Auto imports: biggest roadblock in US-Japan relations
The single most acrimonious and emotion-rousing issue in US-Japanese relations this year is the automobile. Specifically, it is Japan's steadily increasing share of a disastrous American auto market that causes rising temperatures in Congress and angry exchanges over who is to blame.Skip to next paragraph
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President Carter's visit to Japan for the late Prime Minister Masayoshi Ohira's funeral July 9 will not include cars as an agenda item, in so many words. But with a quarter million auto workers out of work, as well as nearly half a million in related industries, the subject is obviously much on Mr. Carter's mind.
Japanese trade and foreign ministry officials are anxious to defuse an issue that could severely damage transpacific relations during an election year. They are very conscious that the Republican Party convention is meeting in Detroit July 14 and that the outlook for the Us car industry during the second half of this year seems bleaker than at any time since the Great Depression of the 1930 s.
But if there is emotion and anger on the US side, there seems to be an equal measure of strong feeling on this side, and it is not restricted to car manufacturers.
"After the first oil shock, it was clear all developed nations had to get more fuel-efficient cars," said an official of Japan's leading economic and industrial association. "The Japanese car industry moved in this direction. The American car industry took its time. When the second oil shock -- the Iranian crisis -- struck, the American car industry was caught unprepared. You cannot blame the Japanese for that."
This official and others concede that the Japanese car industry would be in a stronger position vis-a-vis the United States if it were manufacturing cars in the US, as Volkswagen is doing, or if it were importing a substantial amount of US-manufactured car components, or if American cars had more of a market in Japan.
None of these things can be done quickly, however. Meanwhile the problem of Japanese car imports is acute. Japanese imports are currently said to account for more than 22 percent of the depressed US car market. Whereas even mighty general Motors has gone into the red, Toyota continues to earn a handsome profit and expects that by year's end it will have surpassed its target of 3.3 million cars produced during calendar 1980.
The only immediate measure that can be taken is for Japanese manufacturers to limit exports to the United States, either voluntarily or as the result of government-imposed restrictions.
So far the US has been reluctant to embark on government-to-government negotiations to restrict Japanese auto imports, because of its traditional commitment to freer world trade. Voluntary restrictions must also be handled carefully because of antri-trust legislation both in the United States and Japan.
What the Japanese government has begun to do is to ask individual manufacturers to restrain exports to the United States -- starting with an appeal to Toyota June 30.
(Reuters reports that seven leading Japanese automakers agreed Wednesday to clarify their stand on car imports at a hearing before the US International Trade Commission. The group also decided to strengthen a public campaign in the US in support of Japanese car import policies.)
If the surge in Japanese car exports to the United States is a temporary phenomenon -- a filling of the gap until US car manufacturers turn in earnest from large cars to small ones -- the issue eventually may fade away, as did the no-less-acrimonious textile dispute of the early 1970s. (in the earlier squabble, Japanese textiles themselves were overtaken by cheaper textiles from newly industrialized countries such as Hong Kong and Taiwan.)
But if, as US automakers seem to fear, Japanese small cars get such a grip on the US market that American manufacturers fail to obtain the market share they feel they deserve, both sides will have to look for more fundamental solutions. And in the overheated political climate of an election year, these are difficult to find.