Fate of Japan’s politicians woven into web of trade curbs

Nothing better illustrates the worst of Japanese trade policy than a tale of two cherries.

One is grown in the United States, where, after a laborious series of tests, producers persuaded Japanese authorities that they could fumigate the fruit at 10 degrees Celsius instead of 17 degrees and get rid of the bugs just as well.

The lower temperature kept the cherries fresher, and producers in British Columbia, who only managed to get into the Japanese market in 1982, decided to follow suit.

Not so fast, said the Japanese Government. Before Japanese consumers could be exposed to such potential health dangers, Canada would have to prove that the process was safe when carried out on Canadian soil with Canadian cherries.

The federal Department of Agriculture is now conducting a year-long program at a B.C. laboratory, infesting trees with moths, waiting for the fruit to ripen and then fumigating it to prove that the bugs still die. If all goes well, the results will be sent to the Japanese Government by Christmas and then on to public hearings in Japan.

All this will allow the process to be used only on the specific varieties of fruit tested, and only on those grown in British Columbia. If Ontario growers want to sell to Japan, they will have to repeat the tests.

It is measures like this that have politicians in other countries taking pot shots at a rich market that seems to shake off the rain of imports better than a well-fed mallard.

Some of the shots, though, are coming too close for comfort, and Japan is scrambling to find ways of deflecting the criticism. But Prime Minister Yasuhiro Nakasone’s unprecedented television appeal to consumers to buy more imports – and the market-opening package that went with it – largely ignored products that might cause political trouble at home.

Canadian politicians use quotas and other restraints to protect the jobs and votes of textile workers in Quebec and auto workers in Ontario. Japanese politicians do the same thing. They just do it better.

Japanese farmers are perhaps the best protected in the world, because rural ridings are vastly over-represented in the Diet and their support has been crucial to the ruling Liberal Democratic Party, whose electoral record rivals that of the Ontario Conservatives.

Asking Mr. Nakasone to abandon his farmers is akin to expecting Prime Minister Brian Mulroney to drop all quotas on textiles, clothing and footwear and declare Canada unilingual English to boot. Fences for the farmers will not be torn down until urban consumers get fed up with $60 melons.

The degree of protection depends on the product. Japanese fleets catch plenty of fish, and imports are subject to quotas. Farmers do not grow any wheat and Canadian exports do nicely.

In forest products, Japan buys pulp, but uses it to make most of its own paper. A Canadian lumber marketing program to promote North American building methods is paying off, if only because they help to bring Japanese housing costs down from almost impossible to merely astronomical.

But plywood producers face a brick wall around their 700 Japanese competitors. First, there is a 15 per cent import duty, enough on its own to price most Canadian production out of the market.

Then, imports must get the Japan Agricultural Standards stamp of approval, and the inspections and laboratory testing cannot be done until the plywood arrives in Japan. If the samples tested do not measure up, the entire shipment is turned away. ”t’s not the time, it’s just the hassle. It’s typical of many procedures in Japan that they’re masters at,” said Kenneth McKeen, director of lumber and shingles at the Council of Forest Industries in Vancouver.

Manufactured products face different barriers. In most cases, import duties are low and no quotas exist, but many other factors make it expensive and time-consuming to win Japanese customers.

In the auto parts sector, for instance, the Canadian industry has virtually given up hope of making large-scale deals with Japanese auto makers, said Patrick Lavelle, president of the Automotive Parts Manufacturers Association of Canada.

The distance makes it expensive to ship products and difficult to meet the needs of the Japanese just-in-time inventory system. Long-standing relationships with existing suppliers pose a major obstacle to newcomers. Winning long-term business usually means accepting low-volume contracts at first and these cannot be profitable in themselves.

Canadian companies must also cater to the Japanese obsession with quality, and that leads to the bottom line: Stringent quality control, long distances, a weak yen and low volumes make it all but impossible to price competitively.

Canadian telecommunications companies, which are world leaders, have higher hopes, and state- owned Nippon Telegraph and Telephone Public Corp.

is gradually being sold to the private sector.

Northern Telecom Ltd. of Mississauga, Ont., has been able to land some business and is looking for more. But it can afford to spend $6- million a year while cultivating the market. Also, because its Japanese operations are a subsidiary of its U.S. unit, it gets diplomatic backing from both the United States and Canada.

Smaller companies are having a tougher time, and Canadian trade officials believe Japan is still protecting its own. For instance, Japan is not planning to add digital switching to the public telephone network until 1990, by which time Japanese products should be able to match what Canada could supply now.

One official summed up Japanese import policy this way: ”f they need it, it gets in. If they don’t, it doesn’t.”




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