Tough Traders

3 minute read

Japan’s exports keep booming

Industrialized nations have complained loudly about the damaging effects of the deluge of Japanese exports, but the carping so far has not done much good. Indeed, last week private research institutes in Tokyo predicted that after two years of deficits, Japan will have a substantial surplus in foreign trade and services by the end of the fiscal year.

Though the country has flooded the world with everything from Toyotas to tummy tubes, Japanese dependence on foreign oil has pushed its balance of trade into the red. Japan must import 99.8% of its oil. Yet despite a $54 billion oil bill, last year’s $7 billion current-account deficit could this year be a surplus of as high as $6.5 billion.

One reason for the stunning turnaround has been the booming demand for Japanese products. During the first three months of this year, Japan’s exports of machinery jumped 43%, automobiles 41.5%, and home appliances were up 38.5%. Videotape recorders, which are not yet manufactured anywhere else, were up in sales 118% in the first four months.

The jump in exports apparently results from an increased demand for the products, not from any major efforts to boost foreign sales.

Japan’s trade success is also partially a result of the easing in world oil prices.

The country is now paying less for oil than it previously expected. More important, concentrated efforts at conserving energy will reduce consumption by an estimated 2.7% this year over last, according to one private forecast.

Even though Japan will cut auto exports to the U.S. by 7.7%, the trade gap between the two countries continues to mount alarmingly. The Department of Commerce estimates that the U.S. deficit in trade with Japan could reach a record $14 billion by the end of the year, an increase of 40% over 1980.

Some American officials say that this deficit is partially caused by restrictive import barriers that make it hard to sell products other than wheat, rice, aluminum and other natural resources. Japanese officials, however, maintain that they no longer discourage foreign companies.

They say that U.S. firms have not been selling aggressively in their market.

Not surprisingly, protests against Japan’s trade practices are again growing.

Senate Republican John Danforth of Missouri has sent U.S. Trade Representative William Brock a letter warning that the auto issue was not an “isolated crisis.”

Danforth’s letter, which was cosigned by eleven other members of the Senate Finance Committee, hinted that Congress might again consider putting import quotas on leading Japanese exports.

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