This research paper will focus on the U.S.—Japan war trade between the years 1980 through 1990 including the present. Different issues such as tariffs and bilateral verses multilateral trade between these countries will be presented. The paper will also be comprised of issues present in the General Agreement on Tariffs and Trade (GATT) as it relates to U.S.-Japan war trade. Also, there will be a brief section of the paper that will discuss current trade issues for either country and the sentiments of each country in regards to trade with introducing factors of labeling flaws within each country’s trading policies.
Currently the U.S-Japan trade is focused on multilateral trade in policy but in practice it has found its definition with bilateral trade (AskAsia.org).
In GATT however, the idea of multilateral trade is what is fostered in international issues as what is present in the U.S.-Japan trade war. In the paradox of multilateral trade there exists a paradigm of unrestrictive behavior which offers trade to an infinite design for either country while simultaneously offering a binding agreement between U.S. and Japan in which mandates are set in action which present penalties for deviating from the obligations of trade.
Within the design of GATT there are intrinsic flaws. The GATT coverage is restricted to trade in merchandise and tariffs but while the fundamental aspects of trade have changed since GATT’s inception in 1948 its once progressive policies are no longer applicable in today’s global market place, “Another flaw is that because the GATT was a contractual agreement, enforcement depended on the voluntary arbitration of disagreements between signatories” (Choate 1992: 37).
The Term Paper on Free Trade Canada Countries Tariffs
Is free trade really such a good idea There are some countries that says it is and others that rather be left alone and being self-sufficient. An example of this statement would be the United States who thinks that Free trade is big on improvement by creating new jobs and making the U. S. the global leader in economy. Whereas, Switzerland refused to join the European Economic Area (EEA) for ...
In response to these flaws the United States has implemented specific actions in which to try to counter the outdated policies of GATT.
Such offerings by the United States in a policy of reform to GATT issues are centered around seven major rounds conducted in varying years from 1949 through 1986 and currently. These rounds are vocal in three major foibles in the GATT as it relates specifically to the U.S.-Japan trade. The first limitation mentioned on this subject refers to the unrecognizable factors of change in these two nations and the differences that rest within each nation (such as the yen versus the U.S. dollar which elicit tariff wars), “…Japan and most of the dynamic Asian economies continue to rely on industrial targeting, and the line between government and business is blurred, if not nonexistent. These economies regularly rely on subsidies, protectionism, and dumping to both control their home markets and gain market share in foreign countries” (Choate 1992: 37).
Thus the fact that different countries rely on trade in specific markets goes unrecognized by GATT.
The American economy is market oriented. This suggests that there exist no limits to their market entry and product availability for trade, but as Choate states, “The GATT fails to accommodate these fundamental differences betweent eh Asian, European, and American economies” (Choate 1992: 37).
This gives rise to the other flaw highlighted by Choate in which GATT coverage is limited.
Choate suggests that GATT covers approximately 80 percent of world trade which resides in merchandise alone. This means that trade in the areas of textiles, agriculture, and services etc. are barred, “The GATT covers not even 7 percent of global economic activity” (Choate 1992: 37).
The GATT rounds conducted in the United States are thus focused on the expansion of this coverage but because of the dissent between the U.S and Japan such an agreement will be so porous that such allowance of trade seems unforeseeable in future trade between these two countries (Greaney 2001).
The Term Paper on The role of the “developmental state”
‘The role of the “developmental state” in the post-war period has been exaggerated.’ In what ways and in which circumstances has government contributed to national economic success? While each country strives for the economic success of their nation, the approach and system that they use vary. Some countries like China support the idea of strong government intervention in the economy while others ...
Choate mentions a third flaw in GATT in relevance to U.S.-Japan trade war in that when a nation stands in violation of the restrictions and limitations presented by GATT the resolution for this action finds no quick counter-action, and “Most important, penalties are unenforceable” (Choate 1992: 37).
This stands to reason that essentially although great in concept GATT makes no enforcements on its policy and its validity hinges upon the ethics of each individual nation. In a counter maneuver to the unpredictable behavior of Japan and the seemingly unresponsive GATT, “The United States is forging a de facto trade bloc through its negotiations on a North American free-trade agreement” (Choate 1992: 37).
