Does revisionism work? U.S. trade strategy and the 1995 U.S.-Japan auto dispute

Pacific Affairs

Volumn 70, Issue 4, 1997, Pages

  Maswood, S Javed ^a  

^a GRIFFITH UNIVERSITY   (Australia)

Author keywords

[No Author keywords available]

Indexed keywords

AUTOMOBILE TRADE; ECONOMIC RELATIONS; TRADE DISPUTE; TRADE POLICY;

JAPAN; USA;

EID: 33749862527     PISSN: 0030851X     EISSN: None     Source Type: Journal    
DOI: 10.2307/2761322     Document Type: Article

References (80)

1. One of the earliest trade disputes between Japan and the U.S. involved Japanese export of textiles. This was the subject of a major study by I. M. Destler, Haruhiro Fukui and Hideo Sato The Textile Wrangle: Conflict in Japanese-American Relations, 1969-1971 (Ithaca and London: Cornell University Press, 1979).
2. Since then, there have been many more studies on the different aspects of U.S.-Japan trade relations. The English language literature includes I. M. Destler and Hideo Sato, Coping with U.S.-Japanese Economic Conflict (Mass: Lexington Books, 1982);
3. Clyde V. Prestowitz, Trading Places: How American Allowed Japan to Take the Lead (Tokyo: Charles E. Tuttle, 1988);
4. Edward J. Lincoln, Japan's Unegual Trade (Washington, DC: The Brookings Institution, 1990);
5. Paul R. Krugman, ed., Trade with Japan: Has the Door Opened Wider? (Chicago: University of Chicago Press, 1991);
6. P. Oppenheim, Trade Wars: Japan Versus the West (London: Weidenfeld and Nicolson, 1992);
7. and Pietro S. Nivola, Regulating Unfair Trade (Washington, DC: The Brookings Institution, 1993). As can be expected the literature is varied but one noticeable divide is that between works that tend to find fault either in unfair Japanese trade practices or in the general macroeconomic balance between the two countries.
8. The term Nichibei is a combination of the Japanese words for Japan (Nihori) and America (Beikoku) and is in common usage in Japan. In the U.S. Robert Gilpin used it to highlight the integrated nature of the two economies. See Robert Gilpin, The Political Economy of International Relations (Princeton: Princeton University Press, 1987), p. 6.
9. The Framework Talks also included negotiations on U.S. demands for better market access in glass, insurance, telecommunications and medical equipment. Agreement in these sectors was reached in 1994.
10. They include, for example, Mickey Kantor, the U.S. Trade Representative, Laura Tyson, the chairperson of the Council of Economic Advisors; and Roger Altman, the deputy secretary of treasury. By contrast, the earlier Reagan (1981-1989) and Bush (1989-92) administrations were more deeply committed to free trade principles.
11. Chalmers Johnson, Japan, Who Govern?: The Rise of the Developmental State (New York and London: W. W. Norton, 1995).
12. Karel van Wolferen, "The Japan Problem," Foreign Affairs, Vol. 65, no. 2 (1986/87).
13. See also "The Japan Problem Revisited," Foreign Affairs, vol. 69, no. 4 (Fall 1990).
14. Prestowitz, Trading Places.
15. James Fallows, "Containing Japan," Atlantic Monthly, vol. 263, no. 5 (May 1989).
16. See P. Wilson, "US Turns Japan Attack to Aviation Rights," The Australian, July 1-2, 1995, p. 16.
17. See S. Brull, "Trade Talks Give Japan Big Boost in Confidence: Tokyo moves into Driver's Seat after Standing Up to US," Reprinted in The Straits Times (Singapore), July 1, 1995, p. 35.
18. See The Economist (London), September 2, 1995, p. 23.
19. Frances M. Rosenbluth, Financial Politics in Contemporary Japan (Ithaca and London: Cornell University Press, 1989).
20. Dennis J. Encarnation and Mark Mason, "Neither MITI nor America: The Political Economy of Capital Liberalization in Japan," International Organization, vol. 44, no. 1 (Winter 1990).
