Abstract
The fact that Japan has had a surplus on its balance of trade for so long has often been advanced in popular debate as an argument for that country’s protectionism, although it is irrelevant. Just as many countries have a deficit, it follows that others must, necessarily, run a surplus. Although providing a theme for consideration, past trade practices of Japan in the 1930s are not germane. Studies based on macro-economic data do not provide ammunition for those anti-Japanese sentiments in trade matters that some feel compelled to cherish. Although the relationship between Japan’s Gross National Product and its imports is low compared with other countries and between imports and income per capita has decreased, whereas in other countries it has increased, such facts — and studies using them — are inconclusive ... simply, because no country seems to be comparable with Japan.1
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Notes Chapter III
Lincoln (1990), p. 15. The list seems to be small, but it contains a great variety of products and measures. Should, however, non-approval a Compact Disc player with high-frequency signals enabling cordless earphones be considered to be a non-tariff barrier, if the set is not in accordance with Japanese norms? It appears to be if a Japanese competitor would get approval and the foreign owned would not. The barrier is substantially more subtle if another high frequency is approved which is not the specification of the foreigner’s set, but of the Japanese competitive one. Another more subtle outcome would be that the approval will be given when one or more Japanese have developed competitive CD players. Their market coverage will be more substantial and the competitive edge of the foreigner has disappeared.
A theory supported both by Japanese and Americans. Bergsten and Cline (1985) have adopted this view. Lincoln (1990) p. 25 refers to the analysis of Eguchi and Matsuda, who also hold the view that Japan’s lack of natural resources requires it to import raw materials instead of processed products and export products with added value.
Done, Kevin: “Car maker’s European strategy, Nissan may export cars to Japan”, is the heading of a report by the Financial Times’ Motor Industry Correspondent, in its edition of February 2, 1990. The car is seen as the competitor of the Opel Vectra and the Ford Sierra, as well as Volkswagen’s Passat.
Bergsten and Cline (1985, rev. edition 1987), p. 59. The argument that Japan does not protect itself because it would not need it, is a very common form of circular argumentation. For instance: “What is exactly the problem of Japan’s foreign sector. Simply the fact that Japan’s foreign trade is more than any other Western country based on the application of comparative advantages and disadvantages.” (Directoraat-Generaal voor de BEB: Japan, October 1991). This is belief in economic phraseology.
Commission Regulation (EEC) No 2684/88 of August 26, 1988, imposing a provisional antidumping duty on certain imports of video cassette recorders originating in Japan and the Republic of Korea, No. L 240/12.
Robert C. Feenstra (1985), pp. 333–335. The Japanese VER began in April 1981 with a limitation of 1.68 million. The agreement was supposed to expire in March 1984, but as a result of American pressure, the ceiling was raised to 1.85 million. The limit has been set at 2.3 million annually for April 1985-March 1987. The Japanese have upgraded their cars and, of course, their prices.
Ian Rodger: “A Challenge to the Enigma”, Financial Times, January 8, 1990: “For example the revisionists make a lot out of that peculiar group of Japanese academics devoted to Nihonjinron, the study of ways in which Japanese are different from other human beings. The very notion is, of course, absurd because Japanese are not even a race, being a complex mixture of Asian and Pacific basin races”…“The revisionists have blown the whistle on this sort of nonsense, saying in effect, ‘Fine, you say you are different. We accept your argument and therefore we must treat you differently’.” As is clear from the quotations, the nonsense exceeds the “peculiar group of Japanese academics”.
Practically all of Japan’s foreign trade authorities have admitted that there have been, or are - decreasingly - non tariff barriers. See: “Highlights of Government Measures to Remove Non-tariff Trade Barriers”, Journal of Japanese Trade and Industry: No 2, 1982, pp. 10–13, JETRO; “Market Liberalization, Japan puts out the welcome mat”, Business Week, July 23, 1984. In 1986 the Maekawa report confirmed the macro-economic necessity to open the market by elimination of non-tariff barriers. For a survey of Japan’s non-tariff barriers see: Pape (1990).
Financial Times, September 4, 1986: “Japanese ski makers freeze out the opposition.” Two quotes form the article: “It [the new standard] had subsequently been approved by the senior officials at the Ministry for International Trade and Industry,” And: “[A MITI] official yesterday said it has ”no influence“ on the CPSA, which is an industry association!’ Such behaviour - to approve something and later explain that it is an industry matter on which they have no influence - is not expected from Western civil servants. As will be shown, this peculiarity of Japanese officialdom happens frequently: influence without token responsibility.
GATT: “Panel on Japanese Measures on Imports of Leather”; Report of the Panel adopted on 15/16 May 1984 (L/5623).
