The answer to this question used to be a flat no. Until recently, most Japanese would have freely acknowledged that their government nurtured domestic industries by protecting them from potential foreign competitors. But today's massive, and politically explosive, U.S. trade deficit with Japan -- $20 billion in 1983 and $15.4 billion after only two quarters this year -- is forcing the Japanese to improve the prospects for American exporters.
Aware of their nation's heavy dependence on the American consumer market, leaders from both government and industry, including Prime Minister Yasuhiro Nakasone, argue that increasing imports of U.S. products is the best way to calm the protectionist pressures that already have led to strict "voluntaryc quotas on Japanese steel and automobile exports.
In response to U.S. pressure, for instance, the Japanese government over the past few years has eliminated tariffs on more than 110 items, reduced tariffs on another 220, and carried out a series of other market-opening steps, ranging from simplifying import certification approval to streamlining procedures at the Office of Trade Ombudsman, which hears complaints from foreign exporters.
Another major change has been the drastic transformation of the Japan External Trade Organization (JETRO). Traditionally a source of intelligence and assistance for Japanese exporters, JETRO now spends perhaps 90% of its estimated $100-million budget on promoting imports; it sponsors such activities as trade fairs for foreign producers and buying missions by Japanese importers to the United States. "Import promotion has become our prime mission," claims JETRO executive director Jun Shinmura. "We want to show the world that Japan and the Japanese consumer do not discriminate against American products."
At least one major Japanese exporter, Sony Corp., has even committed corporate resources to assisting U.S. exporters. Sony, through its own trading company and its Tokyo-based Sony Plaza Co., has sought to provide Japanese consumers with a wide selection of American consumer products, ranging from L. L. Bean shirts to Famous Amos Chocolate Chip Cookies.
Despite these positive signs, many American observers still doubt the sincerity of Japan's move to open its markets. They point out that in certain cutting-edge high-technology fields -- such as optoelectronics and optical fibers -- Japanese companies still get special protection from foreign competitors. "In areas where the Japanese still see an advantage in closing markets, they still do it," says Michael Borrus, a leading authority on Japanese trade policy and a member of the Berkeley Roundtable on the International Economy. "They open the market only after protection has already allowed their industries to become competitive on a worldwide basis. They create comparative advantage, and only then do they open their markets."
American exporters also decry the lack of progress in reducing the so-called nontariff barriers set up by sections of the Japanese bureaucracy, most notably the Health and Welfare Agency. While Prime Minister Nakasone and organizations like JETRO have been pushing imports, Health and Walfare has continued to place harsh and sometimes incomprehensible restrictions on imports -- often, according to some Japanese importers, with the collusion of domestic Japanese producers.
These nontariff barriers, enforced by obscure bureaucrats, often have more impact on small American companies than grand pronouncements by the prime minister. Four years ago, for example, National Vitamin Co., a small Hollister, Calif., manufacturer of nutritional supplements, shipped $50,000 worth of vitamins to its Japanese partner. But when the vitamins arrived in Tokyo, they suddenly were impounded for violating obscure regulations having to do with their shape and sugar content. Ultimately, the importer had to destroy the entire shipment.
In an even more bizarre case, Carme Inc., a cosmetics company based in Novato, Calif., had its line of aloe jojoba creams and lotions rejected by Health and Welfare because, among other reasons, the products contained the chemical Wickenol 171. Weeks later, the company discovered that the manufacturer of that chemical was sending bulk shipments of the same substance to Japan. "Somehow, it's OK to import the stuff, but not to use it in our product," complains Leo Nishioka, Carme's director of technical services. "It's totally baffling."
Smaller companies with limited resources often simply give up in the face of such seemingly arbitrary harassment. And those who choose to tough it out, admits veteran Tokyo-based import broker Yoshitatsu Kanada, can expect little help from their importers against the depredations of the Japanese bureaucracy. "Americans can't imagine the hassles we go through," claims Kanada, who represents both Carme and National Vitamin. "We have no power, no influence. Even if we get a policy changed, the bureaucrats will make up for it by making us suffer on the next product."
Rather than trying to move mountains of red tape, Kanada suggests, American exporters may be better off moving to accommodate Japanese regulations. Carme and National Vitamin both have modified products to meet Health and Welfare stipulations. Several other successful small company exporters -- including Famous Amos, Neutrogena, and DEP -- also create separate product batches to meet Japanese requirements.
At DEP Corp.'s central factory, vice-president of manufacturing Don Matheson takes particular pains to make sure Japan-bound products contain no formaldehyde -- an ingredient commonly used by American cosmetics companies but illegal in Japan. To ensure the purity of the Japanese batches, the chemical vats are repeatedly cleaned and sterilized, all ingredients are carefully checked for traces of formaldehyde, and the finished product is checked once again before being approved for shipment across the Pacific.
The process is expensive, with labor alone costing 33% more than for a product bound for Europe or the United States. But even with the door to Japan partially blocked, successful American exporters like DEP think pushing through it is worth the effort. "We've got to go to extra lengths for the Japanese. We know the officials there are very strict and, if the product is no good, the onus is on us," Matheson says. "But we are very careful. The Japanese are excellent customers for us."