U.S.-Japan Trade Dispute
* In response to “Must Friends Bicker Endlessly?” editorial, May 10:
Of the three main issues--after-market auto parts, auto dealerships in Japan and parts procurement by Japanese auto makers--Japan in fact put forth constructive new proposals and acceded to practically every U.S. demand, except for commitments to numerical targets, which are tantamount to managed trade. Specifically, The disagreement hinges upon: 1) voluntary plans for auto parts purchases in the private-sector, which is axiomatically outside of government purview, and 2) the number of dealerships in Japan which sell U.S. cars because, again, the government cannot be held to business decisions made in the private sector. If the U.S. side had accepted the concessions which were made by Japan, and worked forward from that point, substantive agreements to further promote the export of U.S. cars and auto parts would have been possible. Yet the many proposals raised by Japan were simply rejected out of hand by the U.S. side, for lack of numerical targets.
For the record:
12:00 a.m. May 24, 1995 For the Record
Los Angeles Times Wednesday May 24, 1995 Home Edition Metro Part B Page 6 Letters Desk 3 inches; 95 words Type of Material: Correction
U.S.-Japan trade--Due to a transcription error, part of a paragraph was omitted in a May 18 letter from Seiichiro Noboru, consul general of Japan. The paragraph should read:
The fact of the matter is that 80% of cars sold in Japan have engine displacements of under 2,000 cc. There are exactly zero Big 3 models offered in Japan in this critical market segment. In addition, there are only three Big 3 autos sold in Japan with right-hand-side steering wheels, while European makers have introduced over 100 right-hand-drive models. It always helps to fish where the fish are, and as U.S. auto makers enter the major market segments, their share in Japan is expected to rapidly expand.
The tired characterization of Japan’s auto market as “closed” is 10 years past being accurate. The percentage of imported cars in the Japanese market is 8.1% and rising. U.S. auto sales in Japan are up 68% in 1994--all without the blessing of a government-to-government agreement.
The fact of the matter is that 80% of cars sold in Japan have engine displacements of under 2,000 cubic centimeters. There are exactly zero Big 3 autos sold in Japan with right-hand-side steering wheels, while European makers have introduced over 100 right-hand drive models. It always helps to fish where the fish are, and as U.S. auto makers enter the major market segments, their share in Japan is expected to rapidly expand.
Personally, I fear that the U.S. announcement of sanctions is not only a flagrant violation of the World Trade Organization agreement, but is counter-productive. Japan is prepared to make its case before the WTO, but the preferred course would be a greater receptivity on the part of the U.S. government toward Japan’s concessions and dropping demands for numerical targets in the private sector--targets which any government of a market-driven nation would be disinclined to accept.
SEIICHIRO NOBORU
Consul General of Japan
Los Angeles
