Japan has been Alaska’s number one international trading partner for decades. The history of Alaska/Japan relations in the last 50 years is one of natural partners. Japan has made significant direct investment or promotion of the seafood, forest products, energy and international aviation sectors. In this complimentary relationship, Alaska provides natural resources and energy to the island nation.

During 25 years of public service, Governor Murkowski has been committed to creating an attractive and stable development environment for international investment across Alaska. The Pogo Gold Mine is a good example of his interest and expertise in international relations and the resulting benefits for the state. While on a trade mission to Japan in 2003, the Governor hand delivered the Environmental Impact Statement for Pogo Gold Mine to Sumitomo Metal Mining’s headquarters in Tokyo. In 2004, when mine construction halted temporarily at Pogo, the State of Alaska Department of Natural Resources actively helped negotiate an agreement between Teck-Pogo and the Alaska Environmental Center which restarted construction work. The mine, a joint investment by Japan’s Sumitomo Corporation and Sumitomo Metal Mining and Canada’s Teck Cominco will generate up to 700 construction jobs and 360 full time positions in Alaska.

Alaska exports to Japan increased to nearly $1.2 billion in 2004, a jump of over 15 percent from 2003 totals. Japan’s markets continue to be critically important to Alaska exporters. Some Alaska seafood and forest products once shipped directly to Japan are now entering third countries for storage or reprocessing before reaching final markets in the country. Still, Japan accounts for nearly 40 percent of the state’s direct exports in 2004.

Alaska’s seafood exports to Japan reached $739 million in 2004, up 16 percent from $637 million in 2003, the highest amount in seven years. Seafood exports to this key market have ranged from $500 million to $700 million in the past few years. Several factors may contribute to the positive increase. Japan’s economy has been trending slightly upward for the past three years, growing around two percent in 2004. Alaska production in many major species has increased and harvesting technology has advanced. Some traditional sources of seafood for Japan markets, such as Russia, have had reduced stocks. Japanese consumers are increasingly attentive to issues of food safety, traceability and natural and healthy food sources and the Japanese government has increased its focus on its labeling and agricultural standards requirements.

Alaska’s forest products exports to Japan decreased to $56 million in 2004. Low forest products prices globally, changing trends in Japanese construction, and the closing of sawmills in Japan as a result of competition from China mills affect Alaska’s exports. In the past few years, Japan moved from the world’s first leading market for wood to third.

The administration has sought relief in several ways for Alaska’s forest products industry which has undergone rapid changes in the past ten years. The Governor announced a plan in the summer of 2004 to make state timber sales available to supply southeast Alaska sawmills in Kethikan, Wrangell and Klawock; to encourage the Mental Health Trust to make timber on its land available for sale; and to find uses for mill byproducts.

Alaska’s exports of energy to Japan, consisting of natural gas and petroleum products totaled $300 million in 2004, up 25 percent over the previous year. Liquefied natural gas export accounted for $139 million of the $300 million. The current gas contract for shipment from Alaska’s Kenai Peninsula terminal runs through 2009 and is a successor to the agreements which have existed since 1969. Japan is seeking to convert some of its oil and coal power plants to natural gas and is also considering expansion of its natural gas pipeline systems. The Japanese government has begun to gradually deregulate the natural gas industry. Most of Japan’s natural gas comes from southeast Asia; Alaska’s exports of LNG account for two percent of the country’s supply.

Mineral exports to Japan of zinc and lead ore have ranged from $45 million to $95 million in recent years. Japan continues to import increasing amounts of minerals; the number of metal mines in Japan has declined significantly in the last 30 years. In 2004, the ore export to Japan totaled $73 million, compared with $56 million in 2003 and $96 million in 2002.

Japan remains Alaska’s number two international visitor market with 12,000 travelers per year.

The lumber and pulp mills in southeast Alaska came into being in the 1950’s because of Japan and the Alaska Pulp companies. The 1960’s saw important developments between Japan and Alaska beyond these initial forest products investments. Japanese businesses with interests in the state founded Alaska Kai, an association to promote trade with Alaska, in 1963. In 1965, the State of Alaska stepped forward and became the first state to open a trade office in Japan. Shortly after, Japan became the first foreign country to establish a consular presence in Anchorage.

The world’s first liquefied natural gas shipments were pioneered in 1969 from Alaska’s Kenai Peninsula terminal to Japan and continue today. Also in 1969, a joint venture between Mitsubishi Gas Chemical Co., and Union Oil created an ammonia and urea fertilizer factory in Kenai, which is now owned and operated by Agrium. Japan participated in the building of the Alaska oil pipeline by supplying 500,000 tons of steel pipe.

Japanese corporations like Nippon Suisan, Maruha, Marubeni and Nichiro have invested significantly in Alaska’s seafood industry for many years. An interesting development in 1998 occurred when the Japanese government contributed $20 million towards the construction of the International Arctic Research Center at the University of Alaska Fairbanks. The Center studies a wide array of arctic issues, including global climate change.

Today’s ties are more diversified than ever. The list of investments in Alaska remains long, from seafood to mining, international aviation and the Alyeska Resort. Japan maintains a fulltime consulate general in Anchorage, headed by Consul General Akihiro Aoki. The Consul General maintains an active schedule in Alaska -- he frequently participates and contributes to events around the state.