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Outside Washington, a calmer look at US-Japan trade issues

Mounting budget deficits. Resistance to budget trimming plans. Concerns over growing imports. No agreement on tax reform. Sound familiar?

They are a list of problems Japan faces at a time when the United States Congress is getting increasingly irritated at Japan over trade.

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But quick change is not easy for Japan, which has a number of US-type problems, according to experts on Japan who gathered here May 9 and 10.

Japan exports more to the US than the US exports to Japan. And that gap has been growing. Congress wants retaliatory action unless Japan does something quickly to change this.

Even if Japan met all US demands regarding trade, the US-Japan trade gap would still be sizable. And even if there were no trade gap at all with Japan, the US would still have a big world-trade deficit.

Away from the heated discussions in Congress, the American and Japanese experts here offered insights into some of the challenges Japan faces as US pressure on that country increases.

Japan is likely to ``loosen up'' further its resistance to narrowing the US-Japan trade gap, says John Campbell, director of the Center for Japanese Studies at the University of Michigan. But, he adds, it may take Japan so long that by the time the changes are made, ``Washington will forget the specifics'' demanded of Japan.

As in the US, arriving at new national policies in Japan is ``a long, slow process,'' says Dr. Campbell.

Japan has already ``given in on almost all'' of the earlier US demands regarding trade, Campbell says.

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The US trade gap with Japan, which is growing in Japan's favor, was about $37 billion in 1984 out of a worldwide US trade deficit of about $123 billion.

Trade was a key focus of the conference here at Oglethorpe University, sponsored by the Southern Center for International Studies, based in Atlanta. A number of the participants carried business cards written in English on one side and Japanese on the other.

One of them, Chris Noll Jr., suspects Japan is dragging its feet purposely on trade issues with the US. Mr. Noll, former Far East personnel director for IBM, cited a past example of a 10-year delay in granting a US chemical company permission to build a plant that was more advanced than what the Japanese had.

Campbell agrees there is a Japanese ``strategy to delay'' on trade concessions, but says it is not a strategy of top government leaders. Instead the strategy is pursued at lower levels of the bureaucracy, which have much more independence than in the US, he says. The top leaders of Japan ``would like to go much faster on these issues that bug Americans.''

Noll, who now teaches Japanese and other management courses at the University of Georgia, points to another issue in Japan. Just as some US auto workers and others urge a ``buy-American'' theme in the US, Noll says `` `buy Japan' is a sentiment over there'' among some Japanese.

Kiyohiko Fukushima, a Japanese economist working in Washington, was a staff economist for the United States-Japan Advisory Commission, which issued a report in September urging both governments to help reduce the trade gap. He sees ``interdependence'' growing between the US and Japan as Japanese companies increase their investments in the US.

He also sees a growing confidence among Japanese manufacturers that they are equal to or ahead of the Americans in technology.

``In new technologies, Japan has been gaining a competitive edge,'' he said here.

Meanwhile Japan has an eye on its own growing imports. In Japan, ``if you buy underwear or socks, the chances are [they are] made in Korea,'' said Mr. Fukushima. And Campbell says Korea could sell more cars to Japan -- if Japan allowed it.

Writing in the Journal of Japanese Trade & Industry earlier this year, Japanese economist Isamu Miyazaki said Japan's trade barriers are much lower than is generally recognized. Japan's tariffs ``are among the lowest in the industrialized world in terms of ratio of revenue to total import value,'' he wrote.

But, he added, Japan should further reduce some import restrictions, especially against certain agricultural items. -- 30 --

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