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What Does Japanese Trade Structure Tell Us about Japanese Trade Policy?

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  • Saxonhouse, G.R.

Abstract

Some argue foreign access to Japanese markets remains tightly controlled and that if Japan is to be a member in good standing of the international economic system, Japan must do more than just adhere to the formal rules of the GATT; Japan must show by the results of its international economic transactions that foreign access to its market is not tightly controlled. As this point of view is increasingly dominating American economic diplomacy with Japan, it is particularly important that its premise be examined. First I examine Japan's growth record and trade record. To the extent that Japan's trade performance is different, I explore whether the difference can legitimately be attributed to Japanese policies. This paper finds that neither the price behavior of Japanese firms nor the pattern and volume of what Japan imports or exports suggests that Japan's trade regime is different. Some of Japan's economic institutions may be distinctive but there is little evidence they produce outcomes which distort the international economic system. What remains to be explained is the conviction of so many that Japan is more a parasite than a pillar of the international economic system. The record of economic research directly and indirectly bearing on this issue does not support such a conclusion at all.

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Bibliographic Info

Paper provided by Research Seminar in International Economics, University of Michigan in its series Working Papers with number 337.

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Length: 21 pages
Date of creation: 1993
Date of revision:
Handle: RePEc:mie:wpaper:337

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Postal: ANN ARBOR MICHIGAN 48109
Web page: http://www.fordschool.umich.edu/rsie/
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Keywords: competition ; law ; trade policy;

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References

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  1. Kravis, Irving B. & Lipsey, Robert E., 1978. "Price behavior in the light of balance of payments theories," Journal of International Economics, Elsevier, vol. 8(2), pages 193-246, May.
  2. Brown, Fred & Whalley, John, 1980. "General Equilibrium Evaluations of Tariff-Cutting Proposals in the Tokyo Round and Comparisons with More Extensive Liberalisation of World Trade," Economic Journal, Royal Economic Society, vol. 90(363), pages 838-66, December.
  3. Marston, Richard C., 1990. "Pricing to market in Japanese manufacturing," Journal of International Economics, Elsevier, vol. 29(3-4), pages 217-236, November.
  4. Helpman, Elhanan, 1987. "Imperfect competition and international trade: Evidence from fourteen industrial countries," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 62-81, March.
  5. Honma, Masayoshi & Hayami, Yujiro, 1986. "Structure of agricultural protection in industrial countries," Journal of International Economics, Elsevier, vol. 20(1-2), pages 115-129, February.
  6. Aoki, Masahiko, 1986. "Horizontal vs. Vertical Information Structure of the Firm," American Economic Review, American Economic Association, vol. 76(5), pages 971-83, December.
  7. Marcus Noland & Bela Balassa, 1988. "Japan in the World Economy," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 0412.
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