Japan Reportedly Will Extend Quotas on Car Exports

Japan plans to announce this week that it will extend its quotas on automobile exports for another year, maintaining the ceiling at 2.3 million cars annually, informed sources said Monday.

The move will have little practical effect on trade between the two countries, because market conditions last year kept actual exports by Japan slightly below the maximum allowed and are expected to do so again in the current quota year, which ends March 31.

The decision’s impact will be primarily political, marking a new gesture of conciliation from Japan in its long-troubled trading relations with the United States. The Japanese government has said many times that it would prefer to scrap the quota system.

The quotas began in 1981, early in the Reagan Administration, and some analysts here had speculated that Tokyo would treat the impending change of administrations as an opportunity to end the quotas and begin relations with the Bush White House on a new footing.

In a strictly legal sense the quotas are voluntary, imposed by the Japanese government on its own manufacturers.

They were first implemented in response to strong political pressure from Washington, which was concerned about damage to the American automotive industry by the surge of Japanese imports that began in the 1970s.

In 1985, Japan raised the quota from 1.85 million to 2.3 million units, a 24% increase, and touched off a storm of criticism in Congress.

Since then, with its eyes on Congress, Japan has each year said it would hold the quota at 2.3 million for another year.

“If it’s true, it’s good news,” Rep. John D. Dingell (D-Mich.), chairman of the House Energy and Commerce Committee, said Monday in response to the reported Japanese decision.