NOV..
23
20-per-cent preference, their plywood products will be- come overwhelmingly strong. Japan's plywood makers fear that production of their main item, “doorskins,” may have to be cut back by at least one-half.
With textiles, it is unlikely that the situation will become worse than it is today, since the United States, anxious to protect its own textile manufacturers, will be excluding most textile items from preferences. Although there is some worry about silk fabrics, our manufacturers are confident that South Korean fabrics will not displace high-grade Japanese silks. But since Japanese textile goods, with the sole exception of wool fabrics, have for the past three years or so made no appreciuôle headway, there will undoubtedly be a decline of competitive strength.
United States and Japan at War
In Electrical Home Appliances Electrical home appliances are doubtless among the items which will suffer as a result of non-reciprocal preferences. Although currently Japan has the biggest share, among foreign suppliers, of the American market, the trend is toward dedine of the lead position. For example, with black-and-white television sets, imports from Taiwan are taking over the share held by Canada and the Netherlands. The Japanese transistor radios continue selling well. But Taiwan and Hong Kong products, particularly in the cheaper grades, are rising fast. With single-band AM sets, the market shares are: Japan, 55 per cent; Hong Kong, 30 per cent; and Taiwan, 12 per cent.
Behind this strong upsurge are an abundance of high-grade, low-cost labor and investments by foreign interests. Taiwan is recipient of investments from both the United States and Japan, by such firms as Philco-Ford in television sets, radios and tape recorders; Admiral in monochrome television; General Instruments in integrated
2. State of Competition in the American Market (Imports)
(percentages)
Canned Mandarin Oranges Plywood
1966 1968
Competitor Market Sharo
January-June 1969
Taiwan 14.4 Spain
0.4
Japan's Market Share
Jan-Jun. 1969 92.6 90.2 84.9 37.1 31.1 28.6
S. Korea 29.1 TAiwan
13.9
Cotton Fabrics
26.1 29.5 29.1
dong Kong 19.
India
8,6
Carpetting
Metal Flatware
Cultured Pearls
Non-Metal Household Goods 35.9 36.4
Television Sets
49.6 40.9 40.6 93.1 911 86.8 79.7 66.3 67.8 36.6 91.6 91.2 83.4
iran
17.5 India
8.8
W. Germany 5.0 Britain Burma
6.2 India Hong Kong 9.4 Italy Tawan
2.9
5.1 9.3
4.3
Transistor Radios
90.5 92.1 88.9 75.2 60.8 42.3
Hong Kong is e
7.7 Taiwan 4.8 S. area
1.8 {Hong Kong | N Netherlands 5.7 Hong Kong 34.3 Italy
11.8 Hong Kong 28.9 Taiwan Phulippines 15.7 italy Philippines 16.3 italy Hong Kong 23.6 Italy Taiwan 17.7 S. Korea W. Germany 4.0 Hong Kong Hong Kong 78.5 Britain
Canada Taiwan
1.6
6.8
13.3
16.1
19.0
4.6 3.1
2.7
24 H
1.11 1
90.4 43.7 93.2
** H
1.5
67.8 2.1 54.6
8.5
10.7 9.3 7.0
Christmas Light Bulbs Semiconductors, etc. Travel Goods
Outer & Under Wear Handkerchiefs, etc. Leather Accessories Apparel & Accessories
74.2 7.5.9 72.8 92.8 91.5
91.8 34.5 19.8 20.4 32.1 33.6 31.2 35.9 32.0 31.6 35.5 31.9 36.4 26.3 30.7 28.6 19.6 11.4 14.5
76.6 64.7 62,3
Rubber & Plastic Gloves Halter # Plonde Caterwane 201
Footwear (no-icather)
Binoculars
Unicha
Wigs
-
༈...t།
** F**
44.ticomtuli/ Cutwat
Tiong Kong 29.9 Hong Kong 45.2 5. Koica 39.0
Source: MITI - "Oversona Markets White Paper"
circuits; and Consolidated Merchandising in tape re- corders. These are operating on fairly big scale, and the bulk of their output goes to the United States. The Japanese manufacturers are finding it difficult to compete if they continue producing in Japan; so they are also taking to the American practice of transplanting opera- tions to the LDC. Sanyo, Matsushita and Sharp Corp. have set up overseas ventures, and this trend applies not only to clectrical home appliances, but to heavy industrial prod- ucts, such as motor vehicles and chemicals. This means that competition goes beyond that between Japan and the LDC, and is becoming a race between United States and Japanese interests, or among our own manufacturers. In this sense, the benefit of preferences will be reaped more by the advanced country interests than by the developing countries.
Just how much Japan stands to lose under the preferences system is being estimated by the Ministry of International Trade and Industry. But according to one source, the amount, taking into account both decline of exports and rise of imports, will probably be quite insignificant at some $200 million at the most.
Concentration of Injury in Specific Areas
While for Japan's economy as a whole the adoption of preferences may not cause substantial damage, it cannot be denied that the problem is serious indeed for the threatened industries. The effect, in particular, of the decline of exports to the United States can be expected to be a major one.
In the sundry goods category, Tsubame, the metal flatware city; Nara, where baseball gloves and mitts are made; Nagoya and environs, where the plywood manufac- turers are located; and Tokyo, the Japanese toys center will experience economic depression of local communi- ties, presenting difficulties of a complex nature.
If conversion to some other form of manufacturing is sought, piecemeal readjustments will be extremely diffi- cult since the entire community operates as an integrated manufacturing system involving a multiplicity of enter- priscs and individuals. This situation calls for detailed countermeasures to provide relief and to effect adjust- ments among conflicting interests. But the Ministry of International Trade and Industry and the Medium and Small Enterprises Agency have formulated the framework of "measures for adjustment and aid" concomitant on adoption of non-reciprocal preferences. These measures will be for 1) identification of the business categories affected in considerable degree (in either import or export) as a result of preferences; 2) extension of low-interest loans to the designated businesses for promo- tion of modernization; and 3) if conversion to some other business is desired, the granting of low-interest (2.6 per
.pe}} bou ***
Promodon Corporation to enterprises acting collectively, or low-interest (6.5 per cent) loans from the Medium and`
THE ORIENTAL ECONOMIST
No comments yet.
Private notes are available after approval.