Japan Offers Plan to Increase Imports : Pacific: An effort to counter protectionist reaction to the growing trade imbalance.
When it comes to rolling out new trade initiatives, no one does it better, or with more frequency, than Japan’s Ministry of International Trade and Industry.
In a meeting Monday with U.S. Secretary of State James A. Baker III, MITI Minister Kozo Watanabe outlined the latest plan to muffle criticism of Japan by shrinking its burgeoning trade surplus.
Under the impressively titled “Business Global Partnership Initiative,” to be formally unveiled Wednesday, MITI will ask 40 major Japanese corporations to develop voluntary plans to increase imports, especially of parts, components and machinery; boost the local content of products they manufacture overseas, and build new cooperative ties with foreign companies for joint development and sales.
The 40 companies were chosen because of their heavy role in Japan’s world trade. Together the companies account for about 50% of Japan’s total two-way trade, according to a senior MITI official. The ministry spent six months on the plan and had intended to unveil it in time for President Bush’s visit to Japan, the official said. The Bush trip was recently canceled.
Many observers note that MITI has announced similar plans in the past, and they are skeptical of the impact of the latest plan. Told to boost imports a few years ago, for example, Matsushita Electronics imported French fashions and Italian jewelry, while Toyota sold wine and camping equipment. Such imports had little impact on Japan’s long-term trade imbalance, economists said, because they were not integrated into the economy. When the Japanese economy began to slow this year, imports of such luxury products plunged and contributed to the jump in Japan’s trade surplus.
MITI said its latest plan differs from past formulas in that companies will be asked to focus their purchases primarily on parts and manufacturing equipment. And although previous plans stressed autos and electronics companies, the latest includes corporations in a broad range of industries, from chemicals, steel and machine tools to glass and paper.
“We have been working hard to encourage companies to increase imports, and this initiative will strengthen that effort,” the MITI official said. “We hope companies will be creative in their initiatives.”
In a related development, Toyota Motor Corp. announced Sunday that it would increase its purchases of American parts, materials and equipment to $5 billion in 1994, up from $1.1 billion in 1988. Nissan Motor Corp. earlier announced a similar plan to more than double U.S. purchases of parts and components to $3.3 billion by 1994. The automobile sector is under the heaviest pressure because it accounts for the bulk of Japan’s surplus with the United States.
MITI’s recent initiative is designed to head off protectionist reaction to Japan’s growing imbalance in trade with the rest of the world. Japan’s trade surplus is expected to climb to nearly $100 billion this year from $63.5 billion last year.
Baker told MITI Minister Watanabe and Prime Minister Kiichi Miyazawa, in separate meetings, of U.S. concern that although America’s trade deficit with most nations was shrinking, its deficit with Japan was rising--to 70% of the total U.S. trade deficit.
U.S. Trade Representative Carla Anderson Hills is expected to arrive in Tokyo on Thursday for three days of talks on various trade issues. She is expected to refocus attention on the Structural Impediments Initiative, which seeks to change Japanese business practices to make the economy more accessible to outside firms.
U.S., JAPAN RELATIONS
Secretary of State James A. Baker III and Prime Minister Kiichi Miyazawa confer. A8
