A new report shows that US efforts to open up Japanese markets have been largely unsuccessful, writes Paul Blustein in Washington
THE organisation representing United States business in Japan this week issued a downbeat appraisal of Washington’s efforts to open the Japanese market over the past 16 years, asserting that less than a third of US-Japan trade agreements have resulted in significantly increased sales of US products.
“Of the 45 trade agreements between the US and Japan since 1980, only 13 have been successful,” the American Chamber of Commerce in Japan said in releasing a study evaluating major US-Japan trade pacts. “Another 18 can be deemed marginally successful and a discouraging 10 have failed.”
The remaining four produced “mixed” results, and thus couldn’t be rated, according to the study.
Among the trade pacts that the group rated as “successful” were a 1994 accord on cellular phones and the controversial semiconductor accords of 1986 and 1991, which anticipated a 20% market share for foreign computer chips in the Japanese market. Among those rated as “unsuccessful” were 1994 agreements on insurance, construction, and apples.
At a time when the Clinton administration is turning the focus of trade negotiations toward China, the report serves as a reminder to the White House that access to the Japanese market remains problematic.
The administration began giving less attention to Japan following a highly- charged spat with Tokyo over cars and car parts in mid-1995. In addition, many officials in the administration believe that a long economic slump in Japan means that the country no longer poses an imminent threat to US economic primacy.
In recent months the White House has sought to put a positive political spin on its market-opening initiatives in Japan, trumpeting a 35% rise in exports of US products to the country since President Bill Clinton took office, and an even faster growth in sectors covered by trade accords.
At a press conference, Robert Orr Jr, a Chamber vice-president who represents Motorola Incorporated in Japan, acknowledged that “much has been achieved in bilateral negotiations over the 16 years included in this study”.
But Orr also urged Washington to forge a clearer vision of what it wants in trade negotiations. He said when necessary the US should brandish the threat of trade sanctions – but only if “it has the will and ability to impose them”.
In the past, he said, US officials negotiating with Japan had sometimes resorted to “bluffing”, which served only to erode US credibility. Such criticism has occasionally been levelled at Clinton-era trade officials, but Orr declined to single out any administration for credit or blame.
Whether the US can still wield a credible threat of sanctions with Japan is open to serious doubt, because Tokyo has admonished US officials that any unilaterally imposed penalties against Japanese companies would violate the rules of the newly formed World Trade Organisation.
But Ira Wolf, a Chamber board member who represents Eastman Kodak Company in Japan, observed that the US “is still the most important market to Japan”, and asserted that Washington “needs to look more creatively” at ways of using its leverage to extract market-opening measures from Tokyo.
The Chamber rated trade accords by asking the affected companies whether the pacts had worked, and according to Wolf, “from our perspective, an agreement is successful if at the end of the day we see results” – in other words, increased sales. – The Washington Post