Japanese Publisher Says Statistics Distort Trade Surplus

A prominent Japanese publisher said Friday that Japan’s trade surplus with the United States is not as bad as “outmoded” statistical methods by the U.S. government make it seem.

Toshiaki Ogasawara, publisher and chairman of the Japan Times, the oldest English-language newspaper in Japan, said about 30% of Japan’s exports to the United States are produced by U.S. subsidiaries in Japan, and that the Japanese government has “no control whatsoever over these types of exports.” In compiling its trade figures, however, the U.S. Commerce Department does not always distinguish between products made by U.S. firms in Japan and those made by Japanese companies, he said.

Citing Texas Instruments as an example, he said the semiconductor maker has moved much of its computer chip production to Japan. The chips that Texas Instruments sends back to the United States for assembly have been registered by the Commerce Department as imports from Japan, he said.

Ogasawara said such a manufacturing operation makes it “virtually impossible” for Japan to comply with a trade pact signed in March requiring that country to reduce its computer chip exports to the United States by 20% over time. The Japanese publisher spoke Friday to members of the Orange County chapter of the Japan America Society of Southern California.

Until the U.S. government revises the way it collects trade data, Japan will continue to show a massive trade surplus and U.S.-Japan trade frictions will continue to be tense, Ogasawara said. He spoke just minutes before President Bush announced Friday that Japan was not included in the “hit list” of countries with the worst trade barriers against U.S. products.

Globalization of business means that “the customary statistics concerning imports and exports are becoming increasingly meaningless” as companies buy more components from abroad, he said.

“If (U.S.) politicians continue to take decisions on the basis of outmoded statistical data based on 19th-Century ideas about trade, then clearly friction can only continue between our countries,” Ogasawara said.