US MANAGES free trade and globalization pt. 1

Chris Beggy news at kippona.com
Wed Feb 6 10:58:46 PST 2002


"Charles Jannuzi" <jannuzi at edu00.f-edu.fukui-u.ac.jp> writes:


> This chronology does not explain why Japan does not produce OSes or
> processors for pcs. Basically, it worked like this. Back in the mid 80s, the
> Japanese had to agree to a fixed share of the US market in commodity chips.

You are describing a bi-lateral trade relationship, not globalization. I don't dispute that US based firms use whatever means they can to subvert free trade, I just think the style for the past 11 years has been to use multilateral (WTO, IMF) and broadly geographic (NAFTA, EU) legal structures. The US-Japan relationship doesn't tell us much about that.

After years of winning bilateral negotiations with the US, the Bank for International Settlements, a multilateral organ, finally squeezed Japan in the early 90's until the pips squeaked. In exchange for participation in the Eurodollar and Euroyen bond market (multilateral creations) the BIS required Japanese banks to increase their reserves to come up to world standards. As they did this, they deleveraged the financial system, and it hasn't been the same since.

The telltale of globalization was when US firms went from Japan bashing to Japan passing. Narita airport ceased to be a destination and became a place for business travellers to catch connecting flights to Guangdong, Hong Kong, Seoul, Penang, Singapore, and Taipei.

Chris



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