Free trade champion? Australian views of the US trade crusade against Japan

Abstract

US trade policymakers claim that single-handed US efforts to increase Japanese imports of foreign goods and services are benefiting exporters worldwide. Many observers disagree, arguing instead that US unilateralism is severely undermining the multilateral world trading system. Opinion is divided: while officials in the European Union and Japan have been openly critical of aggressive US trade policies, smaller countries such as Australia seem to be taking a more nuanced view of the ‘free trade champion’. This paper explores Australian views of US market-opening measures aimed at Japan, drawing on a series of interviews with Australian government officials and business leaders. It considers how US policies have impacted on Australia’s export opportunities in Japan and what policy tools are available to Australia for influencing the outcomes of US–Japan negotiations. Two opposing views are reported: first, that Australia should counter perceived US moves towards bilaterally managed trade and second that Australia should join ith the US in its attempts to open Japanese markets. 'We are asking Japan to open its markets. That will increase choice, quality, and competition or Japanese consumers of autos and auto parts. It will reduce prices for Japanese consumers of autos and auto parts. These steps will obviously be helpful to Japan’s trading partners who are trying to sell into those markets, and will obviously be helpful, we believe, to bring down the Japanese current account surplus which has been a persistent problem for the world economy.’ Dr Laura D’Andrea Tyson Chair, Council of Economic Advisors May 10, 1995 ‘The United States cannot be the only engine of global growth or the sole buyer of goods to absorb the tremendous productive capacity of Asia. While we expect our trade deficit to increase as a consequence of the lower currency values in Southeast Asia and Korea, it is neither fair nor politically acceptable for the US to be the only country buying their exports. So we look to Japan, the world’s second largest economy, to play a central role in resolving this crisis. Japan’s policies must ensure not only effective market access for US goods and services, but also for the goods and services of the Asia-Pacific region.’ Ambassador Charlene Barshevsky US Trade Representative April 14, 1998