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Japan's voluntary car quotas

It may have been a mere statement of trade policy by Japan. But looked at in purely political terms it set off sharp criticism in Congress. We are referring to the remark of an official of Japan's Ministry of International Trade and Industry (MITI) that Japan will not extend its voluntary quotas on auto exports to the US beyond 1984. Japan would seem best served by rethinking its position.

The issue is not one of imposing excessive trade restrictions on Japanese products, in this case automobiles. It is just the opposite - avoiding actual restraints on trade, such as embodied in domestic content legislation now before Congress. Such legislation would require that Japanese cars have a high percentage of US-made parts before they could be sold in the US. A domestic content law passed the House late last year and proponents have cited Japan's decision to end voluntary curbs on car exports as proof that such a measure should be enacted into law.

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Is Japan's stance on ending the curbs merely a bargaining position? That could well be the case. But Japan must realize that with the US now gearing up for an election campaign, and several Democratic presidential contenders already supporting domestic content bills, this would not seem the most propitious moment for taking a tough line toward the US regarding car sales.

After a particularly difficult period for Detroit the past year domestic sales are at last starting to perk up. US factories are being reopened. Auto workers are being called back. Thus it seems indelicate for Japan to announce suddenly that it is going to return to business-as-usual with its exports to the US, especially since it has accepted restraints on various products sent to a number of European nations.

Japan currently enjoys a trade surplus of roughly $20 billion with the US. It seems only fair that there be some bending in the case of autos. Sen. Gary Hart, who is himself a Democratic presidential aspirant (though not supporting the domestic content bills), last week introduced a reasonable joint resolution that would urge the administration to negotiate an extension of the quotas for two years to give Detroit a breathing period following the recession. Senator Hart would also link future exports to the US economy so that, if the economy became constricted, Japan would have to reduce its exports.

Is Japan listening?

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