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Cartels for US exporting? Japanese ready to help

If Japan can do it, why not the United States? With that philosophy, congress is considering legislation for the establishment of exporting companies modeled along the lines of Japan's highly successful general trading companies, "Sogo Shosha."

The Japanese see this as a welcome development.In fact, they are quite willing to become America's teachers.

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Possible assistance was discussed at a recent executive meeting of the Japan Foreign Trade Council, a private group of traders and manufacturers that makes recommendations to the government on trade and related matters.

Yoshizo Ikeda, chairman of the Mitsui trading conglomerate, said that the Sogo Shosha "are prepared to offer their management know-how through a capital linkup with the American exporting firms."

Foreign Minister Masayoshi Ito was instructed to take that message with him on his current US visit.

Mr. Ikeda's offer is seen as the latest in a series of Japanese moves to remove areas of friction in bilateral trade relations by helping US private industry regain competitiveness at home and abroad.

But the Japanese see two major problem areas.

First, US opinion is divided on the basic question of whether the legislation now before Congress is needed. Champions of freer trade, for instance, are at best skeptical as to the wisdom of organized export promotion through what would be virtual trade cartels.

Second, ever since world War II, the US has acted bery much as Japan's big brother, or even father. It might be upsetting suddenly to become the junior partner.

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If the way is opened for Japanese investment in the proposed exporting companies, observers feel a new page will have been turned in the history of American foreign trade.

It will also mark a milestone in the evolution of the Sogo Shosha, which have developed rapidly in the past century and are credited with much of the credit for Japan's postwar economic "miracle."

US critics of the proposed trading companies have argued that they are in some ways uniquely Japanese and therefore not suited to Western conditions. The Japanese are a bit bemused by this. They have always believed they borrowed the idea from the West in the first place.

When Japan opened its doors to the outside world again in 1867 after two centuries of isolation, there were practically no local trading operations of any significance.

In 1876, for example, when two-way trade was relatively minuscule, 95 percent of it passed through British, Dutch, and other foreign traders established in ports like Yokohama, Kobe, and Nagasaki.

The Sogo Shosha really came to dominate the trading picture only after World War II. In 1979, they handled roughly half of all Japan's trade, accounting for more than $100 billion.

Their role in trading, financing, and gathering information enabled Japan to achieve world status in a remarkably short time. Even a medium-size trading company like Nissho Iwai now has offices in more than 120 cities throughout the world, acting almost as unofficial embassies.

The trading giants no longer simply buy and sell, however. Increasingly, they are putting together consortia for major international contracts, say in construction, in which, through, say in construction, in which, through their intimate links with banks and big business, they can easily provide the cash, know-how, and materials.

It is seriously doubted in Japan that the proposed American trading companies would want to go that far. After all, the Sogo Shosha are as the much engaged in imports as they are in promoting Japanese products overseas.

Japanese traders feel they could be of significant help to the Americans in setting up exporting companies. The big question remains, however: Are the Americans willing to listen?

Many Japanese have their doubts. They cite the example of "Japan as Number One," a book written by Harvard Prof. Ezra Vogel pointing out that there were many things in Japan from which Americans could learn. But, ironically, the book became a best seller in Japan, not in the US.

Hokaji Mino, editor in chief of the monthly magazine Business Japan says: "The Americans are not good at learning from other countries; the Japanese are best at it.

"I think this is because the US in its short history has up to now led the world in terms of wealth in resources, technology, and economic strength. The Americans have been proud and confident of the fact that they are number one in everything in the world.

"That is why they believed that, rather than learning from some other country , they could lick any problem by selecting the most suitable method from their store of knowledge and applying it most effectively. This they were able to do in the past . . . . But in 1980 the American way is not working, and the time has come to swallow [their] pride and learn from others.

"But the fact that Japan has suddenly moved from a relationship of dependency to equality and even superiority in some areas, I think, is a stumbling block in this learning process."

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