Learning lessons in the lift

VIEW FROM TOKYO

Ryutaro Hashimoto, Japan's formidable Minister of International Trade and Industry, had a nasty experience in Canada the other week. Arriving for a round of tense discussions with Mickey Kantor, the US trade negotiator, Mr Hashimoto and his 16-strong entourage climbed into a hotel lift; the lift was made to take 12.

Between floors it came to a halt, and for 20 sticky minutes, Japan's finest economists and deal-makers stood shoulder to shoulder making nervous small talk with their glowering minister. The incident received little coverage in the West, but in Japan it suggested a valuable lesson. For this was no ordinary hotel lift. As the Kyodo news agency pointed out: "The elevator was of US manufacture."

Luckily, the Japanese and Americans were in Canada to talk about US cars not lifts, but the incident symbolised the issues which have clogged their talks over the last 20 months. Throughout the 21,000 man-hours of talks, the US has been repeating three principal demands: more Japanese dealerships in foreign cars, greater US access to the domestic replacement parts market and increased purchases by Japanese manufacturers of US auto-parts.

Exasperated by Japan's failure to come up with any specific goals, Mr Kantor insisted that Japanese manufacturers spell out targets for increased purchases of foreign parts. The targets would be "voluntary", he insisted. But when Mr Hashimoto failed to volunteer them, the talks stopped, a complaint was lodged with the World Trade Organisation and sanctions were promised. They are likely to be published in detail in the next few days.

On their own terms, the Americans have a watertight case. Japan's trade surplus with America is $65.9bn (£41bn), 56 per cent of which is accounted for by vehicles and auto parts. "Over the last 25 years, Japan has sold over 40 million cars to the US, while we sold only 400,000 cars to Japan," a senior US official said in Tokyo last week. "Our market is the largest open market in the world, and it's been indispensable to the growth of the Japanese economy. Japan's market is the largest closed market in the world: it needs to be opened up. These are not opinions, they are facts. Somebody is right, and somebody is wrong."

But several things about this tough approach grate on the Japanese. For a start there is the inherent contradiction in demanding managed export quotas to bring about "free" trade. Then there is the timing of the demands which could hardly come at a worse moment. Japanese exporters in all sectors have been struck hard by the surging yen.

Analysts calculate that the 11 Japanese vehicle makers have the combined capacity to build 14 million cars and trucks a year, around 4 million more than global markets can sustain. Since the bursting of the bubble, painful measures have been taken to improve efficiency and streamline production - but any profits have been swept away by the yen's rise. Toyota recently hinted that it may have to lay off workers, a traumatic step in a country dedicated to lifetime employment.

Above all, Japan refuses to accept the US's right-and-wrong analysis. In theory, the government accepts that it does not import enough and the need for reform. In the 1993 Economic Framework agreement, the two agreed to "a significant expansion of purchases of foreign parts by Japanese firms". There are plenty of reasons for believing that this is taking place.

Quite apart from the slowing down of Japanese exports, total car imports increased by 10 per cent last month against the previous April. The increase for 1993 was 50 per cent. The US points out that, although the percentages have risen, the actual figures are still small. But sceptics cite another reason for Kantor's relentlessness: the fact that, although Japanese consumers are buying more foreign cars, they are less inclined than ever to buy American. British car sales to Japan rose 15 per cent in April to 2,186 units.

But US sales rose by only 4.7 per cent to 7,165, and among the Big Three American auto-makers, the loudest critics of Japan, only Ford's figures were up.

The Americans insist that free trade is their goal, not simply a bigger market share for US companies. "If it's free and open, we're prepared to lose," insisted an official last week. But the European sales figures suggest the problem lies not with Japan's unwillingness to admit foreign competition so much as in America's failure to make cars Japanese consumers want. The vehicles most popular here are saloons. Japan, like Britain, drives on the left but the Big Three offer no right-hand drive model in that saloon category.

To many in Tokyo, the US position is pure arrogance, based on the assumption that, if the Big Three can't make it in Japan, then the markets must by definition be closed.

The European Union, and its Commissioner Leon Britton, have been conspicuous by their failure to offer any explicit support to the US: European carmakers, after all, have a bigger share of Japan's market than they do of America's - 4.9 per cent as opposed to 3.2 per cent.

Since the post-war American Occupation, the US share of Japan's imports has shrunk, as that of Europe and Asia has increased. America's traditional importance as Japan's global "big brother" has dwindled in the post-Cold War vacuum.

America no longer seems to offer the ingredients valued above all by Japanese consumers: quality and after-service.

For that, they turn to their own brands - and if the rest of the world is buying Japanese, why shouldn't the Japanese?

Justly or not, US cars are seen as uneconomical and unreliable. Just like American lifts.

Start your day with The Independent, sign up for daily news emails
Voices
There will be a chance to bid for a rare example of the SAS Diary, collated by a former member of the regiment in the aftermath of World War II but only published – in a limited run of just 5,000 – in 2011
charity appealTime is running out to secure your favourite lot as our auction closes at 2pm tomorrow
News
Claudia Winkleman and co-host Tess Daly at the Strictly Come Dancing final
people
Arts and Entertainment
Caroline Flack became the tenth winner of Strictly Come Dancing
tvReview: 'Absolutely phenomenal' Xtra Factor presenter wins Strictly Come Dancing final
News
Elton John and David Furnish will marry on 21 December 2014
people
PROMOTED VIDEO
News
people
Life and Style
A still from the 1939 film version of Margaret Mitchell's 'Gone with the Wind'
life
Arts and Entertainment
J Jefferson Farjeon at home in 1953
booksBooksellers say readers are turning away from modern thrillers and back to golden age of crime writing
Sport
Amir Khan is engaged in a broader battle than attempting to win a fight with Floyd Mayweather
boxing Exclusive: Amir Khan reveals plans to travel to Pakistan
News
Stacey Dooley was the only woman to be nominated in last month’s Grierson awards
mediaClare Balding and Davina McCall among those overlooked for Grierson awards
Voices
Joseph Kynaston Reeves arguing with Russell Brand outside the RBS’s London offices on Friday
voicesDJ Taylor: The great tradition of St Paul and Zola reached its nadir with a worker's rant to Russell Brand
News
Twitchers see things differently, depending on their gender
scienceNew study shows that birdwatching men have a lot in common with their feathered friends...
News
i100
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'
Marian Keyes: The author on her pre-approved Christmas, true love's parking implications and living in the moment

Marian Keyes

The author on her pre-approved Christmas, true love's parking implications and living in the moment
Bill Granger recipes: Our chef creates an Italian-inspired fish feast for Christmas Eve

Bill Granger's Christmas Eve fish feast

Bill's Italian friends introduced him to the Roman Catholic custom of a lavish fish supper on Christmas Eve. Here, he gives the tradition his own spin…
Liverpool vs Arsenal: Brendan Rodgers is fighting for his reputation

Rodgers fights for his reputation

Liverpool manager tries to stay on his feet despite waves of criticism
Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

Amir Khan attacks the Taliban

'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
Michael Calvin: Sepp Blatter is my man of the year in sport. Bring on 2015, quick

Michael Calvin's Last Word

Sepp Blatter is my man of the year in sport. Bring on 2015, quick