Japan in ASEAN: Potential trade frictions

Abstract

Over last few years, especially after second oil-shock in 1979-81, trade frictions between and Western countries, that is United States and European Com munity, have escalated. Relatively higher quality and lower-priced Japanese manufac tured goods have overwhelmed not only markets in ASEAN but also those in Europe and North America. Japan's trade with USA and EC has been in Japan's favour. In 1983, Japan's trade surpluses with USA and EC reached US$21 billion and US$10.1 billion respectively (Look Japan, no. 339, [June 1984]). Both USA and EC have been urging to reduce its exports and increase im ports from them, in order to reduce Japan's trade surpluses. Despite numerous efforts by parties concerned, trade relations between and its foreign partners do not seem to have improved significantly. Thus, at a minis terial conference on'27 April 1984, Japanese Government adopted a six-point package of counter-measures in order to resolve conten tious economic problems with developed countries.1 It is estimated, however, that these measures will reduce Japan's surpluses by only US$500-600 million at most.2 Trade fric tions between and Western countries are unlikely to be resolved in near future. Trade frictions between and Western countries have been sufficiently discussed and researched.3 Much attention has been paid to efforts to rectify their distorted trade relation ship, and this has been reported frequently in daily newspapers. The potential and/or actual trade frictions between and ASEAN, on other hand, have been overlooked, despite protestations made by governments and among business circles in this region against closed nature of Japanese market. For example, it was reported that Philippine President Ferdi nand E. Marcos had asked Japanese Prime Minister Suzuki Zenko to reduce tariffs on bananas when latter visited Philippines in January 1981 (Daily Yomiuri, 17 May 1982).4 Marcos in his keynote speech to thirteenth meeting of ASEAN Economic Ministers in Manila in 1982 again voiced the collective concern of Philippines, Malaysia, Singapore, Thailand, and Indonesia over Japan's heavy tariff policies and non-tariff bar riers against products from their region (ASEAN) (Japan Times, 21 May 1982). The Malaysian Prime Minister Datuk Seri Dr Mahathir Mohamad, when he visited in January 1983, also called on Japan to open its markets wider to products from Malaysia