Until Gerald Baker's article on air cargo disputes (Financial Times, July 8), I didn't recognize that this case might be a good contrast to the auto parts case, instead of being just another "trade war" potential.

As I understand the implications of his report, if the auto/auto parts case can be seen as an instance as Japan setting up domestic production structures that took advantage of American free markets at the cost of ignoring trade reciprocity, the air cargo case can be seen as one in which Japan is trying to realize "reciprocity" and is "complaining of unfairness" of the "web of bilateral and mulitilateral deals which determines trafic flow around the world," in this case the US/Japan treaty of 1952.

In other words, if the hegomonic position of the US in immediate postwar trade resulted in a free trade regime of "embedded liberalism," which Japan took advantage of, the immediate postwar regime of air trafic resulted in a highly regulated regime favoring the US (the hegemon), which Japan now sees as unfair and obsolete.

However, I know very little of why air transportation was so regulated and how national interests of the major nations in the 1950s were reflected in the accords. I was wondering if anyone has any information on this, or any comments on the line of argument that I pursued above.

Thank you,

Nobuhiro Hiwatari