The US-Japan car dispute: a monumental mistake

The author examines the recent trade dispute between the United States and Japan concerning the automobile industry as an illustration of the shortcomings of US trade policy under the Clinton administration, in respect of two main issues: aggressive unilateralism, and demands for managed trade in the form of ‘voluntary import expansions’. He argues both the US complaints against Japan were ill-founded and that the methods chosen by the US administration, and in particular by the US Trade Representative Mickey Kantor, to pursue them were politically misconceived, inconsistent with the United States’ declared allegiance to the multilateral trading system, and damaging both to that system and to US-Japan trade relations. The failure of the US strategy, he argues, is unsurprising and welcome, and US-Japan trade relations should now be normalized.⋆