TRADE wars are anathema to politicians and businessmen alike. As with military conflicts, they tend to hurt both sides and often produce solutions inferior to those that might have been achieved by peaceful means. Yet there are occasions when threats must be followed by action, not by more threats: a time when it is better to fight than to retreat.
Such is the situation in trade negotiations between the United States and Japan. A decade of sabre-rattling by Washington and prevarication by Tokyo has produced only limited results. Now, according to The New York Times, US Trade Representative Mickey Kantor is preparing to roll out the big guns of 100 per cent tariffs on motor-industry imports.
One problem the Japanese Government faces in persuading auto-makers to use more foreign parts - a key US demand - is that Japanese industry works in a cartel-like manner. Japanese companies prefer to buy from Japanese suppliers: partly for convenience, partly because they believe Japanese products are best and partly because of the need for co-operation in an economy built on harmony at home, aggression overseas.
Japanese trade practices are not all aimed primarily at unfairly excluding foreign competition. Some, such as those surrounding retailing and food, serve different purposes. Regulations on retailing are intended to prevent small neighbourhood stores being swept away by supermarket chains, while food-import regulations keep Japan self-sufficient in rice and help to preserve a rural way of life treasured by many Japanese. However, such regulations have, over the years, hindered imports and harmed Japanese consumers while serving to fill the political coffers.
Free trade is not merely a fashionable concept. It should benefit consumers in Japan as well as in the US. But Trade Minister Ryutaro Hashimoto is an old-style politician: a graduate of the salons and smoke-filled rooms where money is raised and deals are cut. He is not a man to give ground without reason and the US must demonstrate it is serious about sanctions.
The current strength of the yen highlights the financial folly of Japanese auto-makers buying Japanese-made parts but such a purchasing pattern did not make sense before the dollar's decline. Hard work and extraordinary ingenuity have enabled the Japanese to break into markets around the globe. Such talents should now be turned to opening the domestic market.