THE PRESIDENT OF A FOREIGN steamship line made a startling proposal (considering the source) to one of our editors the other day.
He was talking about the way Japanese products have come to dominate U.S. markets, at a time when Japan's import rules are so labyrinth and restrictive that U.S. products get very little chance to compete in Japanese markets. As a result, he said, a vast array of Japanese products ranging from cameras to video cassette recorders to automobiles have become commonplace in the United States. Yet U.S. goods are largely shut out of the Japanese marketplace.The solution, he suggested, would be to impose the same requirements on a foreign importer's products that the importer's country imposes on U.S. products. In other words, he said, if the Japanese require that each U.S. car imported into Japan be individually inspected - a process that can add $1,000 or more to the price - then we should insist that each Japanese car be individually inspected. Such regulations would not be designed to be retaliatory - they would simply be identical to those already in place in countries that rack up trade surpluses with the United States year after year.
Had that plan been suggested by a dyed-in-the-wool protectionist, thundering about the need to save the jobs of people in his home district, we might have dismissed it as out of hand. But here was a chief executive who had devoted a long and distinguished career to the shipping business, speaking openly about the need to force Japan to grant U.S. exporters greater access to its markets.
Some might argue that such non-tariff barriers, by any other name, are still contrary to the principles of free trade. Others, however, might suggest - as he did - that translated regulations wouldn't necessarily limit trade, and might in fact promote trade. The requirement of individual inspection of automobiles, for example, would be set up to dissolve immediately when Japan eliminated its own rule for inspection of U.S. autos exported to Japan.
A foreign government would be somewhat hard-pressed to attack regulations that were nothing more or less than translations of its own policy. Such a plan would not arbitrarily limit growth in trade to fixed percentages. Japan could quickly eliminate a translation rule it didn't like by eliminating the same rule for U.S. imports.
We recognize that it might be difficult to make translated trade regulations practical. Fights over even small details in trade bills turn into major battles in Congress. It seems unlikely the federal government could decide any more simply on which foreign trade restrictions to translate and impose. In the current context of trade legislation, it alsoseems unlikely that there would be any groundswell of support for a trade czar free to carry out surgical strikes against unreasonable foreign restrictions.
Yet the idea of action to seek greater U.S. trade in the Far East cannot be summarily cast aside. We believe it might be wise to consider translated regulations as one of a range of options available when urging trading partners to be more open to U.S. exports.
There is a precedent for this suggestion. Back at the turn of century, the Conservative Party in Britain sought to protect the country's threatened economic pre-eminence behind tariff barriers. Winston Churchill became so incensed that he left the Conservative party and became the outspoken champion of the Tory free traders. Seeking a compromise, the great British statesman Arthur J. Balfour, famed for his Balfour Declaration pledging British support for a Jewish home in Palestine, suggested that Britain impose the same duties and regulations on imports of those countries that imposed them on the United Kingdom. Thanks largely to Sir Winston's barbed tongue, Mr. Balfour's suggestion went nowhere. And we are all aware what happened to the United Kingdom's economic pre-eminence.