Japan's Trade Charges

JAPAN'S criticism of the United States for unfair trade practices brought predictable responses from this side of the Pacific: "People in glass houses," "pot calling the kettle black," etc. And there's no question that the Japanese record provides ample opportunity for such rejoinders.

But the people on the Industrial Structure Council in Tokyo felt the image of Japan as the world's No. 1 trade offender - an image confirmed by opinion polls in the US, at least - had gotten out of hand. Hence their decision to issue their own list of offenders, with the US topping it. Among their indictments, the Japanese bureaucrats specified agreements to limit exports, "buy American" campaigns, and abuses of antidumping rules.

Are the charges substantial? When it comes to the so-called voluntary restraint agreements (VRAs) that limit the quantities of Japanese cars shipped to the US, the answer is a qualified "no." Japan itself chose to extend those agreements after President Reagan offered to lift them back in 1985. Japan's decision, of course, was driven by concerns that Congress might immediately legislate something worse in place of VRAs. So there was an element of political constraint.

"Buy American" campaigns have sprung up in various parts of the US, but it's not clear that such local or state efforts come under the General Agreement on Tariffs and Trade (GATT), to which Japan plans to appeal its case. Tokyo's own "Buy Japanese" tendencies have been seen in such areas as large construction contracts - building a new Osaka airport, for instance - where domestic firms get preference.

The "dumping" question came up recently when the US Commerce Department determined that Japanese manufacturers were selling mini-vans to Americans at below market value. Toyota and Mazda rejected the notion that US carmakers were being hurt when they controlled 88 percent of the market for mini-vans. But the Japanese products had made quick inroads in the last few years. There may have been a touch of politics, at least, in the decision to block those inroads quickly.

These instances underscore the complexity of trade disputes. There are undisputed cases of protectionism - like Japan's exclusion of foreign rice - but the protectionist impulse is universal and deeply rooted in national politics. To the degree that Japan's list of alleged wrongs reminds us of that and renews discussion of ways to make trade freer, it may do some good.

You've read  of  free articles. Subscribe to continue.