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July 11, 1995

[SSJ: 116] RE PolEc of US-Japan Air Traffic Dispute

From: John C Campbell
Posted Date: 1995/07/11

Responses to two queries from Prof. Hiwatari: On autos, I think Washington took increased US production just as a second-best, as what we could get. Unlike the early 1980s, when the slogan that people should make cars where they sell them was presented as a moral imperative and widely used to attack Japan, these days nobody much pushes for FDI in auto. No reason for the UAW to, since the plants aren't unionized, and the car makers have more recently asked that US production by Japanese makers be counted as imports (back when the ceiling was still in effect).
So a plausible hyphothesis but one that doesn't work, I think. Actually there were not many alternative outcomes in the auto dispute.
On airplane routes, I think you have that exactly right, and would add that it is a rare case of Japan trying to get the US to change something. The other one that comes to mind is the attack by Sony and others on, can't remember the name, that tax system started by California and other states that required a company to report its worldwide earnings. But that was state level policy. This air route attempt is passive in a sense, since Japan did not make a spontaneous demand on Washington but tried to make a deal in response to an American demand.
Also, I think they tried exactly the same thing a few years ago but gave in more quickly. Anyway, an interesting development I agree.

Approved by ssjmod at 12:00 AM