When the heads of government of the European Economic Community meet in the Hague, the Netherlands capital, on Monday (29 November), one important topic they will consider will be the imbalance of community trade with Japan.
When the heads of government of the European Economic Community meet in the Hague, the Netherlands capital, on Monday (29 November), one important topic they will consider will be the imbalance of community trade with Japan. The E.E.C. has asked Japan to cut back on its exports and take more imports from Europe; its officials have said that Otherwise European countries may be forced into measures of retaliation. The Japanese cabinet has approved some proposals to meet this demand. Details have not yet been published, but Community officials in Brussels are reported to be pleased with the response.
SYNOPSIS: Shipbuilding is a striking example of how Japan is dominating the market. In the first half of this year, Japan took nearly three-quarters of the orders placed with the main shipbuilding countries. For the month of September, this has risen to over 90 per cent.s The European shipbuilders complain that this is not due to the greater efficiency of Japanese yards; they say that easy credit and below-cost price quotations have been getting Japan an ever-growing share of a shrinking market.
Only three or four years ago, the demand for huge oil tankers was booming. Japanese yards expanded to meet it. Then come the oil crisis. Tankers were left lying idle in the world's ports. The demand for merchant ships fell away too, with the world trade recession. Even Japan's order books shrank.
But not as much as those of the traditional European shipbuilders, Sweden, the Netherlands, West Germany and Britain. The accusations often levelled at British yards -- labour troubles and late deliveries -- did not explain the decline in the share of the market experience by her European competitors. Now the E.E.C. is demanding that the Japanese should cut production; Japan has undertaken to consider the proposals.
In Britain, particularly in Scotland, shipyards were closed and unemployment mounted. Workers struck in protest and formed co-operatives to keep their jobs going. The British government is now in the process of bringing the shipyards under public ownership.
Another Asian country--South Korea--is also bidding for a share in the limited ship-building market. It rose rapidly to eleventh place in the world league table; and not being a member of the Organisation for Economic Co-operation and Development, is more difficult to bring in to any international plans to rationalise production. The same applies to Taiwan and Brazil.
Japan has given definite undertakings not to increase its car sales to Britain, at least for this year. Japanese cars are respected in Europe for their reliability and price. Automation and computer-controlled machine tools play a large part in the speed and efficiency of the production lines in the biggest firms, like Toyota. European firms are not complaining about this; but they do say that restrictions imposed by the Japanese government prevent them from reciprocating by selling their own cars in Japan.
The growth of Japanese cars exports to Britain has been spectacular. The main importer, Datsun, sold only 55 cars in 1968. In 1975, this had risen to 64-thousand. Altogether, Japanese cars take just under a tenth of the British market.
For the British customer, the main attraction of a Japanese car is immediate delivery. But the fall in the value of the pound is making the price less attractive, and may reduce sales props cts.