US gives Japan a month to open market

The US yesterday formally announced it would impose trade sanctions to try and force Japan to open up its domestic car and car component market to American products, and said it would take its complaints about Japanese protectionism to the new World Trade Organisation in Geneva.

What bids to be the most bruising trade conflict in recent years between the two countries finally came into focus as Mickey Kantor, the US Trade Representative, said a detailed list of goods liable to extra tariffs would be issued in the next few days and - barring a settlement in the meantime - take effect some 30 days later.

Mr Kantor himself gave no details, but the measures are expected to be aimed especially at luxury cars, of which Japan exported 200,000 to the US last year. Press reports say these would be hit by tariffs of up to 20 per cent. American distributors for the Japanese companies said the models would be driven out of the US market if such sanctions were applied.

But if Mr Kantor's uncompromising language yesterday is any yardstick, they will be. Japan, whose trade surplus with the US tops $60bn (£35bn) a year, $37bn of that accounted for by the car sector alone, "continues to thwart open and equitable trade" with what he called "unreasonable and discriminatory" practices.

US officials were unwilling to quantify the sanctions last night. But given the $35,000 and upward price definition of a luxury car, they seem bound to affect Japanese imports worth several billion dollars. Even so Mr Kantor resisted the label of a "trade war" - "That's giving hyperbole a bad name," he said.

Whatever the economic risks, the trade showdown is eminently sound politics for President Clinton as the race for the White House in 1996 starts to heat up.

The sanctions will please not only domestic carmakers but other domestic industrial sectors which have similar grievances against Japan. More important, they will delight the US labour movement, a naturally Democrat but also a strongly protectionist constituency, whose loyalties were strained by the Nafta free trade agreement with Mexico.

Japan was standing firm yesterday in its resolve not to accede to the US demand for "voluntary" quotas on car parts, and officials reiterated the government's intention of bringing any sanctions before the World Trade Organisation. The Japanese government cannot afford to be seen to compromise with the US over the auto parts issue.

Japanese exporters in all industries have been badly shaken by the yen's rapid rise against the dollar, which is widely believed to have slowed the fragile recovery of the Japanese economy after half a decade of recession. Beset by complaints from its own companies, Tokyo is in no mood to accelerate the decline of its already beleaguered manufacturers. Month-on-month figures released this month revealed that the Japanese trade deficit was down on last year.

Japanese business leaders are publicly backing officials' tough stance. But they are also urging the government to take action to cut the nation's massive trade surplus and loosen the regulatory stranglehold on the economy. "The US demands are indeed unreasonable and should not be accepted," said Takeshi Nagano, chairman of the Japan Federation of Employers' Associations. "But there is also a problem on the side of Japan, which does not promote market opening and deregulation."

Domestic problems, including the Kobe earthquake and the recent spate of terrorist attacks, have sapped political morale and rendered uncertain the future of the Prime Minister, Tomiichi Murayama, and his unpopular coalition government.

The Finance Minister, Ryutaro Hashimoto, who put up an unusually tough front in trade talks in Vancouver last week, has long been tipped as a future prime minister. His uncompromising stance will have done no harm to his political reputation and prospects in Japan.

Not to be underestimated is the genuine feeling within Japan that America is barking up the wrong tree in its insistence that American cars are given an unfair deal. Other foreign car manufacturers such as BMW have spent years researching and adapting to the Japanese market, and have been rewarded by a burgeoning share of the market.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
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 General

Recruitment Genius: Massage Therapist / Sports Therapist / Physio / Osteopath

£12000 - £24000 per annum: Recruitment Genius: An opportunity has arisen for o...

Recruitment Genius: Account Manager / Sales Executive - Contract Hire

£35000 - £60000 per annum: Recruitment Genius: This industry leader provides c...

Recruitment Genius: Project Coordinator

£28000 - £30000 per annum: Recruitment Genius: A Project Coordinator is requir...

Recruitment Genius: Area Sales Manager - Midlands

£20000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Day In a Page

John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
Forget little green men - aliens will look like humans, says Cambridge University evolution expert

Forget little green men

Leading evolutionary biologist says aliens will look like humans
The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

The Real Stories of Migrant Britain

An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy
UK heatwave: Temperature reaches 39.8 degrees on Central Line - the sweatiest place in London

39.8 degrees recorded on Tube

There's hot (London) and too damn hot (the Underground). Simon Usborne braved the Central line to discover what its passengers suffer
Kitchens go hi-tech: From robot chefs to recipe-shopping apps, computerised cooking is coming

Computerised cooking is coming

From apps that automatically make shopping lists from your recipe books to smart ovens and robot chefs, Kevin Maney rounds up innovations to make your mouth water
Jessie Cave interview: The Harry Potter star has published a feminist collection of cartoons

Jessie Cave's feminist cartoons

The Harry Potter star tells Alice Jones how a one-night stand changed her life
Football Beyond Borders: Even the most distruptive pupils score at homework club

Education: Football Beyond Borders

Add football to an after-school homework club, and even the naughtiest boys can score
10 best barbecue books

Fire up the barbie: 10 best barbecue books

We've got Bibles to get you grilling and smoking like a true south American pro
Wimbledon 2015: Nick Bollettieri - Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power

Nick Bollettieri's Wimbledon Files

Junk balls and chop and slice are only way 5ft 1in Kurumi Nara can live with Petra Kvitova’s power
Ron Dennis exclusive: ‘This is one of the best McLaren teams ever – we are going to do it’

‘This is one of the best McLaren teams ever – we are going to do it’

Ron Dennis shrugs off a poor start to the season in an exclusive interview, and says the glory days will come back
Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Cheaper energy on the way, but it's not all sunshine and rainbows

Cheaper energy on the way, but it's not all sunshine and rainbows

Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most