WASHINGTON'S official Japan-bashing season has begun. In Congress, complaints about Japan's "perfidious" trading practices are reaching the stentorian levels one hears in Washington during an election year. The complaints are not new. What is new is the 1988 Trade Act. It allows the United States to retaliate against unfair Japanese trade practices.
The Bush Administration should soon have in its hands a tentative report on Japan's compliance (or lack of compliance) with the act. If it is warranted, "retaliation" -- restrictions on Japanese imports -- could take place as early as July.
This course of action should be entertained only as a last resort, not as an opportunistic policy to arouse voters in an election year. Retaliation is an act of trade war. And a focus on Japanese trading practices should not be used as a defense mechanism to suppress hard examination of America's chronic problems of huge deficits and low personal savings. This low rate shrinks the pool of investment capital for industrial innovation and enhances U.S. dependence on foreign investment, including Japan's, to finance the deficits.
For the most part, the present version of Japan-bashing is neither helpful nor illuminating. Brandishing a protectionist stick over Japan's new government may not go very far in persuading Tokyo to modify some of its policies. Indeed, the United States has some barriers of its own to lift. According to London's Economist magazine, except for food, Japan has fewer trade barriers than the United States.
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