors, which sited America’s first foreign vehicle manufacturing facility in Lincoln, Nebraska. Their manufacturing team is currently producing new railcars to replace the aging fleet of the Washington, DC metro rail system. Kawasaki continues to invest millions in its Lincoln facility; it recently announced a new aerostructure assembly line that will commence operations beginning May 2017.

Like Nebraska, Indiana’s top global trade partner after Canada and Mexico is Japan. In 2013, Japan imported $2.5 billion worth of goods and services from Indiana. Exports to Japan directly or indirectly supported 14,460 local jobs that year. The value of Indiana’s exports to Japan increased 3.2% from 2014 to 2015. Japanese direct investment also strengthens Indiana’s job market. In 2012, Japan had 90 majority owned firms in the Hoosier State that provided 41,500 jobs. From 2010 to 2012, Japanese MNEs (majority-owned bank and nonbank US affiliates) created more jobs in Indiana than in any other US state. Some prominent Japanese automakers with assembly plants in Indiana are Subaru, Toyota, and Honda.

Kim Meihua Roy is a Research Intern at the East-West Center in Washington and a student at Brigham Young University.