Reflections on Doing Business With Japan
Two days of kicking around problems and misperceptions about the U.S.-Japan trade dispute at a conference last week sponsored by this publication and Japan’s Yomiuri Shimbun newspaper produced a few sidelights of some interest:
U.S. business leaders who complain about dealing with the Japanese bureaucracy when they try to do business in that country may have the false impression that all the red tape is aimed at foreigners. Not so, insists Wataru Hiraizumi, a member of the Japanese Diet and director of international affairs for the Liberal Democrat party. He says the bureaucracy is often as unfair to Japanese as to others.
As an example, he cites the problem of getting a driver’s license renewed. The forms are so complex that near the government renewal offices are a number of small shops which do a lot of business just helping citizens fill them out.
Some 95% of U.S. exports to Japan were initiated by Japanese rather than Americans, said Kuniko Inoguchi, an associate professor at Tokyo’s Sophia University. It was part of a strong argument she made that the United States has much to do on its own to solve the U.S. trade deficit with Japan, a deficit headed toward $50 billion this year. She called on American firms to promote exports the same as the Japanese do here; Japanese businesses initiate 85% of that country’s export business with the United States, she said.
Another problem is the poor quality of American products, Inoguchi argued. She called for a nationwide campaign to raise the standard of primary and secondary education to boost the quality of the U.S. work force.
In addition, she pointed out that the trade imbalance can’t be corrected as long as the United States won’t sell what the Japanese want to buy. A fifth of the deficit would be eased if the U.S. law against selling Alaskan oil to Japan were changed, she said.
The United States should be playing hardball with the Japanese over a good many trade issues, contends Chalmers Johnson, professor of Asian studies at the University of California, Berkeley. One area of pressure would be to get the Japanese to do more to develop their own domestic consumer economy.
The Japanese have a reputation for frugality and a very high savings rate, he said, but added, “I’ve never seen a Japanese who wouldn’t spend” if there were incentives to do so. The problem is giving the Japanese citizens something to spend on.
He figures they’d buy a nice condominium in a minute if such housing units were being built--and they’d fill them up with furniture, some of it from America. As for the argument that Japan is crowded--one speaker noted that population density is the same as it would be in Southern California if half the population of the United States lived here--Johnson observed that Hong Kong is also crowded but the housing is better.
One of the problems in resolving disputes with Japan is that there aren’t old friendships built up over the years through schooling and other contacts as there are with European countries, according to William G. Ouchi, professor of management at UCLA. These informal ties would be useful in discussing trade friction in unofficial settings, he said.
Commenting on a poll by the two newspapers indicating that the Japanese don’t believe they have much experience with American goods, Jiro Tokuyama, executive director and dean of the Nomura School of Advanced Management in Japan, argued that his countrymen overlook what it is they use. He cited Colgate toothpaste, Kellogg’s Corn Flakes, Procter & Gamble diapers, Beech Nut baby food, Wilson and Spaulding athletic equipment, Schick and Gillette razors--and the list went on.
In the irony department, a leader in the local Japanese-American community points out that a large Japanese supermarket chain has located in Los Angeles, to the consternation of small shopkeepers operating in the area. Meanwhile, back in Japan, it’s tough to create big shopping centers because of restrictions kept in place through the pressure from small shop owners.
