Cracks in the Alliance by Anthony DiFilippo

Author:Anthony DiFilippo [DiFilippo, Anthony]
Language: eng
Format: epub
Tags: Social Science, General, Sociology
ISBN: 9780429872709
Google: loyADwAAQBAJ
Publisher: Routledge
Published: 2018-12-17T03:44:46+00:00

Figure 4.4 Per capita U.S. manufactured exports of nonJapanese-affiliated firms to Japan, 1980-1991

Sources: Same as Figure 4.3; and STA, White Paper on S&T, 1992.

The closed market hypothesis cannot explain why the United States was the leading exporter of high technology products (OECD definition) until 1982, but subsequently fell behind Japan; nor does it explain why for years the ratio of high technology production to total manufacturing output in Japan has remained higher than that for the United States. This hypothesis furthermore cannot explain why the United States slipped behind Japan in total manufactured exports in the early 1980s. That the United States has historically been behind Japan and other industrial economies in the proportion of manufacturing output that it exports, however, does suggest something very important to our analysis: the continued insistence that Japan purchase more American-made products, which overlaps with the argument that its domestic market is relatively closed, is a political tactic that can help offset the voluminous Japanese manufactured exports to the United States.72

The fact that manufactured products exported to Japan by nonJapanese-affiliated producers in the United States have increased sharply over the years, as seen above, is compelling evidence available on the matter of the degree of openness of Japan’s domestic market. Figure 4.4 demonstrates the striking growth of real manufactured exports from the United States by nonJapanese-affiliated businesses measured on a per capita basis, suggesting the increasing consumption of American-made products by the Japanese. It is hardly likely that a closed Japanese market would yield an increase of almost 130 percent in manufactured exports (measured on a per capita basis) from the United States between 1980 to 1991.

The argument in this chapter is that, with supporting government policies, because Japan has made major strides in developing manufacturing technology and advancing S&T infrastructure, its industries have reached a level where quality-based market expansion far outweighs unfair trade practices. Japan’s position in its historical alliance with the United States, however, has meant that it be on the receiving end of political pressure. Although some external criticism is healthy and can be conducive to constructive change, Japan has been subjected to much more pressure for change than can be justified by the available evidence.

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