JAPAN'S response to internal and international pressure to deregulate its economy and remove both tariff and non-tariff barriers has once again fallen far short of what is required. Its latest five-year deregulation plan, ostensibly aimed at cutting government regulation of 1,091 items in 11 vital areas of the economy, is so hedged about with 'ifs and buts' that in some sectors it amounts to barely more than tokenism. How else should foreign companies react but with cynicism to a proposal to review by fiscal 1999 the large-scale retail store law, which has been criticised as an obstruction to foreign retailers wanting to bring their goods to Japan? How else should they view a plan which promises a decision within three years on whether to allow Western-style stockholding companies in the Japanese market? Too many of the proposals are vague, non-committal and depend on additional studies and further reviews.
Despite Prime Minister Tomiichi Murayama's promise to make a real effort to open markets and put the measure into practice, and the encouraging range of sectors - from telecommunications to distribution and housing - affected by the plan, businessmen and governments can be forgiven for finding the package underwhelming. Japan has made precisely the right noises many times in the past to pacify angry Americans and Europeans and given the occasional sop to those of its own businessmen with something to gain from deregulation. But a real liberalisation of the economy has yet to emerge.
Japanese farmers, car parts manufacturers, retailers and others who for years have enjoyed high prices and protection from imports make the same pleas for special treatment that their counterparts in Europe, the US and much of the developing world always make when their own barriers are threatened. Jobs and traditional ways of life are at stake, food security is at risk - and votes for incumbent politicians may be lost. But other countries, many of them a good deal poorer and less able to cushion their populations against the effects of imports than Japan, have overruled their protectionist lobbies and liberalised further, faster than Japan. They have reaped real economic benefits as a result.
If this package is to be taken more seriously than previous promises, Japan should not confine itself to promising studies three and four years down the road, but commit itself to a set timetable for each deregulatory move and be prepared to subject that timetable to international scrutiny and policing under the auspices of the World Trade Organisation. A special international monitoring committee should be set up specifically to judge Japan's progress. Its brief should cover not only this package but also the thousands of other regulations and knots of red tape which must be hacked through if the country is to play its full part in the international trading system as an importer as well as an exporter.
