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June 18, 1995

[SSJ: 73] RE Japan-US Trade Friction

From: Anthony M Miyake
Posted Date: 1995/06/18

I'm a little dismayed at some of the recent postings on this newsgroup. Before I begin, let me explain that I am NOT going to argue that the Japanese market is "open" to foreign goods. Non-tariff barriers exist in Japan and, in my opinion, they restrict trade more than they do in the US.

In Stephen J. Anderson's article, what dismayed me was the reality that this trade dispute is being waged on an emotional (political) level rather than a rational level on both sides. The discussion in the article sounded more like a TV talk show where cheers and boos determine who's "right" instead of a discussion to inform people so they could make their own judgements. I joined this newsgroup to get and share information with others, not to read some tirade on why I should be angry with the Japanese. Although the Japanese attempt was also emotional (appealing to a very small number of American wages and jobs), I think this was a small example of how important the US and Japan are to each other economically.

In my opinion, the trade talks would be a lot more constructive if they were a little more focused. For example, the retaliatory tariffs should have been focused on specific non-tariff barriers, rather than on import targets. In the past, if import targets were not met the only benefit to the US was the opportunity to call the Japanese liars who are unable to keep their promises.

Some areas we might target are the distribution system. For example, due to the rise of the yen, the prices of American cars should have fallen dramatically in yen terms in the past few years (if their dollar prices have been kept constant). If prices have been kept high due to Japanese distribution companies constantly charging American companies more for the same services as the yen has appreciated, then this can be documented, presented during trade talks, and used as a concrete example of what kinds of non-tariff barriers should be removed to avoid a retaliatory tariff.

Another area that may be targeted is the discriminatory enforcement of Japanese law. If American companies are forced to obey laws which Japanese companies break and get away with, then this can be documented, and presented during trade talks. The re-occurrence of such an incident could be used as a condition for imposing a retaliatory tariff.

Although it is not the case, it seems that the conditions of the tariff are, 1) they will be imposed if they are politically popular 2) they will be imposed if the Japanese continue to anger us in trade talks. If this is the case, then the sanctions appear inevitable.

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Anthony M. Miyake

Approved by ssjmod at 12:00 AM