What It does and does not say About U.S.-Japan Auto Trade

• The NTE IS the U.S. Government’s catalogue of alleged trade barriers that the U.S. claims other nations use to limit U.S. exports. The NTE’s allegations about U.S.-Japan auto trade are being made in a climate of increasing U.S. pressure for specific Japanese purchasing commitments.
• The NTE IS part of a larger U.S. campaign. The allegations in the NTE are a follow-up to prior U.S. statements with respect to the auto trade issues since the Framework agreement was concluded--all demanding "numerical indicators" and "measures of progress," coupled with new, increased, and "enforceable" parts purchasing plans.
• The NTE is NOT an objective analysis. Many objective reviews of U.S.-Japan auto trade have concluded that Japan does not maintain trade barriers to U.S. vehicle or parts exports.
• The NTE IS a political document that is intended to be the basis for unilateral trade actions by the United States. It therefore does not attempt to state "both sides of the case," or to evaluate the legal, trade policy, or economic facts involved in trade issues.
• The NTE IS selective. It ignores the dramatic successes that U.S. vehicles and parts are having in the Japanese market. American cars are selling well in the Japanese market--they hold 28 percent of the large car segment--the only market segment the U.S. is serving.
• The NTE also dismisses the sharp increases in Japanese auto company purchases of U.S. built-parts--from $2.5 billion in 1986 to $15.5 billion in Fiscal Year 1993.
• The NTE fails to recognize that these successes are the result of purchasing decisions made on sound business principles, not on the basis of trade pressure or demands for enforceable commitments, and that they could not happen if the kind of trade barriers claimed by the U.S. existed.
• The NTE is NOT a realistic measure of the marketplace. The U.S. appears to be determined to base its trade negotiations on politics, not economic facts and analysis. No businessman in the United States or Japan would or should make decisions to spend billions of dollars for political, rather than economic reasons.
• The NTE IS a precursor to Section 301 trade actions to enforce "trade agreements" or to attack "anticompetitive practices." Since the U.S. unilaterally decides what is a violation of Section 301, the U.S. is building a "case" for retaliation if Japan will not agree to managed trade demands.
• The NTE is thus NOT a basis for sound bilateral trade relations. Japanese auto companies simply cannot undertake to agree to demands for managed trade on the basis of allegations that are not objective, not analytical, and not based on fact.