Japan Calling : American Firms Getting Unsolicited Offers of Export Help

Like a lot of American business people, Tim Cline had heard how difficult it was to penetrate Japan’s market.

So when Japan’s official trade promotion agency called out of the blue a year ago to ask if he would like to export his classic cars, the president of Silver Spring, Md.-based American DreamCar was not only surprised, but skeptical. “I had some doubts that anything would come of it,” he said.

But Keith Ayano of the Japan External Trade Organization’s New York office found a group of Japanese businessmen who formed a company called DreamCar Japan. They just agreed to import $5 million worth of Cline’s cars--hybrids with the bodies of such legends as the ’57 Chevy but with modern engines, pollution control and safety features.

Many other American companies are getting similar cold calls from JETRO, the agency that helped Japan become an exporting powerhouse, and from Japanese corporations JETRO has enlisted in its effort to seek out American products to import.

In response to JETRO requests that Japanese industry import more, for example, the construction company Hanix Corp. contacted Allied Steel & Tractor Products Inc. of Solon, Ohio. In three years the Japanese firm has increased its annual orders of Allied’s aluminum safety shoring for construction trenches to $3 million--10% of Allied’s business--from $3,000.

Some U.S. trade experts are skeptical that such efforts will do much to narrow the $43.4-billion U.S. trade deficit with Japan. Nonetheless, JETRO’s parent organization, the powerful Ministry of Trade and Industry, has launched an unprecedented import promotion effort to reduce Japan’s surplus with the United States--a contentious issue that has degenerated into name-calling in recent months.

It appears to be generating some results.

One reason is a sevenfold increase the past two years in JETRO’s annual import promotion budget--to $100 million, said Saburo Yuzawa, executive director of JETRO’s Los Angeles office. The extra funding has allowed JETRO, which also has offices in Atlanta, Chicago, Denver, Houston and San Francisco, to beef up or launch several programs to help American companies.

The agency sponsors trade fairs in the United States and Japan, where U.S. companies can show products and services to prospective Japanese buyers; provides import information to Japanese businesses and export information to American firms; arranges trade missions for Japanese buyers seeking U.S. products, and provides financial assistance to Americans who want to travel to Japan to investigate the market.

Of all the JETRO efforts, a recently launched senior trade adviser program is perhaps the most ambitious. The agency has loaned free to the export promotion agencies of 17 American states top-level executives of Japanese manufacturing and trading companies who help the states generate exports.

It’s an expensive proposition because of the advisers’ high-level corporate positions, according to Patrick Bray, a spokesman at JETRO’s San Francisco office. JETRO pays the executives’ salaries, housing allowances and other costs while they are on loan.

The advisers are hard-charging, results-oriented veterans of top trading companies--such as C. Itoh, the world’s largest--and manufacturing giants such as Matsushita.

Before Micho Yamaoka arrived as senior trade adviser in Alabama a year ago, Phifer Wire of Tuscaloosa was exporting its vinyl-coated fiberglass mosquito netting to 110 countries--a record that had earned it a U.S. Commerce Department award. But Japan wasn’t one of the 110.

Using contacts developed in his 25 years at Nissho Iwai trading company, Yamaoka quickly helped Phifer steer around the distribution-system roadblocks that had prevented it from selling in Japan.

When Tateyuki Eguchi arrived in Detroit in January of 1991, he immediately contracted with an economic development consulting company for a list of Michigan companies whose products might be exported. One name was Chateau Grand Traverse of Traverse City.

Ed O’Keefe Jr. said Eguchi toured his winery in May of last year without mentioning export possibilities.

To O’Keefe’s surprise, Eguchi “called me up around two weeks later, and he asked if I would be willing to go to Japan to learn how to market my wines. I told him I didn’t have the money for a trip like that, and he said, ‘You don’t understand--JETRO will pay for it.’ ”

The trip led to contracts with Sommelier Co. and Nittetsu Shoji Co., including a 300-case order of cherry wine for Japan’s cherry blossom festivities.

Yuzawa of JETRO’s office in Los Angeles said all 50 states were asked if they were interested in a senior trade adviser. The positions were filled on a first-come, first-served basis until the program’s budget was committed.

The states with advisers are Alabama, Arkansas, Colorado, Florida, Indiana, Iowa, Massachusetts, Michigan, Missouri, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee and Texas.

California turned down an adviser. Gregory Mignano, executive director of the California State World Trade Commission, said he believed that the program needed a narrower focus than the entire state. He favored a focus on a specific industry area--such as Silicon Valley.

Some American companies are getting help from several JETRO programs at a time.

Last spring, Youichi Yokokawa, JETRO’s senior trade adviser in Oregon, and Dean Gadda of the state’s trade promotion office asked Jackie Gango of Portland if they could help her export her fine art prints.

A few months later, JETRO dispatched buyers from the Lumine department store chain and other retailers to Gango Gallery. Gango began getting orders for artsy T-shirts that the buyers showed at Japanese trade fairs, but what she really wanted was a contract for the more profitable prints. She flew to Tokyo in December, where Oregon’s trade promotion office and JETRO arranged meetings with importers.

Gango got the plum she was hoping for--a deal with Art Print Japan, which has a 72% share of Japan’s poster distribution market.

Despite JETRO’s high-powered efforts, some experts question whether the programs target the kinds of products and services that can put much of a dent in the U.S. trade deficit with Japan.

Clyde Prestowitz, a former U.S. trade negotiator who is president of the Washington-based Economic Strategy Institute, said he wished that “they were talking about--I hate to say it--auto parts” because “$10 billion worth of auto parts, or 500,000 cars, or sales of nuclear generators” would be significant.

There are signs, though, that JETRO will be cranking up its effort on auto imports.

In the wake of the rancor over autos and parts that surfaced at President Bush’s trip to Japan in January, JETRO’s Los Angeles office rushed to line up a mini-trade fair April 1 that will bring together 10 auto accessory manufacturers from across the country with 50 Japanese buyers.

The makers--all members of the Diamond Bar-based Specialty Equipment Marketers Assn.--include Tom and Kim Bengard, whose TrimMaster Inc. in Chino produces wood paneling for dashboards and other interior areas.

“We’re excited about this opportunity,” association President Chuck Blum said. “Our sense is that this is a sincere effort, not just some face-saving” gesture.

Using JETRO to Export to Japan This is a possible scenario for an American company obtaining export contracts with Japan through the Japan External Trade Organization:

* Initial Contact: A JETRO representative in the United States calls the company, saying that the company’s product appears to have a potential market in Japan. There is a variety of reasons why the product is chosen. In some cases--such as medical equipment--American technology is superior to Japanese. In others--such as grandfather clocks--there are few Japanese manufacturers. And in still others--such as metal screws for plastic molding machines--the American product is cheaper.

* Trip to Japan: JETRO sends an executive of the company to Japan to study the market and meet potential importers. The executive returns to the United States with an idea of whether he must modify the product to appeal to Japanese tastes and with an idea of how to market the product there.

* Product Promotion: JETRO sends a buyer to the company’s U.S. office to purchase samples of the product. The buyer places the samples in Japanese trade fairs--such as sporting goods or home furnishings trade fairs--at the same time that JETRO spotlights the product in newsletters and catalogues to Japanese companies. Hundreds of Japanese companies become aware of the product.

* Contracts: Several Japanese firms that have seen the product in a trade fair, newsletter or catalogue contact the American company. Negotiations are held that result in deals. Some deals involve one-shot contracts--say, one container load of metal tool cabinets. Others involve exclusive distributorship arrangements under which a Japanese firm imports the company’s product for years at a time.