This means that the United States is trying to do what GATT was supposed to be able to do in its inception in 1948, that is reinforce a multilateral trade (Greaney 2001) between countries instead of the havoc that bilateral trade has proven to be, especially between the United States and Japan. The United States has enforced this free trade with Canada with great success but has yet been unable to find a suitable agreement on this with Japan (this issue will be addressed in more depth later).
The suitable cause for these changes as Choate states, “A major, but unspoken, motivation in both the European and North American actions is to deal with Japan’s attempts to dominate world markets in key industries such as finance, automobiles, electronics, and high-technology goods. In the process, Japan has ignored its GATT obligations and has taken advantage of Open markets wherever it can while keeping its markets closed through a variety of formal and informal barriers” (Choate 1992: 37).
The United States however has been criticized for being too passive in its approach to Japan and their domination of the market place. Choate suggests that this is true in sight of the 1970’s flooding of televisions into the American market by Japanese productions. In response to this invasive and strident market attack the United States responded by merely enforcing, albeit without great success a quota allowable for Japanese products. The quota was set forth at such a high level (more than 1.5 million sets) that Japan was thus enabled to stockpile sets in warehouses thus rendering the U.S. imposed quota insignificant (Choate 1992: 38).
The Research paper on Unit 731 Japanese Army
A war is a form of violence and terror. However, some countries go a deal more than that. For example, the Iraq army carried out a sneak attack for which was criticized by the Western countries. The army took out nearly the whole army and also killed a number of innocent civilians. The Nazis also had gassed and murdered millions of innocent Jew people and was widely criticized. Japans biological ...
This action was further echoed in the 1980s when Japan presented the U.S. market with a plethora of automobiles. In response to this once again the United States issues quotas toward Japanese products but also it permitted Japanese businesses to build assembly factories inside the United States which altogether allowed for Japan to completely disregard such restrictions. In response to this certain officials and GATT members state that the Unites States should be seeking a more aggressive approach in unilateralism.
This market opening would serve to curtail Japanese product ‘carpet bombing’ onto the U.S. market. This simply means that managed trade should be utilized between the United States and Japan. In the idea of a market war between these two countries their must also exist product import targets in which quotas are realistic and not heroic and products and industry are more regulated in regards to possible inflation problems foreseeable in the future especially in regards to the United States in which imported goods may lead to unemployment in the United States but this will be discussed later.
In 1993 the framework of Japan in regards to the U.S.-Japan trade wars suggests that issues such as “insurance, flat glass, paper, telecommunications, aviation products, wood products, regulatory policy, semiconductors, and photographic film” (Latham 1996; 2) which further lead to the complications accountable for today’s U.S.-Japan trade wars, as Latham states,
Critics of the Clinton administration have argues that those policies are counterproductive, that they lead not to market opening but to government and bureaucratic manipulations of trade flow, and that they threaten the world trading system that has been built increasingly around internationally agreed-to rules established in multilateral negotiations. There is, however, a more fundamental problem with current policy that its methods. Te entire focus and premise of the approach is misguided: the major industries whose causes have been championed are quite simply not facing a closed market in Japan. Economic flows with Japan are substantially larger than most people realize and are not susceptible to simple analysis by comparing bilateral or, even worse, secotoral merchandize trade deficits (Latham 1996; 2)
The Essay on Japan Social Aspects Japanese Home
The Japanese culture is unlike any other in the world. It has long been known for it's excellence in education and it's strong background of family and religion. The Japanese way of life is an assortment of art, literature, music and more; it is nothing short of spectacular. I will explain about some of the different aspects of the Japanese life style as well as take a cultural look into the life ...
Thus it is relevant that a results based solution is required to produce progress between the United States and Japan.
During the Clinton Administration the threat of a trade war was only just beginning. This was valid because of the 1994 bilateral merchandise trade deficit (Johnson 1995), which amounted to approximately $66 billion. Of this number $37 billion was attributed to the automobile sector. The United States set forth to curb this deficit by changing the buying power by aggressively approach trade policy in regards to Japan by trying to force Japan to be compromising with their purchasing targets for American made goods especially in the area of automotive parts and as Latham states, “Japan’s government officials and industry leaders dug in their heels. They categorically rejected Washinton’s managed-trade formula and threatened to take the case to the fledgling World Trade Organization” (Latham 1996; 2) However during negotiation trade talks in Geneva U.S. Trade Representative (USTR) stated that Japan had not been open to such policy implementations.
