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Same old deal

At one point during the recent trade struggle between the United States and Japan, a negotiator reportedly fell through a chair.
That incident could be the only thing setting apart this U.S.-Japan showdown and last-minute accord on autos from previous ones.
“It’s kind of a normal U.S.-Japan agreement,” former negotiator Clyde Prestowitz told the Washington Post. Echoed trade expert Chalmers Johnson: “I couldn’t be more skeptical.”
Not everyone shares this view, of course. President Bill Clinton said “this breakthrough is a major step toward free trade throughout the world,” and the Big Three in Detroit greeted the news with big smiles.
But using “breakthrough” to describe this “free trade” (read: managed trade) agreement requires quite a stretch.
Did the Japanese government commit to numerical goals on increasing sales of U.S. auto parts and vehicles? No. Did the Japanese auto industry commit to such goals? Not really. Does the pact contain a strong enforcement mechanism should the expected gains for U.S. producers fail to occur? Nope.
The targets outlined in the agreement are U.S. projections based on Japanese car makers’ business plans. Those plans are not new–many details were announced months ago–and in large part are driven by the yen’s strength.
Indeed, most of the $9 billion in parts that Japanese automakers intend to buy over the next three years will be purchased by so-called “transplant” operations in this country.
Most hope for boosting U.S. parts sales in Japan comes from a provision under which Tokyo will deregulate its parts and inspection system.
And here’s the trophy negotiators brought home for Detroit: Japanese car dealers will receive a letter from their government confirming their right to sell foreign cars.
The Germans, with substantial investments of money and patience, sell a fair number of cars in Japan–even without those letters.
Eastman Kodak Co.’s complaint against Fuji Photo Film Co. Ltd. is different in many ways from the auto- parts case. For one, it’s a stronger case.
Dare one hope that it stays focused on the issue of free trade?
–Rochester Business Journal


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