The Japan That Can Say "No"(1989)
"The Japan-U.S. Structural Impediments Initiative-Always at America's Pace"
And so the Japan-U.S. Structural Impediments Initiative (SII) came into effect, with the American position being consequentialist or “result oriented”
America, being a free country, won’t forcibly reduce consumption as they fundamentally dislike the idea of government interference in trade. To correct the imbalance therefore they state that Japan must increase its imports. The fact that Japan does not increase imports is credited to a faulty system-both the social structure and economic structure and hence the name “structural impediments initiative”. Their focus is on Japan’s structure and they look to the Japanese Government to take action.
My position on the “structural impediments initiative” is that if you look at the details of US-Japan negotiations to date, everything has been run at America’s pace. If the US wants to focus on semi-conductors, we focus on semi-conductors, if America looks at market share, market share becomes the point of dispute. Now we are dealing with the “structural impediments initiative”. I get the impression that Japan, in each case, is going at America’s pace.
Of course I’m not suggesting that there are no problems with Japan’s structure, and as I said at the beginning, I have said “no” to Japan when necessary, but when dealing with America, I have tried to emphasize Japan’s position.
During negotiation, one doesn’t unilaterally follow the other side’s pace, but should persist in talking from a position of equality. In the current structural impediments initiative, if America takes issue with Japan’s structure, I wish Japan would call into question America’s structure and negotiate from a fairer position.
Firstly, the trade imbalance is the result of trade based on business transactions existing in a free market economy. The seller can’t force his products on the consumer. The reason America imports a lot of Japanese products is because there is a large demand and the reason their exports to Japan are low is that they aren’t providing products the Japanese consumer wants.
From this basis, if you rethink the situation from Japan’s position, looking at American imports from Japan, the situation becomes clear. Now, the only problem is numbers. Just looking at the figures, Japanese consumer products have shown big improvement. Between 1983 and 1988, imports of American electrical household appliances fell by 53%. Televisions and radios fell 45% in 5 years and video decks fell 31%. Consumer non-durables, such as textile products fell 59% (yen based comparison).
The import of durable and non-durable consumer products from America into Japan has fallen. So why has the trade imbalance not been solved?
That is because the import of semi-conductors needed for American manufacturing, the memory chips needed for computers, displays and capital goods as a whole have increased. In the 5 years from 1983 to 1988, the import of machinery increased 82% as a whole, with electrical appliances increasing 49%.
An 83 % increase in computers, 58% increase in integrated circuits, and 36% increase in communications equipment are all concrete examples. American manufacturing is using imported parts to build their own high-tech goods, or importing machines to build their own products.
In Boeing 767 jets, the seats are now made in Japan, as are the stereo and video systems, and parts of the fuselage. Speed sensors in the navigation controls are also Japan made. At the end of last year Steve Jobs announced that the optical memory for NeXT computers would also be made in Japan. (Continued in Volume 15)
( Extract from"Nijuisseki e" (Towards the 21st Century), published by WAC)