Issues and Problems Relating to United States-Japan Trade

A comparative analysis of U.S. and Japanese trade policy studied the experience of firms that have been sucessful in penetrating Japanese markets and those firms which have encountered frustration. The steadily increasing deficit in U.S. trade with Japan between 1976 and 1978 resulted in widespread concerns in the United States. In comparing U.S. and Japanese policies, the sharpest contrast is found in the different approach toward the identification of what is suitable export industry. In the United States there is no analysis of export potential among industries. Japan's commercial policy rests on identifying industries with strong export potential and providing them with support. Japan encourages its strong industries; the United States protects its weak ones. The trade imbalance between the Uniled States and Japan has been caused by a mix of several elements: a weakening in U.S. manufacturing productivity and competitiveness; a trade policy that is import rather than export oriented; and Japanese tariff and nontariff barriers. Although various factors affect U.S. sales to Japan, including the domestic market orientation of U.S. industry, efforts should be made to overcome the inequities in the bilateral trade. U.S. industry must be encouraged to address the underlying economic factors which affect its international competitiveness.