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Politics

A short history of the lengthy US-Japan auto disputes

On-again, off-again trade frictions date back to the disco era

TOKYO -- U.S. President Donald Trump's stinging rebuke Monday over barriers to the Japanese auto market recalls the two decades of trade disputes between Tokyo and Washington that began in the 1970s.

The frictions started to build during President Gerald Ford's administration, which ended in January 1977. Then amid the oil crisis and rise of the dollar, U.S. vehicle imports spiked nearly 20% from 1978 to 1979. The three big American automakers were laying off workers, and Chrysler came to the brink of bankruptcy. These woes sparked talk of a Japanese threat looming over the U.S. manufacturing sector.

Senior government officials from both sides held talks in 1980, and Japan announced a set of independent corrective measures that May. Yet the American auto industry sank deeper into trouble, prompting the United Auto Workers union to file a petition that year with the U.S. International Trade Commission seeking limits on Japanese imports, invoking Section 201 of the Trade Act.

In 1981, President Ronald Reagan's administration put together a plan to rebuild the auto industry. Responding to the tough line from Washington, Tokyo implemented a voluntary export limit of 1.68 million vehicles annually through fiscal 1984. Those restrictions were renewed until 1994.

Meanwhile, Japanese automakers were busy basing production in America. Honda Motor kicked things off in 1982 with an Ohio plant, and Toyota Motor and Nissan Motor soon followed suit. In 1984, Toyota and General Motors established the Nummi plant in California. Though the joint venture was hailed as a symbol of U.S.-Japan cooperation, frictions between the trading partners remained.

The two sides launched the Structural Impediments Initiative talks in 1989. Washington complained that Japanese auto plants in the U.S. ordered too few components from American companies, reopening an issue that supposedly had been settled.

When President George H.W. Bush campaigned for re-election in 1992, he brought along the heads of GM, Ford Motor and Chrysler to Japan. Bush raised the American procurement problem during a meeting with the Japanese prime minister, Kiichi Miyazawa. The joint statement after the meeting laid out purchasing goals that Japanese car companies should strive to meet. Trump's run for the White House was not the first time that Japanese industry became caught up in election-year U.S. politics. 

The U.S. calls the thicket of safety standards, distribution arrangements and other auto industry rules and practices in Japan nontariff barriers to that market. Though U.S. motor companies underperform in Japan, their German and other European rivals enjoy strong demand for their vehicles despite competing on the same terms as the Americans. Insiders in Japan generally claim that the American automakers have not made enough effort on designs, fuel efficiency and sales networks to succeed in this market.

Robert Lighthizer, Trump's nominee for U.S. trade representative, is a trade hawk who served as a deputy in the office during the Reagan administration. During that time he was involved in the U.S.-Japanese steel talks, then later took a post as a legal adviser for a major American steel company. But Trump's pick for commerce secretary, Wilbur Ross, is friendly with Japan, having visited the country 85 times. Some in Japan hope Ross will be a voice of reason if trade frictions heat up again.

(Nikkei)

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