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Japan's New Destiny, Part 2
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10281 |
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CURRENT ISSUES
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12 / 1993 |
2,760 Words |
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Dean Baker is an economist for the Economic Policy Institute. |
This is part 2 of a forum on how Japan is adjusting to new trends like consumerism and multiparty democracy. Forum participants are Arthur J. Alexander, president of the Japan Economic Institute of America; Michael J. Green, assistant professor of Asian studies at the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University; and Richard D. Fisher, Jr., policy analyst at the Heritage Foundation. Part 1 appeared in the November issue.
THE WORLD & I: Looking over the next decade, is there a possibility for American businessmen to do business in Japan?
Michael J. Green: I admit that there has to be a certain amount of affirmative action on the Japanese side. There's a kind of cost protection involved in doing business in Japan. Mercedes-Benz, for example, spent more on its distribution system in Tokyo than it spends on a manufacturing plant in Germany. Doing business in Japan is very expensive, and the Japanese government--I think this should be part of our bilateral agenda--has a responsibility to ease investment. I think that's more important in many ways than export barriers.
Another question is how much do we want to rely on exchange-rate realignments to adjust the trade balance. The more the yen appreciates, the more expensive it is to create a presence in Tokyo. So investment is an issue that I think is too much ignored as people focus on the trade figures.
Richard D. Fisher, Jr.: By all means we have to be honest and forthright and consistent with Tokyo. They in turn must lower barriers. It's simply long past due that not just Americans but everyone else have the same opportunities in their markets as they have in ours and the rest of the world.
The question is, how do we make that happen? If we focus on Japan with a big stick--and I regard managed trade as a very dangerous big stick--that will backfire. Managed trade is not just viewed as a threat in Japan, but throughout Asia. Today the Japanese are very effectively organizing Asian opposition to this policy.
I'm much more encouraged by the power of market forces to convince not just Japanese but other Asians of the necessity to lower their trade barriers to attract investments and thus expand their ability to produce and export.
W&I: We've talked about the economic
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