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NO. 18 -- May 9, 1997

 

Feature Article

TRUCKING IN JAPAN: THE INTERNATIONAL DIMENSION by Douglas Ostrom

Trucking looms far larger in the domestic economies of industrialized nations than it does in international trade talks. In Japan's case, this neglect has been a consequence of the relatively limited niches that foreign firms typically hope to fill. The small role of foreign competitors gives a misleading indication of the trucking industry's importance to international commerce, however. Trucking obviously is critical to moving goods from harbors and airports to domestic customers and providing the first leg in the movement of exports to overseas customers. If the industry performs that function well, international trade grows. Conversely, to the extent that it becomes more efficient at moving goods within the country, both imports and exports may be smaller than otherwise.

Most experts believe that the costs of trucking services in Japan are high by international standards. A definitive statement is difficult, however, because the structure of trucking services differs by country. Compared to the United States, Japanese trucking is characterized by relatively small vehicles transporting goods short distances. At this extreme end of the spectrum from an American perspective, cost comparisons obviously do not favor the United States.

Partly because of the perception that high trucking costs hinder economic performance, Japan has moved to deregulate its industry during the past 10 years. The impact of that effort is less than obvious, however, in part because available evidence suggests that trucking regulation had relatively little effect prior to the reforms. To the extent that Japanese trucking costs are high, the causes appear rooted to a significant degree in other economic policies and in regulations, such as those resulting from the Large Retail Store Law, that affect trucking only indirectly.

In the last four years or so American trade negotiators have focused increased attention on Japanese trucking, primarily to win better market access for U.S. firms attempting to provide a limited range of services in Japan. Tokyo has been at least moderately responsive to Washington's suggestions. Nonetheless, both sides appear oblivious to the possibility that significant deregulation in other industries would affect trucking in Japan. That, in turn, would have important effects on the Japanese economy as well as on international trade in goods.

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Weekly Review

Consumption Tax Increase Unsettles Japan's Economy by Douglas Ostrom

The April 1 increase in the consumption tax to 5 percent from 3 percent is sweeping across Japan's economy. Observers, however, are hard-pressed to say whether the tide of economic recovery is coming or going out.

 

Presidential Commission Completes Review of Asia Trade Policy by Christopher B. Johnstone

After a year of deliberations, a White House-appointed commission presened findings andpolicy recommendations April 30 for bolstering American trade and investment ties with the Asia-Pacific region. While it contains a handful of novel recommendations, the ultimate impact of the commission's efforts is unclear.

 

WTO Financial Liberalization Talks Edge Forward by Jon Choy

Multilateral discussions aimed at extending the World Trade Organization's aegis to financial services recently received new impetus from Secretary of the Treasury Robert Rubin. The pressure now is on Tokyo and European capitals to encourage reluctant governments to make bolder liberalization offers.

 

LDP-Shinshinto Tie-Up Remains Uncertain by Barbara Wanner

The political rumor mill in Tokyo has been in high gear since the April 3 agreement between the ruling Liberal Democratic Party and the largest opposition party, Shinshinto, to cooperate in passing controverisal legislation. Pundits viewed the surprise deal as a precursor to a formal union between the two right-leaning parties.

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