Albeit in return the Unites States, “…automakers did not even offer right-hand-drive cars to the Japanese market. With such complete disregard for consumers, how could Detroit expect to succeed?” (Latham 1996; 2-3).
The United States attributes such aggressive policy holding by Japan to decades worth of Japanese protectionism (Heyman 1997).
This is a history conducted in sequestered goods, discrimination and its dogged attributes of foreign market trade, and as such, as Latham suggests “…The U.S. industry cannot be expected to make it in Japan without affirmative actions” (Latham 1996; 3).
The United States has not truly been given the free reign in Japan as Japan has received in America (Rozman 2003).
This history harkens back to the end of World War Two and automobile trade between these two countries.
It was after World War Two that a proposition made by Japan to the Ford and General Motors Company was rejected that the true issues of trade war began between the United States and Japan. After the war the United States was invited to ‘re-establish’ their prewar industry in Japan but both presidents of the American automobile companies refused
The Term Paper on Japan Japanese Language
JAPAN By Jonathan Appel GEOGRAPHY Japan is made up of a four main island chain with other small islands in the western Pacific Ocean volcanic mountain range. The main islands are Hokkaido, Honshu, Kyushu and Shikoku. Many of the major cities including Tokyo, the capital, are found on the island of Honshu. Many of the islands of Japan are volcanically active to this day. There are approximately ...
…toward the end of the occupation they turned down feelers from the Japanese government about setting up manufacturing facilities in Japan. The internal memorandum that Ford’s international vice president, Arthur J. Wieland, wrote to Henry Ford 2 in April 1952 set the tone for many years of neglect. ‘I presently cannot foresee any major competition from the Japanese automobile industry anywhere in the world outside Japan, with the exception of China, Manchuria and Korea,’ Wieland wrote. GM’s assessment was equally bleak (Latham 1996; 4)
The Japanese however did not give up their ‘feelers’ and offered the same proposition to the United States in 1960 this time to Toyota but was subsequently refused.
The Japanese proposition included Toyota and Ford jointly venturing automotive production companies in Japan. This deal was set at a 40-40-20 split but was later adjusted to Ford gaining 50 percent of the grosses. The deal was rejected due to various reasons. The Japanese however were not deterred and attempted their proposal once more in the 1980’s. This proposition however was curtailed due to the implementation of the Reagan administration of certain voluntary restraint agreements or, as mentioned prior, quotas on Japanese car imports,
The 1980’s was thus a decade of so-called voluntary restraint agreements, which placed an annual quota on the number of autos Japan could export to America. Significantly, Japan was the only car-exporting country singled out for such treatment by Washington, an action that may have been in violation of the nondiscriminatory rules under GATT. Economists have estimated that the quota added approximately $2,000 to the price of an imported automobile during the period and cost the American taxpayer an additional $105,000 to #241,000 per job saved in the American auto industry (Latham 1996; 5).
Thus, it may be seen that the United States in turn was being protective instead of the cultural issues of Japanese protectionism concurrent with views that Japan is to blame for American gross domestic product problems. The Japanese however approached such restraint with business like initiative by making aggrandized investments in U.S. production facilities in order to insulate themselves from trade barriers, however such a tactic, “allowed them to establish important design centers, vastly improve their marketing and sale efforts, and better control and expand their distribution system” (Latham 1996; 5).
The Term Paper on Showa Restoration Japan Footnote Japanese
... Najita Japan The Intellectual Foundations of Modern Japanese Politics (Chicago: Chicago University Press, 1980) 128. 'The exclusion of Japanese Immigrants by the United States in ... resources when projectionist trade laws were implemented around the world Japan suffered significantly because it lacked raw materials and markets. Japan's economy which was ...
