Japan's market opening: more rhetoric than real change?
There was much drama yesterday as Japan unveiled its package to open its market to foreigners. But the rhetoric surrounding the event did not dispel the feeling of foreign observers here and in the United States that the measures weren't going to change things overnight.
After hearing details of the package, Vice-President George Bush reportedly said that Prime Minister Yasuhiro Nakasone's moves ``took a good deal of courage. . . . What's important, however, is what . . . happens in terms of access.''
Asked on NBC's Today Show if the measures would head off protectionist measures in Congress, Treasury Secretary James Baker III responded: ``I think what it does show is that at the very top in the Japanese government there's a desire and a willingness to treat the problem and treat it seriously, and see if they can't make some progress on it.''
Yesterday Prime Minister Nakasone appealed directly to the Japanese public to help open the Japanese market and reduce trade frictions for the first time. ``Free trade is a very vulnerable thing,'' Nakasone said. ``Each country thinks it should protect its own industries. . . . We must fight to keep free trade. Please everyone, I ask for your cooperation and understanding.''
The government announced its market-opening package two days before the meeting of the Organization for Economic
Cooperation and Development, when Japanese ministers will be talking with US and other ministers about various international economic issues.
Saburo Okita, a former foreign minister and head of the 10-member advisory committee that compiled the Japan's medium-term policy report, told the press Tuesday that whether or not the foreign countries will continue to criticize Japan will depend on how the Japanese government implements his council's recommendations.
But Mr. Okita also defended Japan's previous market liberalization efforts. He said that previous measures were not as effective because various outside factors -- such as rapid changes in exchange rates and the sudden economic recovery in the US -- offset them.
The new set of economic measures, the seventh to be announced since 1981, consists of two parts. One is the medium-term ``action programs'' recommended by the Okita committee to ease market access for foreign products over a three-year period. The other is a list of more immediate measures that incorporate the results of recent Japan-US negotiations. The four key areas in these talks were telecommunications, electronics, medical equipment, and forestry products.
The Japanese government insisted that its market-opening efforts aren't just directed at the US and promised to lower tariffs on imports from Europe and Asia.
The package includes the following proposals:
The government will implement an ``action program'' within three years to improve market access and sustain economic growth by increased domestic demand. The government will also increase investment and industrial cooperation and help developing countries.
The Japanese government will ask the Japanese public and companies to make their best efforts to import more manufactured goods. The semi-governmental Export-Import Bank of Japan will reduce interest rates on import financing for manufacturers.
Tests for technical standards on telecommunications terminal equipment will be conducted by a neutral, impartial, and independent agency.
In establishing or amending technical standards, the Japanese government will ensure that it will keep interested parties informed of schedules and plans.
Japan will hold further consultations with the US and other industrialized countries about eliminating tariffs on electronic equipment.
Japan will accept foreign clinical test data on pharmaceuticals and medical equipment.
The Tokyo government will promote the liberalization of the financial and capital markets as well as the internationalization of the yen.
Japan will set a new medium-term target for the period after 1986 in its efforts to double its official development assistance.
The government will encourage mutual investments to deepen interdependence with other nations and help revitalize other economies.