U.S.-JAPAN TRADE ACCORD : Still Contentious
In addition to their new auto accord, the United States and Japan have numerous other trade agreements--as well as some continuing disputes. Among the most important:
Trade Imbalance
Comprehensive efforts to cut the huge U.S. trade deficit with Japan, which stood at $66 billion last year, began with the 1989 Structural Impediments Initiative and was redrawn in the 1993 Framework for a New Economic Partnership. In both, Japan agreed to stimulate its economy to help increase imports and eliminate a range of trade barriers. But the deficit is still the key source of U.S.-Japan trade friction.
Semiconductors
The 1986 Semiconductor Trade Agreement committed Japan to increasing purchases of chips, setting a target of 20% for the foreign share of the Japanese chip market. The agreement was renewed in 1991 and again in ‘93, and it remains in effect until the end of this year. The United States hopes to renegotiate it to make further progress. The foreign share is now 22.8%.
Aviation
The United States is demanding additional rights to flights that stop in Japan and pick up passengers and cargo headed for other places in Asia. But Japan says a 1952 agreement governing aviation is unfair, and it wants to reduce U.S. domination of air routes.
Retail Distribution
Eastman Kodak contends that Fuji Photo Film, with Japanese government help, took control over film distributors to limit foreign access to Japanese retailers nationwide. In a separate development, an agreement easing restrictions on building large stores gave Toys R Us access to the Japanese market.
Agriculture
A 1994 accord lowering import barriers to U.S. apples came after decades of agreements for stepped-up imports for goods ranging from citrus to beef to rice.
Law, intellectual property
The two nations agreed last year to narrow their differences on intellectual property rights. U.S. software companies are still concerned about what they say is Japan’s inadequate protection of software copyrights.
High Technology
A 1994 agreement adds to a string of previous deals calling on the Japanese government to boost procurement of foreign medical technology and communications equipment. A separate Motorola agreement commits Japan to giving the company fair access to its cellular phone market.
Construction
A 1994 agreement opens Japanese public works projects to foreign bidders. Questions have surfaced as to whether its terms are being properly implemented.
Financial services: An agreement this year allows foreign companies to manage some Japanese pension money. Last year, Japan agreed to deregulate its insurance industry.
Top 10 Japanese Exports to the U.S. in 1994
Rank Commodity Value, in billions 1 Road vehicles $33.9 2 Office machinery 18.1 3 Electrical machinery, apparatus and appliances 15.5 4 Telecommunications and sound recording equip. 9.2 5 Power-generating machinery 5.6 6 General industry machinery 5.2 7 Specialized machinery 4.6 8 Miscellaneous manufactured articles 4.1 9 Photo equipment and optical goods 3.7 10 Professional scientific equipment 2.4
Other exports: $16.8 billion Total 1994 exports to U.S.: $119.1 billion
Top 10 U.S. Exports to Japan in 1994
Rank Commodity Value, in billions 1 Electrical machinery $4.0 2 Office machinery 3.8 3 Transport equipment 3.5 4 Cork and wood 3.0 5 Road vehicles 2.9 6 Miscellaneous manufactured articles 2.7 7 Cereals 2.5 8 Professional scientific equipment 2.2 9 Meat 2.2 10 Fish 1.8
Other exports: $24.9 billion Total 1994 exports to Japan: $53.5 billion
