Japan moving slowly to placate Western trade partners
Tokyo — ''The Japanese market should be as open to American business as the American market is to Japanese business,'' says Lawrence F. Snowden, president of the American Chamber of Commerce in Japan.
The actual openness of the Japanese market is a matter of at times acrimonious dispute. But the bluff, big-shouldered Mr. Snowden, vice-president for the Far East of Hughes Aircraft International Service Company, voices a concern that is widely shared, not only by American but by West European businessmen.
Shintaro Abe, Japanese minister of international trade and industry, has just attended a trilateral meeting in Key Biscayne, Fla., among North American, West European, and Japanese trade ministers.
The meeting pledged to try to preserve the world's free trade system and not to fall into protectionism. But Japan came under concentrated criticism from its North American and West European trade partners for the enormous trade surpluses it has built up during the past year - $18 billion with the United States and $ 11 billion with the European Community.
Mr. Abe repeated pledges made earlier by Prime Minister Zenko Suzuki that Japan would take ''drastic action'' to reduce nontariff barriers. But apparently he could not dispel the widespread feeling both in Western Europe and in the US that Japan's trade surpluses are ''structural,'' that the Japanese economy is organized in such a way that it is easy to export and difficult to import - in other words, that as far as Japan is concerned, free trade is a one-way street.
Responding to this criticism, Japanese government officials are putting the finishing touches on a group of measures easing nontariff trade barriers. On Jan. 31, Japan's Council of Economic Ministers will meet to vote formally on a package that would remove or ease 67 of 99 nontariff barriers cited by the US and the European Community. In addition, the country would create an office of trade ombudsman to speed handling of trade complaints by foreign companies.
But Prime Minister Suzuki told reporters in Tokyo that the new program would have a gradual effect.
Japan has already acted to lower duties. The nation, once one of the most heavily protected markets in the world, has progressively reduced duties during the past decade and today compares favorably among the industrialized Western nations.
But nontariff barriers are another story. What is a nontariff barrier? Again, definitions vary. ''Every country has regulations not directly tariff-related that has to do with protecting the consumer, or distressed industries,'' said Mr. Snowden in a recent interview here. But if testing requirements and health and safety standards require something of foreign businesses that is not required of Japanese businesses, that, in Snowden's view, is a nontariff barrier.
One recent case publicized in the press concerned baseball bats. No American manufacturer could sell baseball bats to the lucrative high school market in Japan, because the Japanese high school baseball association had a rule that said only bats certified by the association could be used in high school contests. And the association would not certify American bats.
That particular nontariff barrier has been surmounted, Snowden said, and starting next year American bats should be able to appear in Japanese high school competition.
Much more complicated rules crisscross nearly every aspect of Japanese society. The most irksome, to foreign businesses, are the rigorous tests required of new products and very stringent health, safety, and environmental regulations. ''We are not asking that standards be lowered to accommodate American businesses,'' said Snowden. ''But the standards must be reasonable. If Japanese standards are more stringent than elsewhere, we must be convinced of the reason why, or we'll feel we're being shut out again.''
Pharmaceutical companies feel these barriers particularly strongly, Snowden said. In some cases, to get a new product accepted, they must supply exhaustive information and submit to lengthy testing by Japanese pharmaceutical associations, so that ''by the time clearance comes through, a company may not have any proprietary information left.''
Prime Minister Suzuki has ordered that, of 51 identified nontariff bariers, at least half be done away with. One problem is that nontariff barriers are not easy to identify. When extremely frustrated, as was US Commerce Secretary Malcolm Baldrige on one occasion, the entire Japanese social structure and cultural pattern can come to appear as one enormous nontariff barrier. In such cases the demand becomes one for social and cultural change.
Many Japanese recognize that ultimately changes must come in the way their society is organized. This is not a matter of months or of years but of decades, and cannot come about purely as a matter of foreign pressure.
Snowden makes no such sweeping demands. He does believe that the pace of dealing with nontariff barriers must be stepped up considerably, and favors creation of the trade ombudsman office the Japanese government plans to create.
Getting rid of every identifiable nontariff barrier will probably not make a significant dent in the Japanese trade surplus, at least in the short term, Snowden believes. But if the changes the Japanese government makes prove effective, it will help to change the almost universal Western perception that Japan is basically unfair, that its people and government do not do unto others as they would have others do unto them.