Conclusions

I hope I have clearly demonstrated in this book that when Japan’s trade relations are considered in their only appropriate context, the global-cum-historical context, there is no single or simple explanation for the trade frictions between Japan and the rest of the world, particularly with the EC and the USA. A simple explanation is unwarranted since the USA is responsible for the major part of its trade deficit with Japan (and with the outside world). Of course, Japan may appear to be accountable for about two-thirds of its trade surplus with the rest of the world, i.e. Japan may be held responsible for that part of the surplus caused by an under-valued yen prior to the joint action by G5 (or G7 after the Tokyo Summit in May 1986). However, a significant portion of this sum is simply a mirror image of the consequences of an over-valued US dollar. Hence, particularly in the case of the USA, there is no escape from the fact that it is responsible for almost its entire trade deficit. The British and French cases are not different from that of the US since they both had overvalued currencies. What remains to be investigated is whether the sectoral approach to solving trade frictions (the latest in this is the approach referred to as market-oriented sector-specific — MOSS) is appropriate and also what fundamental solutions should be contemplated in order to tackle Japan’s basic problem of dependence on the outside world for its raw materials and energy supplies.