[Leica] The Japanese Economy

[Marc James Small <msmall@roanoke.infi.net>]

At 09:45 AM 11/15/1999 -0800, Ken Iisaka wrote:
>Japan is not at all alone in defending its domestic market from foreign
>competition.  Name a country which has never practised xenophobic policies.
>All the whining blaming protectionist policies is merely a scapegoat.

No, Ken, you are wrong, wrong, wrong.  In the past, many countries DID
engage in trade barriers, from the UK's "Empire Free Trade" system at the
turn of the century to the US's own Hawley-Smoot Tariff.  But, as they say,
that was then, this is now.  

Since 1945, there has been a comprehensive effort to push Free Trade across
the board and around the world -- that is what this "GATT" (General
Agreement on Tariffs and Trade) that we hear about occasionally entails.
About 15 years back, the US and European nations pressured Japan to lift
almost all of its remaining tariffs, and we all anticipated a new day of
open trade with Japan.

It didn't happen.  The tariffs got lifted but, immediately, regulations
were slammed into place making it all but impossible for MOST foreign
companies to compete in MOST Japanese markets.  ("Health" regulations which
only affect imported, and not domestic, agricultural products effectively
protect the Japanese farmer, for instance, while stiffer regulations on
most consumer goods and automobiles -- stiffer, that is, on imported goods
- -- shield these markets from true competition.  The end result is that
Japan remains the last bastion of an insular economy.  

Leica is not a fair example:  it is insignificant in dollar values, and
involves a market where, for the most part, Japanese companies have refused
to play.  (Though, Japanese high-end optics are superb -- and are so
expensive that they are not generally imported into the US, as they cost
more than Zeiss.)

However, the current system will almost certainly not change, as too many
US retailers have gotten rich off the sale of Japanese goods in the US
market, and these guys are politically potent.  The last thing they want is
the one thing necessary for a healthy world economy, a trade embargo,
complete and across the board, with Japan until the Japanese markets are
truly opened.

It IS a mighty complex issue, and there are many with slightly different
spins on aspects of the problem.

Sources?  Virtually any edition of the WSJ.  Frequent in-depth Sunday
articles in the WASHINGTON POST and NEW YORK TIMES.  A lot of
backing-and-forthing in THE ECONOMIST.

Marc

msmall@roanoke.infi.net  FAX:  +540/343-7315
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