Abstract
The years 1981–1984 were characterized by the interaction of a number of events in both in the United States and Japan which le to a head-on collision over trade matters between the two nations. Foremost among these events was the rapid increase of Japan’s global trade surpluses while the global balances of the United States deteriorated year by year. Table 2-1 shows these trends.
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Notes
See, for example, the Saxonhouse study cited in chapter 1; the Federal Reserve Board of New York, “Japan’s Intangile Barriers to Trade in Manufactures,” Quarterly Review (Winter 1985–86), pp. 11–18, and the most comprehensive current examination of the issue by C. Fred Bergsten and William R. Cline, op. cit. Also, Japan (Paris: Organization for Economic Cooperation and Development, 1985), particularly pp. 39–54.
Japan shows high export and low import income elasticity relative to the rest of the world. High income elasticity for exports has resulted from Japan’s concentration, in commodities and areas that have high demand growth rates. The low income elasticity of imports is caused by Japan’s industrial structure which is geared toward high value added products designed to save resources and reduce imports of raw materials, particularly fuel. Consequently, the percentage of manufactured goods in relation to total imports is low.
All EPA data reported were obtained through personal interviews and from internal working papers in Tokyo, in March and May 1986.
The Japan Economic Journal (July 5, 1986), p. 7.
FTC and EPA internal working papers obtained during personal interviews at these agencies in Tokyo, in March and May 1986.
Ibid.
Bergsten and Cline, The United-States-Japan Economic Problem, op.cit. p. 124. For a discussion of these issues, see also Progress Report: 1984 (Tokyo: U.S.-Japan Trade Study Group, 1984).
From the definition of international competitiveness by the President’s Commission on Industrial Competitiveness.
Economic Report of the President (Washington, D.C.: Government Printing Office, 1986), p. 311.
For a detailed discussion of this trend, see “The Hollow Corporation,” Business Week (March 3, 1986), pp. 57–81.
For a detailed discussion see “Business Fads: What’s In and Out,” Business Week (January 20, 1986), pp. 52–61.
The New York Times (September 1, 1985), p. 36.
While in some ways the European economies have done a little better in terms of productivity, most of the observations made about the United States can equally be applied to Western Europe.
See, for example, John M. Cline, “Inter-MNC Arrangements; Shaping the Options for U.S. Trade Policy,” The Washington Quarterly (Fall 1985), pp. 57–71; Jane Sneddon Little, “Intra-Firm Trade and U.S. Protectionism: Thoughts Based on a Small Survey,” New England Economic Review (January/February 1986); and Kenichi Ohmae, “Rising Yen But No Falling Trade Gap,” The Wall Street Journal (July 1, 1986), p. 26. In April 1986, Allen Wallis, Undersecretary of State for Economic Affairs reportedly said of this subject: “… If we base our trade policy toward Japan — and indeed, our attitude toward that country and its people — on one number, we will have a bad policy and provoke results that are not in our interest.” From Asahi Evening News (April 25, 1986 ), p. 9.
Office of Business Analysis, Trade Ripples Across U. S. Industries, a working paper ( Washington, D.C.: U.S. Department of Commerce, 1986 ).
John M. Culbertson, “Free Trade is Impoverishing the West,” and “Control Imports Through Bilateral Pacts”; “Importing a Lower Standard of Living,” in The New York Times (July 28, and August 11, 1985, and August 17, 1986), pp. F3, F3, and F3, respectively.
For a detailed chronological discussion of all the various economic measures introduced through 1983, see the successive yearbooks on U.S.-Japan economic relations published by the Japan Economic Institute of America, now known as the Japan Economic Institute.
Report of the Advisory Committee for External Economic Issues“ (Tokyo, April 9, 1985). The establishment of the Office of Trade Ombudsman in 1982 was also part of the first package. For details of the measures see Appendix C.
Japan 1985, An International Comparison (Tokyo: Keizai Koho Center, 1985), p.36 and “The Japanese Government, External Economic Measures: The U.S. Government’s Assessment of Their Implementation and Impact,” (Washington, D.C.: Office of the United States Trade Representative, 1984), p.2.
Business Week (April 8, 1985), p. 53.
For a select list of the bills addressing U.S.-Japanese trade relations, see appendix D.
Staff Working Paper, “The Effects of Targeted Import Surcharges” (Washington, D.C.: Congressional Budget Office, 1985); and “Costs and Benefits of Protection” ( Paris: Organization for Economic Cooperation and Development, 1985 ).
This debate had its roots in the past because Japan’s experience with Keynsian demand stimulation methods during the late 1970s was controversial. In response to U.S. pressure, the government adopted the “locomotive” thesis of economic growth, and set a real growth target of 7 percent in 1978. Prime Minister Fukuda encouraged “provisional and exceptional fiscal policies for positive expansion” in order to implement a proposal to help end the world recession caused by increased oil prices. The result was a dramatic increase in Japan’s annual fiscal deficits, from 7 trillion yen to 14 trillion yen in one year. By FY 1985, Japan’s ratio of outstanding long-term debt to GNP was 48.8 percent, and the debt service absorbed about 20 percent of the annual budget (in FY 1984, the U.S. public debt/GNP was 33.8 percent. See Takuji Matsuzawa, “Keidanren’s Viewpoint on Government Spending and Future Administrative and Fiscal Reform, Keidanren Review (October 1985), p. 3.
The Keidanren (Japan Federation of Economic Organizations) is a private, nonprofit organization representing all branches of economic activity in Japan. It influences national policy formulation. The Keizai Doyukai is an economic organization for national policy studies. It is also a private, nonprofit organization, and is financed entirely through subscriptions; it, too, is quite influential.
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Higashi, C., Lauter, G.P. (1987). The Origins of Internationalization. In: The Internationalization of the Japanese Economy. Springer, Dordrecht. https://doi.org/10.1007/978-94-015-7750-2_2
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