21. Karel van Wolferen, The Enigma of Japanese Power: People and Politics in a Stateless Nation (Tokyo: Charles E. Tuttle, 1993), p. 514.
22. Chalmers Johnson, "Political Institutions and Economic Performance: The Government-Business Relationship in Japan, South Korea and Taiwan," in Frederic C. Deyo, ed., The Political Economy of New Asian Industrialism (Ithaca and London: Cornell University Press, 1987).
23. James Fallows, Looking at the Sun: The Rise of the New East Asian Economic and Political System (New York: Pantheon Books, 1994), p. 8.
24. Johnson, Japan, Who Governs? p. 54.
25. M. Kantor, "U.S. Trade Policy in Transition: Globalization in a New Age," Law and Policy in International Business, vol. 25, no. 4 (Summer 1994), p. 1234 (emphasis added).
26. The Straits Times, July 15, 1995, p. 9.
27. Johnson, Japan, Who Governs?
28. Elsewhere, Johnson writes that the "Japanese are skilled in letting foreigners think they have actually accomplished something." See C. Johnson, "MITI, MPT, and the Telecom Wars: How Japan Makes Policy for High Technology," in Chalmers Johnson, Laura D'Andreas Tyson and John Zysman, eds., Politics and Productivity: The Real Story of Why Japan Works (Mass: Ballinger Publishing, 1989), p. 232.
29. Laura Tyson, Who's Bashing Whom?" Trade Conflict in High-Technology Industries (Washington, DC: Institute for International Economics, 1992), p. 95.
30. S. Okamatsu, "Shijo keizai o mushi shita yokyu ni ojihajimetara kiri ga naku naru," Shukan Keizai, June 13, 1995, pp. 27-28.
31. See also K. Ohe, "A Case Study of the United States-Japan Semiconductor Agreement," Australian Business Law Review (April 1989), p. 138.
32. Tyson, Who's Bashing Whom? p. 109.
33. "Foreign Chips Lose Ground in Japan Market," The Asian Wall Street Journal, June 16-17, 1995, p. 6.
34. Section 301 and Super 301 of the U.S. Trade Law are similar in empowering the U.S. trade representative to retaliate against unfair trade practices. Super 301 goes a step further in mandating a rigid timetable for negotiations and the imposition of trade sanctions. This was added in 1988 and lapsed in 1990, but can be reactivated.
35. Tyson, Who's Bashing Whom? p. 258.
36. Tyson, Who's Bashing Whom? p. Ibid., p. 259.
37. C. Barshefsky, "The Future of U.S.-Japan Trade Relations," Law and Policy in International Business, vol. 25, no. 4 (Summer 1994), p. 1296.
38. van Wolferen, The Japan Problem, p. 302.
39. van Wolferen, The Japan Problem, p. Ibid., p. 290.
40. Encarnation and Mason, Neither MITI nor America, p. 28.
41. See S. J. Maswood, Japan and Protection: The Growth of Protectionist Sentiment and the Japanese Response (London: Routledge, 1989), chapter 4.
42. In 1990 imports were U.S. $8.5 billion, or less than 10 percent of auto parts production in Japan. The target of U.S. $19 billion was an increase of around U.S. $3 billion over a November 1991 plan of the Japanese auto makers to increase imports to U.S. $15.9 billion by 1994. See Nihon Keizai Shinbun, January 9, 1992, p. 10. In 1992 auto parts imports amounted to U.S. $9 billion.
43. See K. Shimokawa, The Japanese Automobile Industry: A Business History (London: The Athlone Press, 1994), p. 77.
44. The Washington Post, January 10, 1992, p. A15.
45. Asian Wall Street Journal, June 29, 1995, p. 1.
46. Nihon Keizai Shinbun, May 26, 1996, p. 5.
47. See M. Baker, "Evaluating Japanese Diplomatic Performance," in Gerald L. Curtis, ed., Japan's Foreign Policy after the Cold War: Coping with Change (New York: M. E. Sharpe, 1993).
48. See E. Lachica, "Taming America: Asians Say WTO Improves their Odds in Trade Spats," Asian Wall Street Journal, October 11, 1995, p. 1.
