A History of Japan’s Government-Business Relationship by Phyllis A. Genther

Author:Phyllis A. Genther
Language: eng
Format: epub
Publisher: University of Michigan Center for Japanese Studies
Published: 2020-03-15T00:00:00+00:00

CHAPTER 6

INTERNATIONALIZATION

Introduction

Liberalization of trade and capital flows was the major factor affecting the relationship between the Japanese government and the automobile industry in the 1960s. The pressures and fears surrounding liberalization strongly influenced the way in which the government viewed its role vis-à-vis the business community. The government had to balance Japan’s need to enter fully into international trade through complete access to foreign markets with the need to ensure that Japanese industry would be competitive enough to export and not be overrun by foreign competitors.

Liberalization was necessary because Japan had to have access to the international market in order to survive and expand. By 1960, Japan’s access began to be jeopardized by export and import practices that did not comply with rules and procedures established under multilateral trade arrangements: the General Agreement on Tariffs and Trade (GATT), the International Monetary Fund (IMF), and the Organization for Economic Cooperation and Development (OECD). Japan did not yet have the ability to affect the contents of such arrangements; therefore, it had little choice but to adapt, although it did so more slowly than other nations wanted. As Japan accepted the conditions of various trade arrangements and its industry adapted to liberalized trade, interactions between government and business changed.

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