How Tokyo views US-Japan trade dispute; Many US firms thrive in Japan's 'closed market'

The key emotive phrase in the US-Japan trade dispute is ''closed market.'' By this, Americans mean the great difficulty they experience in selling to Japan: the virtual impossibility of matching the ease with which the Japanese manage to sell their products in the US because of a host of tangible and intangible barriers.

There are high tariff duties, import quotas, and licensing and inspection procedures that are complicated, time-consuming, and costly; rules so vague they can be interpreted a thousand different ways at the whim of individual Japanese officials; the wasteful complexities of a multi-layered distribution system; and even the problem of communicating in a common language. The list of American complaints seems endless.

The Japanese response: There may, indeed, have been such barriers in the past , but we have been working hard for years to eliminate them. Therefore, these days they can only be a convenient excuse for American businessmen unwilling to put in the same time and effort as their Japanese counterparts in trying to penetrate American and European markets over the past 20 years.

Americans, grumble many Japanese, want to have their hands held. They want to walk into Japan and make instant profits, whereas some Japanese companies have had to wait many years for any return on their overseas ventures, but are now reaping the rewards for that patience.

In fact, a surprisingly large number of American companies are already well established in Japan and doing well despite all the alleged problems. At last count, there were around 1,600, mainly in the chemicals, petroleum, and machinery sectors. Many of the firms, in fact, dominate the market almost to the exclusion of Japanese firms.

For example: In carbonated beverages, the US share of Japan's market is 65 percent; in dry soups, 84 percent; canned soups, 68 percent; plastic foam products, 30 percent; plasticizers, 100 percent; butyl rubber, 100 percent; panel heaters, 50 percent; turbo- chargers, 64 percent; safety razor blades, 80 percent; instant cameras, 45 percent.

American aircraft manufacturers, particularly Boeing, dominate the Japanese market. IBM is a major force in computers, claiming 40 percent of the market for systems costing more than $2 million each (Sperry Rand Corporation has another 12 percent). And there are the profitable food chains - McDonalds, Mister Donut, Denny's, and Kentucky Fried Chicken.

According to Ichiro Yoshikuni, president of the Japan Regional Development Corporation: ''There are now 152 multinational, predominantly American, corporations engaged in successful manufacturing operations in Japan. Based on a comparison of earning ratios, (these) have been far more profitable than operations in Europe.''

A study by the American Chamber of Commerce in Japan supports this: ''Manufacturing in Japan is profitable for US firms. The 18 percent apparent return on investment averaged by US production affiliates between 1966 and 1977 in Japan was double that registered by US affiliates in Britain and France. . . .''

In addition, the report noted that ''the ratio of current profit to total liabilities and net worth and that of net profit to sales are both 50 to 100 percent greater than those of Japanese corporations.'' And this occurred during the era when everyone was complaining about the Japanese market being ''closed.''

Not only is it not closed, but Japanese officials claim they are bending over backward to help foreign companies get established. The Regional Development Corporation's Yoshikuni says: ''Not only is entry into Japan of foreign firms unrestricted, but Japan is actually eager to have more of them.''

Japanese officials also proudly point out that the government's Japan Development Bank is now lending investment capital to foreign businesses here for their production ventures. Thirteen firms received cash last year, nine of them American, and there are another 16 waiting in line at present.

Many Japanese officials feel the US is too emotional, concentrating on the wrong areas and missing very real opportunities that exist for those willing to work hard.

About these ads
Sponsored Content by LockerDome

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...

Save for later

Save
Cancel

Saved ( of items)

This item has been saved to read later from any device.
Access saved items through your user name at the top of the page.

View Saved Items

OK

Failed to save

You reached the limit of 20 saved items.
Please visit following link to manage you saved items.

View Saved Items

OK

Failed to save

You have already saved this item.

View Saved Items

OK