49. See The Straits Times, June 24, 1995, p. 34.
50. The Straits Times, 1995, p. Ibid., p. 6.
51. The New York Times, November 24, 1994, p. 1.
52. "Nichi-bei nikoku de kaiketsu o nozomu," Asahi Shinbun, May 2, 1995, p. 11.
53. Asahi Shinbun, July 1, 1995, p. 11.
54. M. Sato, "Nichibei jidosha kosho no misshi tachi, Bungeishunju (September 1995), p. 154.
55. Robert D. Putnam, "Diplomacy and Domestic Politics: The Logic of Two-Level Games," International Organization, vol. 42, no. 3 (Summer 1988).
56. Encarnation and Mason, Neither MITI nor America, p. 53.
57. Encarnation and Mason, Neither MITI nor America, p. 53. Ibid.
58. Frances M. Rosenbluth, Financial Politics, p. 90.
59. P. Ennis, "U.S. and Japan Reverse Roles in Economic Framework Negotiations," Tokyo Business Today, vol. 61, no. 1 (October 1993), p. 57. MITI's primary concern, at the time, was that the U.S. would attempt to elevate the 1992 private sector agreement ton auto parts into a government-to-government deal.
60. "Uazumi yokyu tekkai o unagasu," Asahi Shinbun, May 9, 1995, p. 11.
61. Kent E. Calder, Crisis and Compensation: Public Policy and Political Stability in Japan, 1949-1986 (Princeton: Princeton University Press, 1988).
62. D. Burstein, Yen!: The Threat of Japan's Financial Empire (Sydney and Auckland: Bantam Books and Schwartz Publishing, 1988), p. 29.
63. See Japanese Agricultural Policies: A Time for Change (Canberra: The Australian Bureau of Agricultural and Resource Economics, Project No. 11325, AGPS), p. 55.
64. Michael R. Reich, Yasuo Endo and C. Peter Timmer, "Agriculture: The Political Economy of Structural Change," in Thomas K. McCraw, ed., America versus Japan (Mass: Harvard Business School Press, 1986), p. 182.
65. M. Sato, Nichibei jidosha, p. 150.
66. "Japanese Car Manufacturers Pit Stamina against Threatened U.S. Tariffs," The Asian Wall Street Journal, June 12, 1995, p. 1.
67. International Herald Tribune, June 24-25, 1995, p. 3.
68. Nihon Keizai Shinbun, September 8, 1995, p. 3.
69. See, for example, F. Rosenbluth, "Japan's Response to the Strong Yen: Party Leadership and the Market for Political Favors," in Curtis, ed., Japan's Foreign Policy. According to Rosenbluth, the government did come up with some additional funds to help small businesses but "this did not amount to more than political 'leaning against the wind' and no great sums were doled out" (p. 137).
70. Rosenbluth, Financial Politics, p. 53.
71. MITI's success in 1981 might, at least partially, be explained by the profitability for Japanese manufacturers of voluntary export restraint. See John C. Ries, "Windfall Profits and Vertical Relationships: Who Gained in the Japanese Auto Industry from VERs?" The Journal of Industrial Economics, vol. 41, no. 3 (September 1993).
72. "U.S. Revisionists on Japan are Heard," Asian Wall Street Journal, June 9-10, 1995, p. 8.
73. See Okamatsu, Shijo Keizai, p. 27.
74. Shukan Daiyamondo, June 24, 1995, p. 103.
75. See also Johnson, Japan, Who Governs? p. 229.
76. Ozawa, for example, explained to his biographers that he had a strong antipathy for "politics by bureaucrats." See Edward W. Desmond, "Ichiro Ozawa: Reformer at Bay," Foreign Affairs, vol. 74, no. 5 (September/October 1995), p. 123. Ozawa's actions in replacing Naito may be interpreted as part of a strategy to assert political authority over the bureaucracy.
77. Tyson, Who's Bashing Whom? p. 258.
78. See, for example, V. Reitman, "Japan is Said to be Mulling Auto Subsidies," Asian Wall Street Journal, June 16-17, 1995, p. 1.
79. The Straits Times, August 1, 1995, p. 13.
80. Asian Wall Street Journal, August 3, 1995, p. 5.