Observations on U.S.-Japan Trade and Financial Relations

GAO discussed trade and financial relations between the United States and Japan, focusing on: (1) the impact of the Market-Oriented Sector-Selective (MOSS) talks on Japanese trading practices and policies; and (2) U.S. firms' concerns regarding Japanese market access. GAO noted that the MOSS talks: (1) addressed trading concerns in the telecommunications, electronics, medical equipment, forestry products, and automotive parts sectors; (2) eliminated several restrictive trading practices, eased product testing, approval, and licensing requirements, reduced tariffs, established intellectual property protection for original designs, and increased information exchange; (3) led to fairer treatment of U.S. products in the Japanese market, although significant barriers to market access remained; and (4) were influenced by timing, market barriers, and the degree of compatibility between U.S. and Japanese interests. GAO also noted that: (1) Japanese financial institutions' interest-rate controls and restrictive access to low-cost deposits affected U.S. firms' abilities to compete; and (2) U.S. financial institutions believed that they received the same treatment as Japanese institutions in some areas, but also reported a lack of access to certain financial sectors.