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Waiting for Japan to Repay US for Economic Favors

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Thursday, 21 Apr 2011 09:42 AM Current | Bio | Archive

The cost of World War II to Japan was devastating. Millions of Japanese had died, nearly every city was destroyed and the economy was in ruins. Post-war inflation was out of control, devaluing the yen to almost nothing. Unemployment was sky-high and there were shortages of everything.

Who came to the rescue? America.

Under the auspices of the Supreme Commander of the Allied Powers (SCAP), even after more than 400,000 U.S. servicemen and women were killed in a war started by Japan, the United States poured in billions of dollars to rebuild a nation that could not care for itself.

Now as a result of the horrific tsunami that has impacted almost everything including manufacturing and supply chains while delivering a body blow to the economy, once again the U.S. is seeking to help Japan recover.

Secretary of State Hillary Clinton recently met with Japanese officials to promise U.S. economic aid and stated: “We are very confident that Japan will recover and that it will be a very strong economic and global player for years and decades to come.”

While this is not a good time to kick a country when it’s down, the Japanese economy was on the ropes before the tsunami. It had lost its ranking as the world’s second-largest economy to China, and is continuing its slide. The yen is in trouble and its global manufacturing leadership is no longer a guarantee. And the U.S., beset by our economic crisis, is promising aid.

I don’t begrudge helping Japan’s economy, especially since Japan is the United States' fourth-largest export market. But it is hard to ignore the U.S. merchandise trade deficit with Japan, which was $44.8 billion in 2009 and accounted for 9 percent of our overall deficit.

U.S. exports to Japan in 2009 were $51.2 billion, down 21.4 percent ($14.0 billion) from 2008, and down 4.3 percent from 1994. U.S. exports to Japan accounted for 4.8 percent of overall U.S. exports in 2009, down from 10.4 percent in 1994. Our trade relations are going backwards despite years of broken promises of opening up their market to U.S. exports and allowing American exporters the same access to Japan as Japanese exporters have to the American market.

Isn’t it about time that in return for helping other countries, they agree to help us?

We helped get Japan back on its feet and erase forever the snickering that always accompanied a product tag reading “Made in Japan” for its inferior quality. Yes, their quality has improved greatly, but so has the quality of U.S. goods.

So why haven’t the Japanese imported more of our goods?

It may surprise you to know that as a result of the North American Free Trade Agreement (NAFTA), Mexico buys more U.S. goods than Japan and China combined.

After the aid we have given to Japan, they continue to put up trade barriers that make U.S. goods more expensive and unavailable while their goods come into the U.S. essentially duty free.

According to the Ministry of Foreign Affairs of Japan website, “Japan cannot secure the advantages of FTAs (Free Trade Agreements) without enduring some pain arising from the opening of its markets, but this should be regarded as a process that is necessary for raising the level of Japan's industrial structures. Unavoidable issues will emerge concerning various areas of regulatory control, including movement of natural persons, as well as the opening of markets and the implementation of structural reforms in the agricultural sector.”

Some pain? How about our pain? When U.S. exports rise, U.S. jobs are created and the U.S. economy improves. Having insuperable barriers erected against our exporters by nations for which we have invested so much blood and treasure is simply unacceptable.

At least the U.S. and Japan are trying to come to some compromise with the November 2010 launch of the U.S.-Japan Economic Harmonization Initiative (EHI). This aims to contribute to our countries’ economic growth by promoting cooperation to harmonize approaches that facilitate trade, address business climate and individual issues, and advance coordination on regional issues of common interest.

However this may be too little, too late. Both governments must immediately fast track a U.S.-Japan Free Trade Agreement that tears down the structural barriers to U.S. exports and provides us the same access to Japan as we have to Mexico and other free trade partners.

American exports would boom creating 300,000 jobs and our trade deficit with Japan of nearly 50 years would be history. For the first time since World War II, we would have a relation of mutual benefit and respect.

Maybe when Hillary Clinton talks to Japanese officials she might remind them that this is the second time we have stepped up to help their economy and maybe for once, they can try to help ours.

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NealAsbury
The cost of World War II to Japan was devastating. Millions of Japanese had died, nearly every city was destroyed and the economy was in ruins. Post-war inflation was out of control, devaluing the yen to almost nothing. Unemployment was sky-high and there were shortages of...
neal,asbury,us,japan,economy
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2011-42-21
Thursday, 21 Apr 2011 09:42 AM
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