The Japanese government announced today that it will maintain its curbs on automobile exports to the United States at 1.68 million units in the coming year, the same level agreed upon last year.
In announcing the move, Minister of International Trade and Industry Shintaro Abe told reporters that Japan had decided not to press for an increase in U.S. car sales in light of "very sluggish passenger car demand in the U.S. market" and bleak forecasts for the coming year.
Abe said it was a "political decision taken in consideration of Japan's trade friction with the United States." In keeping the curbs in place, officials suggested that Tokyo hopes to avoid aggravating moves on Capitol Hill toward the adoption of protectionist-oriented legislation designed to reduce swelling U.S. trade deficits with Japan.
In Washington, U.S. Trade Representative Bill Brock said the United States welcomes the Japanese government's decision. Brock said the Japanese had "acted responsibly . . . We appreciate this action by Japan and hope that it will provide a significant benefit to the U.S. auto industry's recovery."
The automobile issue was the thorniest one in economic relations between the two countries last May when Ministry of International Trade and Industry (MITI) officials and U.S. Trade representatives agreed on a three-year program under which Japanese automakers would "voluntarily" restrain shipments to the United States.
MITI was charged with enforcing a reduction in exports to 1.68 million units in fiscal 1981, which ends tomorrow, compared with the 1.82 million units shipped during the previous fiscal year.
Under the terms of the agreement, Japan would be allowed to ship the same number of cars in the second year plus 16.5 percent of the projected increase in the American car market.
Citing U.S. Commerce Department estimates of a U.S. car demand of approximately 9 million units in 1982, Japanese officials contend that the second year quota should be placed at just under 1.8 million units. Officials suggested that they had decided to forego any increase according to the formula because it could further unsettle already delicate trade ties with the United States.
In the background is a record $18 billion U.S. trade deficit with Japan in 1981, which American officials estimate could go as high as $25 billion this year. The bulging trade gap has prompted a number of "reciprocity" bills in Congress calling for major trading partners to provide greater access to their markets.
During the tense auto negotiations last year, U.S. trade officials argued that the Japanese should provide a period of relief from their hot-selling exports to allow American automakers time to retool for the production of smaller, fuel-efficient models.
When originally bouyant forecasts for recovery of demand in the U.S. auto market failed to materialize, American officials are believed to have quietly discouraged the Japanese from seeking to boost their nominally self-imposed quota ceiling.
Strongly opposed to last year's agreement, Japanese automakers expressed dissatisfaction with MITI's latest decision. They appeared willing to go along with the curbs, however, rather than risk the renewal of moves in the U.S. Congress toward legislation enforcing more stringent cutbacks on Japanese imports.
Takashi Ishihara, president of Nissan, Japan's No. 2 ranking automaker, said today that MITI's decision was "unpleasant but unavoidable" in light of the continuing sluggishness of the U.S. car market. He expressed his hope for an early turnaround in U.S. auto sales and an end to Japan's export restraints.