Business: Japan, Inc.: Winning the Most Important Battle

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businessmen, technicians, engineers and salesmen swarm over the globe—inspecting, surveying, planning, advising, bargaining, buying and selling. One group is now in Hanoi, working on an agreement to help the North Vietnamese set up a shipping firm, textile plant and garment factory. In Zambia, geologists are surveying copper fields. On Vancouver Island, lumber men are demonstrating a new technique for cutting timber that used to be considered waste. Other groups are supervising production of Honda motorbikes in Brussels, studying sites for a hotel in Alaska and building a steel mill in South Africa, where the Japanese are considered honorary-whites. In any market that arouses their interest, the Japanese use jinkai senjitsu (human-sea tactics), inundating the area with trade delegations and survey groups. Local businessmen sometimes feel that they are being overwhelmed by sheer force of numbers.

Fearful and resentful, European nations have built a daunting array of barriers against Japanese goods; Italy alone has 46 import quotas directed specifically against them. Asian leaders also complain. Antonio Villegas, mayor of Manila, recently inveighed against the "insidious Nipponization of the Philippines"—then excused himself to greet a visiting delegation of Japanese advertising men. Says K.S. Yossundara, an official of the Bank of Thailand: "The average Thai wakes up to the call of a Japanese alarm clock and probably brushes his teeth with Japanese dental cream. His car or motorcycle is Japanese, and so are his shirt and trousers. Even the movie he watches on a Japanese TV set may well be Japanese."

The deluge of Japanese imports is arousing an angry protectionist reaction in the U.S.—Tokyo's wartime conqueror turned No. 1 trading partner (see Symposium, page 90). Fully 30% of Japan's exports go to the U.S. As recently as 1964, Japan bought more than it sold in U.S. trade. Since then, the popularity of Sony TVs, Nikon cameras, Panasonic radios, Toyota and Datsun cars, and Honda and Yamaha motorbikes has turned the picture upside down. Materials-short Japan is a big and growing consumer of American coal, lumber and even soybeans, but in each of the past three years its sales to the U.S. have exceeded its purchases by more than $1 billion. The American shoe, textile, electronics and other industries have not only lost sales and profits to the Japanese but jobs as well. A member of the Nixon Cabinet voices the alarmist view held in some high Government circles: "The Japanese are still fighting the war, only now instead of a shooting war it is an economic war. Their immediate intention is to try to dominate the Pacific and then perhaps the world."

The business backlash stings Japan in many ways. The U.S. is negotiating tighter quotas on Japanese steel and has just agreed on a quota for stainless-steel flatware. Many businessmen want the Government to go much further. Last year protectionists raced through the House a bill authorizing quotas on any foreign product that won as much as 15% of a U.S. market. The chief target: Japan. The bill died in a Senate adjournment rush, but the import debate has resurfaced this year in a way that could poison U.S.-Japanese political relations.

Closed-Door Policy

The most incendiary battle centers on imports of Japanese textiles. Last year they accounted for only 1.3%