By 1994 Japan had initiated seven transplant factories into the United States which in turn were producing 2.1 million cars annually. This totaled to more than 35,000 American employees which meant that American jobs were created thanks to Japanese initiative, “…American jobs have been created directly and indirectly by the transplants over the past decade, including the dealerships that sell the luxury imports that were threatened with punitive tariffs” (Latham 1996; 5).
Such issues as punitive tariffs were also raised during Nixon’s presidency and again with Reagan’s presidency. It was with the U.S. Trade Representative Carla Hills that such issues were truly addressed. She spoke to the Japan National Press Club in Tokyo regarding the U.S.-Japan deficit that in 1989 was figured at $50 billion. In order to remedy this several points were mentioned which directly correlated with the same progressive implications stated during Nixon’s reign such as aiming towards lowering nontariff barriers on American products. Also Hills wanted to restrict barriers to the product placement of United States satellites and supercomputers. The Japanese were further urged to purchase more American made products to reduce this large deficit. The Japanese were further accused of restricting fair trade by their uncooperative behavior in not allowing two of America’s top retailers access to Japanese trading imports (Toys-R-Us and McDonalds) while Japan countered that it still had to discuss the firms’ investment applications. Hills ended her discussion with Japan by stating that, “Japan’s closed distribution system not only hurt American producers by retarding U.S. exports to Japan but also affected Japanese consumers, who were forced to pay higher prices for those goods” (Choate 1992; 40).
Thus, America’s seeming commitment to free trade was emphasized not only during Nixon’s time but in Hill’s speech in the 1980’s. The reflection of both of these time periods suggests that the U.S.-Japan trade war has been ongoing and in its present state will continue to increase the deficit. It was in 1982 that Japan introduce ad hoc presented by former Ministry of International Trade and Industry Minister Esaki stated that the Japanese government would begin to make reductions to non-tariff barriers in accordance with GATT and the policy of the open market. To further emphasize an attempt to make changes in 1982 Japan also initiated their Office of Trade Ombudsman for foreign grievances as well as Japanese Customs authorities announcing that they would instigate a five-point plan in which the objective would be the overall advancement of foreign access to the Japanese market. Although these concepts were great improvements in their policy stage the plan did not state the strategy by which Japan would counter foreign market trade on the side of other countries and not just the focus of Japanese trade being offered to other countries which was the main point of the five point plan (Choate 1992; 40).
Since the Japanese were unwilling to compromise on trade issues the United States countered their above stated policies with the suggestion that this policy was no different than the 67 other arrangements made by former Japanese leaders in regards to trade with the United States and the Japanese-centric approach offered. In 1982 the Japanese government suggested that they would initiate a market-access package, “Through this initiative, the Japanese said, they would reduce tariffs on 17 agricultural items, address problems with standards development, and allow forefingers to participate in Japanese technical groups of domestic industry organizations that were formed to draft specifications to submit to Japanese government ministries. Despite heavy U.S. pressure, though, the liberalization of agricultural production was not included in this package” (Choate 1992; 40-41).
It was in 1983 that Japan made the announcement pertaining to further reduction of tariffs. This reduction included 28 industrial and 47 agricultural products. This market opening suggested that particular attention to simplification of import testing and other procedures would be accomplished. Furthermore the Japanese government made it clear that their intentions in regards to import promoting reforms, and also included the allowance of retail outlets in order to handle imported tobacco products (Choate 1992; 41).
1984 produced the further opening in Japanese markets which entailed removing 7 tariffs on certain items and once again the reduction of tariff rates on 60 others,
But in the spring of 1984, when the Japanese announced these initiatives, the U.S.-Japan Trade Study Group—composed of businessmen from both the Untied States and Japan—reported that many of the allegedly new undertaking had been previously announced. The Reagan administration called the proposed tariff changed too little, too late, and asserted that many of the promises made by the Japanese government were simply too vague(Choate 1992; 41).
Japan however was not deterred by this statement and in a last ditch effort to ameliorate the trade war the Japanese government made specific efforts to improve their relationship with the United States as is proven with the Market-Oriented Sector Selective (MOSS).
This talk was conducted in 1985 introduced the concepts of Japan making efforts of trade in such areas as telecommunications, pharmaceuticals, medical equipment, electronics, and forestry products and a year later auto parts (Choate 1992; 41).
