Japan Criticizes U.S. on North America Trade Bloc

In some of the strongest language to come out of Japan yet on the issue, business and government leaders Wednesday condemned efforts by Mexico, Canada and the United States to forge a North American free-trade agreement.

By focusing its attention on the North American talks, the United States has “undermined the momentum of the Uruguay Round negotiations in GATT,” Yasuo Tanabe, director for North American trade policy planning at the Ministry of International Trade and Industry, said during an American sponsored trade conference. The General Agreement on Trade and Tariffs talks focus on reducing trade barriers among member nations worldwide.

Japanese feel a “sense of sadness that after 140 years, America seems to have given up on free trade,” added Kazuo Nukazawa, managing director of the Keidanren, Japan’s association of big businesses. “We feel like our old friend America left us to tie up with Mexico and Canada.”

Officials from Mexico, Canada and the United States insisted that the Japanese objections were unfounded. They promised any North American agreement would abide by GATT rules.

“We have a pretty good track record in resisting protectionism,” said Michael H. Armacost, U.S. ambassador to Japan. In a thinly veiled attack on Japan’s position against rice imports in current GATT negotiations, Armacost said that unless “other” governments overcome interest group pressures to open their markets further, “we may look back and see this as a turning point we will all regret.”

Raul Alfaro, executive vice president of the Mexican Investment Board, suggested that Japanese companies were well positioned to take advantage of Mexico’s low labor costs and strategic location to sell into the North American market.

However, Shoichi Amemiya, President of Nissan’s Mexican operation, argued that Mexico is unattractive to Japanese companies. While labor is cheap, he asserted, the need to train and closely supervise workers results in overall labor costs that are no cheaper than Japan. He noted that Japanese investment in Mexico now represents one-half of 1% of all Japanese overseas investments, with Nissan’s $1-billion investment in its Mexican operation representing the bulk of that investment.