BPEA | 1991 No. 1

Efficient or Exclusionist? The Import Behavior of Japanese Corporate Groups

1991, No. 1

IN THEIR DISPUTES with Japan, U.S. trade negotiators have increasingly concentrated on deeply rooted structural aspects of the Japanese economy. In the recent structural impediments initiative (SII), for example, the U.S. government argued for increased antitrust enforcement, and, in particular, for increased policing of Japanese corporate groups known as keiretsu. The joint report issued at the conclusion of the SII recognized that “certain aspects of economic rationality of Keiretsu relationships notwithstanding, there is a view that certain aspects of Keiretsu relationships also promote preferential group trade, negatively affect foreign direct investment in Japan, and may give rise to anticompetitive business practices.” In response to the SII, the government of Japan agreed to strengthen its Fair Trade Commission’s (FTC) monitoring of transactions among keiretsu firms and to take the necessary steps toward eliminating any restraints on competition that might arise from their business practices.