Modern ski boots had been developed in Italy: Porter (1990), p. 162.
GATT publications do not mention this affair. Its reports on the subject have remained restricted. In the early 1970s, the duty on ski boots was increased to over 28%. This matter will be outlined in greater detail in Chapter X.
Japan External Trade Organization (JETRO), a private branch of the Ministry of International Trade and Industry, regularly communicates the successes of companies in the Japanese market. In 1982, MITI distributed a list entitled: “Typical Foreign Products Holding a High Market Share in Japan”. Adidas, Puma and Nike had a market share of 16% altogether, of which 90% was locally made in Japan. The ski imports had a share of 30% of the market, The Japan Times, March 17, 1982.
Consumer products which are successful on the Japanese market are mostly those in sectors in which the retailer autonomously composes his range: sports and camping articles, instant coffee, black tea, soup, safety razor blades. Source: McMillan, (1985), pp. 247–249.
GATT: “Trade Policy Review Mechanism, Report by the Secretariat”; Geneva: C/RM/S/8A, July 4, 1990.
GATT: “Trade Policy Review Mechanism, Report by the Secretariat’; Geneva: C/RM/S/8A, July 4, 1990: note 7.
Higashi and Lauter (1987). The survey is “Imports in Daily Life”; Tokyo: Prime Minister’s Office, 1985.
McMillan (1985), pp. 248–250 emphasizes the importance of after sales service or necessary exclusivity of outlets as a means for the manufacturer to encompass the marketing function.
The Financial Times, February 11 1992. LDP leaders are reported to be hoping to limit the foreign share of Japan’s rice market to between 3 and 5%.
Financial Times, July 15. 1991. Even American rice for a food exhibition caused a row and the threat that the electricity of the American stand would be turned off, if the exhibition of banned rice were to continue, according to The Economist, March 23, 1991. Rice prices are maintained at a level which is 6 times the price of American rice, The Economist, May 2, 1987.
United States: Agricultural Adjustment Act; Decision of 5 March 1955. Basic Instruments and Supplementary Documents, 3rd Supplement, p. 32.
JETRO, a private branch of the Ministry of International Trade and.Industry, MITI (1987), Keidanren (Japan Federation of Economic Organizations) Review: “How We Succeeded in Japan”, special issue 1986. JETRO (1983). MIPRO (1985).
Some quotes are elucidating: “Business practices which place a high value on human relationships tend to raise entry costs. This applies equally, however, to Japanese and foreign companies trying to enter the market.” [The Japan Chamber of Commerce: “Distribution System and Market Access in Japan, 1989, for Promoting Better Mutual Understanding; Tokyo: The Japan Chamber of Commerce and Industry, June 1989, p. 18. And, p. 23: ”For low-priced products, the consumer demands the cheapest possible price, while for more expensive products, the trend is toward greater interest in the aesthetic value of the product.“ And as if there were not a serious contradiction with the former statement, p 29: ”An Actual Success Story, Passenger cars. By lowering prices, the company was able to attract a sizeable portion of the high-end auto market.“ Hereby BMW has probably been meant.
Japanese External Trade Organization: “The Japanese Import Market”, 1987, p. 31.
The import tax on Scotch is still 50% and excise 200%. Financial Times, May 11, 1990.
Keidanren Review on Japanese Economy: “How We Succeeded in Japan”, Special Issue, 1986 and 1988. Texts on the successes of the companies are identical.
Business Week, July 23, 1884. Apart from IBM Japan, Fuji Xerox, a joint venture, Mcdonald’s, franchising, Coca-Cola, locally made, the nine were: Schick, Procter and Gamble, Nestlé (Swiss), Philips (Dutch), Johnson, Olivetti (Italian), Lefraset, Garrett, Semikron.
“GAIT International Trade 88–89”, General Agreement on Tariffs and Trade, Geneva: 1989.
United States International Trade Commission (1989), p. 29: sales of BMW to Japan amounted to 33,000 units, or “a share in the market of imported cars…of 18%” in 1989. By estimating the car market lower than the Americans did, the BMW marketing managers overseas concluded from his estimate of 180,000 units of imported cars: “Closed? No market is so open like the Japanese.” It is a phenomenon which sales managers and trade negotiators have in common: the inexorable necessity of success.
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© 1993 Physica-Verlag Heidelberg
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van Marion, M.F. (1993). Japan, as a Trade Issue. In: van Marion, M.F. (eds) Liberal Trade and Japan. Contributions to Economics. Physica-Verlag HD. https://doi.org/10.1007/978-3-642-46942-8_4
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