Cultivating a Japanese taste for US goods
Of the two mightiest free world economies -- the United States and Japan -- which is more productive in terms of worker output? "American workers," says Bill Brock, "produce considerably more than any [ other] workers in the world, including Japanese."
Why, then, do Japanese goods flood the US, giving it a multibillion-dollar trade deficit with Tokyo?
"Japan," said Mr. Brock at a breakfast meeting with reporters, "carefully targets certain industries, pumps in investment, and surrounds them with protectionism until it is ready to unleash them on the world."
As President Reagan's chief trade negotiator, Mr. Brock wants to break down those barriers -- beginning in the field of semiconductors, the tiny chips essential to computers and other high-technology apparatus.
Japan, says Brock, has a healthy, competitive semiconductor industry. So does the US. But Japan's tariffs on semiconductors are twice as high as those of the United States.
So American semiconductors find the Japanese market partly -- and, in the US view, unfairly -- blocked.
During his Washington visit, according to Brock, Japanese Prime Minister Zenko Suzuki agreed "in principle" to hasten the mutual reduction of tariffs in semiconductors.
Brock and other Reagan administration officials want more than this -- specifically, a standing bilateral commission of some sort of identify, discuss, and settle US-Japanese trade issues before they blow up into a storm, as was the case with autos and, before than, color TV sets.
Again, Mr. Suzuki promised to give this matter "serious attention," but no commitment, Brock says.
On tariffs generally, he says, the Japanese -- like the US and other industrial powers -- are dismantling tariff barriers and by 1987 will have virtually none.
That, however, would be too late for US semiconductors and, in any case, nontariff barriers cause the most damage the US exports to Japan, in Washington's view.
When the Japanese want something -- like American soybeans -- there is no problem. Tokyo's market is wide open.
But in "sensitive products" -- that is, where Japan wants to protect home industries -- the situation is different.
High-grade US beef, oranges, tobacco, rice, semiconductors, automobiles -- all these run into barriers that effectively restrict their competitiveness in Japan.
Some American goods wait too long on Japanese docks.Others, says Brock, "find it very very difficult to break into the [tightly controlled] Japanese distribution system." American investment in Japan's fast-growing technology fields is discouraged.
Another US official described a talk with his Japanese counterpart about American sales of tobacco to Japan.
"You have only 1 percent of our market," the Japanese official told him, "because in Japan, tobacco is a sensitive product."
"I see," said the American. "Are you enunciating a new principle, that on sensitive goods we should have only 1 percent of each other's markets? That would apply to Japanese cars."
The Japanese, said the American, "visibly paled." But the barrier against US tobacco remains.
Japanese experts sometimes claim that American exporters fail to tailor their goods to Japanese tastes and needs -- a claim that some American officials support.
"Until we decide," says Brock, "to go into Japan hard -- with US businessmen willing to go over there and sit and make investment [of time and effort, as well as money], as we have done in Europe for many years -- we will not succeed. We cannot expect the Japanese to do it all by themselves."
Given determined effort by American businessmen and a more open Japanese market, the US trade chief foresees a better future:
"I can't think of an American product line," he says, "that could not sel l more in Japan, if it were given the opportunity."