Foreign Businesses in Japan Cautious on New Trade Package
TOKYO (AP) _ Foreign businessmen said today they do not anticipate any dramatic decline in Japan’s huge trade surpluses despite the government’s new ″action program,″ and they expect continued friction between Japan and its trading partners.
Most businessmen interviewed by The Associated Press said the program, announced Tuesday, was a step in the right direction.
But many agreed with Dominic George, head of Morgan Guaranty Trust’s treasury department, who called it, ″still not enough, still relatively timid.″
″If you ask me if it’s going to make us happy or reduce the trade imbalance I’d have to say no,″ George said.
William Watson, chairman of the National Semiconductors Industry Association, said the simplified standards for certification of imports and reduction of bureaucracy ″beneficial,″ but said he did not see anything of substance in the plan that specifically affected the electronics industry.
Roy Allen of Bankers Trust, said he saw ″no really significant new area″ in the package, and said it will be ″some time before any benefits come of it.″
He said the financial measures included in the package had been announced previously, ″but as far as we’re concerned, the financial measures are being well implemented ... financial deregulation is going very well.″
″We’ll probably see results from the package in the financial market before we will in trade,″ he said.
Foreigners have sought deregulation in Japan both to allow them to sell more financial services, and to make Japan’s yen more attractive, raising its value and in effect lowering the price of foreign goods.
Despite Japan’s hope that the measure would head off foreign retaliatory measures, George said he would not be surprised to see the U.S. Congress discussing protectionist legislation when it returns from its recess.
Robert Hitchner, manager of International Investment Consultants, agreed, saying trade problems have become highly politicized.
″The action plan won’t have any positive effect on relations with Europe and the United States. It won’t change the trade imbalance and doesn’t even look like it will, so it might even have a negative effect,″ he said.
Jim Bestal, an economist for Baring Brothers and Co., estimated there is a 70 percent chance the United States will introduce new tariffs and quotas against Japan.
″Trade friction is not a rational issue,″ he said. ″The Japanese market is not as closed as the European market and it is about the same as the U.S. market.″
He said protectionist groups will overlook tariff reductions in Tuesday’s package ″because the Japanese government didn’t address controversial points,″ such as chocolate and cheese, for which foreign governments had sought lower tariffs.
Allen agreed that a lack of immediate results from the package is likely to mean continued criticism from Congress.
″Those who created the package were considering a longer time frame than that considered by the people proposing trade sanctions″ in the United States, he said.