U.s.-Japan Semiconductor Trade Agreement Of 1986
And even for the bush administration`s efforts, the administration cannot show hypocrisy and, speaking of free trade, renew, or even strengthen, a protectionist and price-resistant cartel. 4) Promote the sale of American-made memory chips to Japan to gain at least 10 percent of the Japanese market for Americans. Under the agreement, if necessary, the Japanese government will force its industry to limit production, creating a shortage that could be filled with U.S. chips. The 1986 protectionist agreement was intended to protect U.S. producers of certain types of semiconductor chips from Japanese competition. The Japanese produced high-quality memory chips at low prices, and American buyers of course bought. (1) monitor japanese companies` exports to ensure that they do not sell semiconductors at prices below production costs; Britain`s Financial Times drew this conclusion last month. The move for a new trade deal, the Times told its global readership, is „a sign of weakness.“ On the contrary, policymakers in Washington often respond to short-term complaints from interest groups, without fully considering the consequences of their actions. This was the case with the initial semiconductor agreement. Some U.S. computer chip makers recognized the short-term benefits, but manufacturers who used these chips in their computers suffered.
„We have ended the system of controlled trade,“ Tsukahara, Japan`s minister of international trade and industry, said in a statement. „We have put in place a multilateral framework for cooperation fit for the new era.“ Meanwhile, Japanese producers are under increasing pressure from semiconductor manufacturers in South Korea and Taiwan. This has allowed Japanese industry to better compete in international markets. This growth indicates that it is market forces rather than industrial policy that have helped Japanese companies. To avoid such a situation, the Bush administration may well order the Department of Commerce or the Federal Trade Commission to study the negative effects of the semiconductor deal on U.S. computer manufacturers. . . .