Trade Friction with Japan and the American Policy Response

In Toyko recently I called upon an official of the Ministry of International Trade and Industry (MITI) to discuss trade frictions between the United States and Japan. On the way to my appointment I passed by Hibiya Park in the center of the city. About 10,000 people were gathered in a peaceful demonstration against any lifting of Japan’s quotas on imports of agricultural products. Inside the MIT! building I asked the official whether the quotas on beef and oranges would be abolished soon. He told me they would eventually be liberalized or abolished to please the United States, but that political pressures were forcing the government to proceed very slowly.

The situation seems unique. In an age when the policy of retaliatory protectionism is being officially embraced in countries around the world and the free trade ideal is under severe intellectual and political attack, Japan is moving to decrease protectionist barriers and to open its markets to foreign imports. Several questions naturally arise from this state of affairs: Why has Japan adopted this trade-liberalization stance? What measures are being adopted? Will the new policy really succeed in increasing access to Japanese markets for goods, sources) and investments from the United States and other countries? Finally, what larger lessons are there to be learned from our trade frictions with Japan?