Automobile Trade Dispute Between U.S. & Japan

From the time that Japanese imported cars first became highly visible on American roads, the inroads of the Japanese have been accompanied by an increasingly heated debate over whether the success of the Japanese imports was based on genuine competitive advantages, or at least in part by unfair trade practices on the part of the Japanese. On the one hand, the Japanese automobile makers were widely accused of "dumping" their products on the American market--that is, pricing their products below their real production cost as part of a strategy to absorb losses in the short run in order to capture a dominant market share in the long run. On the other hand, Japan was accused of using a variety of restrictive trade practices to eliminate foreign competition in their own domestic market, even for those models, such as larger luxury cars, for which the Japanese industry offered no real counterpart.

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70s and much of the 1980s, has been substantially if not entirely closed. With the "Saturn," General Motors launched an entirely new division, for the first time in decades, declaring in effect its readiness to meet Japanese automobile makers head-on (Sherman, 1994). Yet the trade tensions persist. Although the American domestic auto industry is no longer threatened with collapse, the Japanese are still widely accused of unfair trade practices, an accusation which could only seem to be given more point by the manner in which the import quotas were circumvented by flooding the American domestic market with small trucks--in American automakers' eyes, the equivalent of using a legal technicality. The inability of American automobile makers to gain more than an insignificant foothold in the Japanese domestic market also continues to be a point of controversy. The Japanese argue, as they have since the dispute began, that American carmakers have failed to make a serious attempt to adapt their product to the Japanese domestic market, either by providing an appropriate vehicle mix or--more fundamentally, by failing to produce cars with right-hand steering. In Japan, as in Great Britain, traffic moves on the left, making a right-han
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Approximate Word count = 3305
Approximate Pages = 13 (250 words per page)

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