This same year brought forth further attempts of trade negotiation from Japan. This is proven in the formation of the Advisory Group on Economic Structural Adjustment for International Harmony asserted by Prime Minister Nakasone and chaired by Haruo Maekawa, reported, “…major restructuring of the Japanese economy—an increase in imports of manufactured goods, tariff reductions, streamlined standards, and certification procedures, and a simplified distribution system. Yet, today, after all these market-opening processes and vast expenditures of time and energy on negotiations, the Japanese market remains only marginally more open in the 1990’s than it was at the end of the 1970’s” (Choate 1992; 42).
There are however true improvements that Japan could foster to improve trading between them and the United States, which include open markets that make a true decision to be incorporative of free trade which means global trade and not Japan-centric trade; furthermore it is suggested by Choate that Japan could become more multilateral in its dealings with the United States as it had been after World War Two in setting up a fairer commerce relationship instead of dominating the market with its products and goods. Also, Choate suggests that the United States should initiate a free market approach when dealing with Japan instead of the passive approach it has been reported to employ in past dealings with Japan (Choate 1992; 42).
The United State must also make an effort to initiate a more forward thinking when dealing with Japan (Wan 2003).
The foible present in American market trading is the held belief that the Japanese market is similar to the United States market (Policy Analysis 1996) when in fact they are very dissimilar. Japan operates in a market in which product is equal to the value it has in trade globally and not just nationally, “The two nations differ in ways both manifest and subtle, reflection basic difference in history, culture, national \ aspirations, and politics. Despite America’s spirited urging of Japan to adopt the U.S. economic model—reliance on market forces, free trade, and deregulation—this system enjoys little appeal across the Pacific. While its suits the United States, it would never fit Japan and the Japanese know it” (Choate 1992; 43).
The area in which Japan differs from the United States is clearly in the way in which they invest money (Corry 1986).
Japan has the world’s largest savings while also holding the title of being the world’s most advanced commercial technology as well as possessing progressive manufacturing capacity. In regards to these statistics Japan has the lowest unemployment rate in the world while also laying stake in the fact that it has great social stability. This means that Japan is able to invest in twice as much as the United States when Japan is half the size economically speaking (Lee 1999).
To support this information Choate states that in 1991 Japan made more fixed capital than the United States and Canada combined, “Which means that its competitiveness and growth will surge in the 1990s. Japan has a $43 billion trade surplus with the United States, and its prospects for strong net national profits from trade surpluses continue for as long as one can calculate” (Choate 1992; 43).
In view of this it is essential that the United States considering that Choate was writing about the expanse of Japan in the 1990s and in modernity the country has only increased its trade, money etc. suggests that the U.S. should begin to recognize the fundamental differences between them and Japan. This means that the United States needs to refocus their trade strategy to incorporate more accommodating products that Japanese market buyers will find desirable. This also means a complete revamping of GATT since its ineffective powers have been proven in this paper. Their policies did not produce any results or reprimands that curtailed Japan but merely were a legislative body with little power.
Furthermore the United States must allow for expanding their own trade. This entails a more balanced deficit or budgeting qualities for the year 2007 with efforts to enforce domestic trade, “and adopting trade-sensitive fiscal, monetary, and exchange-rate policies” (Choate 1992; 43).
The United States must also become more competitive with trade both on a domestic and international level. The United States must initiate goods which are capable of competing with Japanese made products (Vogel 2003).
Without the improvement of GATT or its lack of legal enforcement with regards to the trade war between the United States and Japan the United States must counter Japanese trade through their own devices and national trade promotion on an international scale focusing not only on Japan but other countries since Japan has dominated the world market place for so long this may prove to be a difficult undertaking by the United States, “The same, however, is not true with Japan (Lin 2003).
For 26 years, Japan has run a merchandise trade surplus. IN 1991 and 1990, Japan accounted for more that 60 percent of the U.S. trade deficit…To be sure, America must not succumb to the lure of old-fashioned protectionism. Rather, it must be sophisticated enough to discern the difference between closing U.S. markets to avoid foreign competitions and closing them as a device to open Japan’s markets” (Choate 1992; 44).
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