Japan steps up efforts to open its market to imports

Japan steps up efforts to open its market to imports

By Vincent Lingga

JAKARTA (JP): No matter who replaces Morihiro Hosokawa as prime
minister, the Japanese government will step up its economic reform
measures to open its market wider to imports, says Koichiro Matsuura, a
former deputy minister of foreign affairs.

Matsuura told The Jakarta Post here on Friday that in addition to the
15.2 trillion yen (US$145 billion) economic pump-priming program
announced in February and the market-opening package issued last month,
another major package of economic reform measures is in the pipeline.

"All this will significantly reduce our current account surplus," he
said in recounting what his government has done and will do to resolve
its trade dispute with the United States.

He cautioned, however, that the Japanese government could not be
asked to do things beyond its reach.

Japan's big trade surplus has been "a thorn in the flesh" within its
relations with the U.S. since the second half of the 1980s. Despite the
sharp appreciation of the yen from around 234 to the U.S. dollar in
August 1985, to around 104 today, Japan's trade surplus with the U.S.
has tended to increase. It rose from $17 billion in 1982 to $56.8
billion in 1987, went down to $41 billion in 1990, but surged again to
$49 billion in 1992 and to more than $50 billion in 1993.

"We will continue to pursue measures to stimulate our domestic market
demand which will in turn boost imports, but we cannot do things beyond
our ability to control," the senior diplomat said.

Matsuura, who visited here for a few days last week, talked to the
Post about issues surrounding the Japan-U.S.trade impasse and the
efforts his government had made and will implement to resolve the trade
friction.

The following are additional excerpts from the interview.

Matsuura said: I am confident that the measures adopted so far and
those which will yet be implemented after June will significantly reduce
Japan's current account surplus within the medium term.

At the end of March, for example, soon after the launching of the
15.2 trillion yen domestic economic stimulus, Japan unveiled a package
of market-opening initiatives that included:

o Additional public works spending on top of a 10-year government
goal of 430 trillion yen ($4.1 trillion) between 1991 and 2000.

o Stricter enforcement of anti-trust laws and strengthening of the
Fair Trade Commission.

o Ways to prevent bid-rigging, including a guideline on public works
contracts.

o Improvement of government procurement procedures and incentive
measures for imports.

Yet, more massive, significant reform measures will be adopted before
June to promote sustainable domestic demand-led economic growth.Included
in the coming package:

o Income-tax reduction which will spur domestic consumption

o Further deregulation measures to improve market access, ensuring
international consistency with standards and approval systems and
simplified procedures related to : Real estate and land, information and
telecommunications equipment, distribution and flow of goods, licenses,
approvals and inspection standards, financial, securities and insurance
markets.

o Further improving the transparency, fairness and competition for
government procurements.

I admit there is a pervasive pattern of what overseas businessmen
call collusive corporate practices between Japanese companies in favor
of domestic products that make it extremely difficult to enter the
Japanese market.

But not all those exclusionary business deals, which in Japan are
called keiretsu, can be classified as unfair. Many are acceptable but
some are unacceptable. We will deal with the unacceptable practices but
we can only persuade or try to solicit cooperation of companies to
change their keiretsu practices in order to increase imports.

For example, we cannot force but only persuade Japanese automobile
firms to procure more parts or components from the U.S. That lies
entirely within the power of the companies to decide.

This case once again shows the limits of what the Japanese government
can and cannot do. That also is the main reason why Japan has
persistently rejected the U.S. demand for numerical targets for its
market-opening measures. Not only because such a scheme runs against the
market forces but it is also extremely difficult to set objective
criteria to measure such targets.

With regard to possible resumption of trade talks with the U.S., I
don't think the ball is now only in our hands. Instead, I reckon, we
play not only one but several balls. We have some and the U.S. has balls
of their own to play to reach a mutually beneficial agreement.

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