Oh, and because Japan appears headed towards another important financial crisis this year (I search for evidence): ----------------------------------------------------------------------------------------------------------- Thursday, January 11 2:43 PM SGT
US attacks Japan over trade liberalisation, auto accord
TOKYO, Jan 11 (Agence-France Press: Asia) -
US Commerce Secretary Norman Mineta on Thursday attacked Japan's reluctance to renew a 1995 auto trade accord as a signal failure of commitment to liberalising its markets.
Mineta failed during talks in Tokyo Wednesday with trade minister Takeo Hiranuma to extract a promise to extend the pact on vehicles and auto parts, which expired at the end of last year.
"I must be frank in saying that I found Japan's position at our mid-December working-level discussions very disappointing," the commerce secretary told the Japan National Press Club.
"This is a key sector in our bilateral economic relationship," he said.
"Unfortunately, this sector accounts for well over half our bilateral trade deficit, and with the auto sector slowing in the US, we do not want to see an impasse or friction in this sector.
"But that could well happen," Mineta said, while also dismissing Japan's argument that the 1995 accord was no longer relevant as globalisation changes the world auto industry.
"This issue is not a question of capital ownership of automobile companies, that is in terms of globalisation. I am aware that of the 11 Japanese automobile companies, seven of them have foreign capital investments.
"What this is all about is market access," Mineta said.
"If you look at the number of Japanese cars that are coming in to the United States, and you compare it with the number of United States cars coming in to Japan, there's just no comparison at all."
US auto parts makers found it particularly hard to penetrate Japan's heavily regulated market, Mineta added.
The auto accord was a litmus test of Japan's commitment to dragging its economy out of a decade-long slump by encouraging competition, he argued.
The US auto industry, once similarly protected, had emerged from the "dark days of the 70s and 80s" revitalised through pressure from foreign -- including Japanese -- rivals, Mineta said.
"We all know that lack of competition weakens the competitive fibre of every industry," he said, pointing to the near monopoly enjoyed by Nippon Telegraph and Telephone Corp. for strangling Internet growth in Japan.
Efforts such as the US-Japan Enhanced Initiative on Deregulation and Competition Policy, launched in 1997, were putting the framework for reform in place.
"The initiative has been a success, and it is important that further progress be made in eliminating those regulations in Japan which serve no useful purpose, but which do impede change and economic growth potential."
Japan's banking industry, which is laden with bad debts, was in sore need of restructuring, Mineta added.
"Until then, the basic economy is just not going to turn around." $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
"You my win the rat race, but you're still a rat"
- Lily Tomlin
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