Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 5, 1992 TAG: 9201050181
SECTION: NATIONAL/INTERNATIONAL PAGE: A-4 EDITION: METRO
SOURCE: The Washington Post
DATELINE: TOKYO LENGTH: Medium
LOWER TARIFFS NOT ONLY KEY TO OPENING JAPANESE MARKETS
Making the Japanese market more receptive to U.S. goods is a lot more complicated than President Bush makes it sound.In an obvious reference to Japan, Bush said recently that his trip to Asia is aimed at "breaking open markets that shut out American products."
Robert Mosbacher, the outgoing commerce secretary, likewise vowed that the mission will help knock down trade barriers, chiding Tokyo for "not allowing U.S. goods into Japan."
It is an image of a Japan that, in the words of French Prime Minister Edith Cresson, is "hermetically sealed" - a nation where foreign products are still blocked by a combination of tariffs and legal restrictions, and where government officials use their bureaucratic powers to block would-be importers. It suggests that all that is needed is some tough, pointed demands for Tokyo to change its laws and regulations and adopt U.S.-style free-trade policies.
But the problems facing most American and other foreign businesses here have little to do with tariffs, import restrictions or bureaucratic obstructions.
Tokyo does maintain protectionist barriers against some agricultural products, such as the near-total ban on imported rice. But in manufactured goods - the area that economists say is most important because it involves high-skill jobs - Japan has virtually dismantled its once-high wall of tariffs and quotas; and much of its trade bureaucracy is engaged in promoting imports, not discouraging them.
The chief factor making the Japanese market difficult to penetrate now, even for foreign companies offering high-quality products and service, is in substantial part the deep-rooted corporate practice of Japanese firms to maintain tight linkages with one another, according to a broad consensus of experts that include foreign critics, business executives and Japanese officials.
Much more than U.S. firms, Japanese companies forge semi-permanent ties with their suppliers, customers and distributors. They stick together partly because of a cultural affinity for group relationships, and partly because the Japanese say they believe - with some justification - that such stable alliances provide economic payoffs by fostering long-run strategic thinking and beneficial cooperation.
In many cases, these bonds involve keiretsu affiliations - membership in corporate "families" such as the Mitsubishi, Sumitomo and Mitsui groups. But even when no formal keiretsu is involved, ties between Japanese firms tend to be hard to break.
"It's bureaucrats - but not bureaucrats in the public-sector sense," said David Baskerville, vice president for Asia at Siecor International Corp., a maker of fiber-optic cable, which has achieved considerable success in Japan. "Business people here are slow to admit any outsider."
Many American companies fail to realize how much extra effort is required to overcome this obstacle, Baskerville said.
So although Japan is readying a number of trade concessions for Bush's visit here this week, there are reasons to doubt whether these moves will contribute much toward the president's goal of generating job-producing American exports.
Few measures that Japan could conceivably take would increase its imports of American goods - which totaled $48.58 billion in 1990 - enough to help lift the $5 trillion-plus U.S. economy out of recession.
One step that Tokyo is reportedly considering, for example, is a modest tax rebate for Japanese who buy imported cars. The trouble is, most of the benefit would likely go to European luxury carmakers, which far outsell American autos here.
In short, the problems of improving access to the Japanese market have become much more subtle and difficult to solve than they were 10 to 20 years ago, when Tokyo still maintained major formal import barriers.
But some analysts contend that the Japanese business mind-set is so unusual that, despite the lack of formal barriers, the market will never be truly fair or open, at least not in the way Americans use those words.
Clyde V. Prestowitz Jr., a former U.S. trade negotiator and author of a book on Japan titled "Trading Places," noted that in the United States a "fair" system means that a customer awards business to whoever offers the best terms.
"In Japan . . . fairness has a lot to do with loyalty," Prestowitz said. "If I've been dealing with you for 20 years, and some guy comes along and offers me a 5 percent price break, it isn't `fair' for me to switch to him. The idea that a Toyota dealer would sell anything other than Toyotas is distasteful, not only to Toyota, but to the public at large. In that sense, the Japanese market is not open, and it never will be."