THE PRESS FRIDAY, JANUARY 29, 1982. Japan’s trade barriers

Press, 29 January 1982, Page 12

THE PRESS FRIDAY, JANUARY 29, 1982. Japan’s trade barriers

The announcement that Japan would dismantle some of its trade barriers towards the United States and Europe was important to the three countries and to world trade as a whole. This is not the first time recently that Japan has expressed its intentions; but the repetition of the intention within a short period and during intensive trade negotiations with the European Economic Community suggests that the matter is being taken seriously. The announcement comes after many months of complaints from the United States and from Europe about the difficulties of their exporters in competing within the Japanese market. In the same period, Japan has done extremely well in American and European markets. One charge against Japan has been that it has benefited from free trade in other markets while it has rigorously protected its own. Japan appears to have been persuaded to take measures under threats that the United States would retaliate with its own trade restrictions.

Important trade talks among the United States, Europe, and Japn were held this month in Florida. Mr Shintara Abe, Japan’s International Trade Minister, attended. Although Japan had been talking of reducing trade barriers before these talks were held, any lingering doubts were swept away. Mr Abe came away from the United States with the clear idea that a strong mood of protectionism prevailed in the United States Congress. The plan being formed in Congress was to restrict trade from countries that restricted American trade. Japan correctly interpreted such reciprocal trade measures as protectionism under a new name.

Japan has as much as any country to fear from an outbreak of trade protection. In. a recent statement the Japanese Foreign Minister, Mr Sakarauchi, said that he believed Japan and the United States, both being leaders in‘world trade, should maintain the free and open trade system: The United . States ’ Congress appears determined that this expression of idealism from Japan about world trade will be matched by deeds.

In the past, Congressional sentiment has occasionally been strong for trade protection and has come to be modified either by departmental views or by persuasion from the White House. So that Japan knew where it stood, the United States Secretary of Commerce, Mr

Malcolm Baldridge, has said that, if Japan did not ease restrictions on American trade, he would support Congressional efforts to restrict Japanese trade reciprocally. The ball is now in Japan’s court. The question remains whether Japan is going to do enough in its measures to satisfy some of the demands of the United States. Within Japan, moves are afoot to persuade the domestic suppliers of the market that it is necessary for Japan to import more from Europe and the United States. The recent reshuffle of the Japanese Cabinet was described as part of an attempt to be more accommodating on international trade. Japan has already agreed to an early reduction of some tariffs. The tariffs had been due to be reduced later according to a formula reached at the Tokyo round of the General Agreement on Tariffs and Trade. The new measures appear mostly to be non-tariff barriers, such as rules on specifications and inspection of goods. Few, if any, of these seem likely to affect New Zealand directly, though New Zealand has been familiar with the “specifications” limits through its timber trade. With the exception of bull semen, most of the items are industrial goods of one kind or another. New Zealand’s exports to Japan' are heavily agricultural. Nevertheless, New Zealand is affected by the moves, and by the reactions to the moves, in a number of ways. The first is that New Zealand has a great deal to lose should an outbreak of world protectionism occur. For this reason New Zealand must hope that the Japanese make concessions sufficiently substantial to avert any strongly protectionist moves in the United States. If protectionism gained a hold it could spread rapidly. New Zealand would be certain to be one of the biggest losers. Another consideration is that Japan sees the need to make trade concessions in favour of the United States and Europe to attempt to balance some of its, large trade surpluses with them. Care will be needed to ensure that these concessions are not made at the expense of New Zealand. Australia is already concerned that Australian beef is being excluded from Japan in favour of American beef. The trade giants of the world can have a beneficial effect on world trade but, as they adjust to the demands of one another, the smaller countries have to watch warily to preserve their own interests.