US PUTS SCREWS ON JAPAN

American pressure. is driving Japanese capitalism to seek new markets for its exports in Europe.

Earlier last week, Japan's Minister of International Trade, Kakuei Tanaka said that while the United States accounted for 30 per cent of Japan's foreign trade, the Common Market took only 6.8 per cent of: japanese exports and accounted for only 5.8 per cent of its imports.

"This is relatively small so we see a need to expand the share, Tanaka commented.

The need, in fact, is desperate. At the top-level ministerial meeting of the Organization for Economic Co-operation and Development in Paris this week Tanaka faces stringent new demands from the United States for further cuts in its US export trade.

The meeting comes just five months after the top-level gathering in Washington which decided, to devalue the dollar and impose a yen revaluation of 16.88 per cent. The Washington agreement, heralded by President Nixon as 'the most significant monetary agreement in the history of the world' is already in tatters. restore convertibility have met stony resistance from Washington and all the time the struggle for markets between. the main capitalist blocs has intensified.

Concessions The American employers are demanding bigger and bigger concessions from their overseas competitors. Not content with the existing yen revaluation they are already talking in terms of another revaluation to price Japanese products out of even more markets.

Earlier this month, for example, Henry Kearns, President of the official US ExportImport Bank, returned from a mission to Tokyo predicting a further yen revaluation this year. His move, only three days before the arrival in Washington of a Japanese trade delegation, was designed to smash any remaining hopes among the Japanese delegation.

Kearns' statement has to be seen in the light of America's trade deficit with Japan. Last year, this stood at $3,200m and despite the swingeing yen revaluation it is expected to top $4,000m this year.

Nixon administration officials are openly charging that the December revaluation was a 'paper transaction' which failed to raise the price of Japanese exports.

When the trade delegation arrived it was told in curt, firm language that anti-dumping laws would continue to be rigorously applied against Japanese goods; that the Japanese must begin spending their $17,000m stock of foreign reserve currency; and that failing another yen revaluation the price of Japanese exports must immediately be raised.

This was nothing more than a curt, firm invitation to commit hara kiri. It was not by any means the last blow. Within days, the US Treasury Department was announcing a large-scale investigation into the possible illegality of Japanese government subsidies on consumer electronics products exports.

This rigorous application of anti-dumping legislation followed persistent complaints from US electronics producers who want their home market protected; it produced anguished cries of horror from the Japanese competitors.

"The US charge is utterly groundless, wailed Keiichi Terada, section chief at Tanaka's ministry. And Shigeo Yoneda, head of the Electronics Industry Association, said the complaints filed at the Treasury by US firms were based on a deliberate distortion of the facts.

Terada even threatened to take the Treasury Department to the General Agreement on Tariffs and Trade-an empty threat as the US has so far shown supreme contempt for the rules of the international trade game.

The implications for the electronics manufacturers are extremely serious. Their recent exports, which have been running at relatively high levels, were contracted for long before the yen revaluation. But at the post-December prices there are far fewer takers and work for the Japanese factories is beginning to dry up.

The same process is going on in other industries. The textile industry, which recently accepted stringent 'voluntary' curbs on its shipments to the United States, is deep in recession.

The steel industry, the most modern and capital-intensive in the world, recently slashed its overseas orders for iron ore and agreed to cut back production by over 10 per cent. The same process is going on in the copper refineries which are closely tied up with the electronics industry.

This explains the ruthless drive now under way to increase Japan's share of the European market. The prospect of Japanese competition intensifying is already sending shivers down the spines of European motor manufacturers whose profits have fallen to rock bottom and whose products are more expensive than those of their Japanese competitors.

Japanese firms are seeking to establish reliable sales and service organizations preparatory to launching the most concentrated sales drive ever seen in the European motor industry. There is talk of possible mergers between British and European car manufacturers and their Japanese competitors to divide the market up.

Meanwhile the Us presses relentlessly on with its trade offensive against Japan. The Japanese fear their markets in the US will be closed for good if they don't toe the line, so they are forced,however reluctantly, to swallow the Nixon prescription.

On the eve of the OECD meeting the Japanese Cabinet council met to draw up a programme aimed at satisfying the American demands. Trade Minister Tanaka assured the press that there would be no new yen revaluation despite pressure from Washington and said he would accept full political responsibility if to avert such a step failed.

The measures announced by the Cabinet council are sweeping enough by any standards, but they are unlikely to satisfy Washington.

They include relaxation uf import quotas, which should chietly benefit US manufacturers; extension of the existing 'orderly marketing' scheme to control exports; and encouragement of capital exports.

Whatever the outcome of the OECD meeting, it ís already clear that Washington will not be satisfied by this kind of palliative package. The Americans have insisted from the start that they are not interested merely in reducing tariffs and winning trade concessions here and there. Now system What they want is nothing less than a completely new monetary system tailored-like Bretton Woods—to the requirements of dollar imperialism. The essence of such a system as far as Washington is concerned is that it must off-load the burden of economic crisis onto its foreign competitors.

Washington's guns: at the moment are trained on Japan, but the trade war is not just a US-Japanese conflict. Other capitalist countries, especially in Europe, are next on the list.

Eugene T. Rossides, assistant US Treasury Secretary for Enforcement and Trade Affairs, said that the anti-dumping investigations now being concentrated against Japan may be extended to other countries.

The Americans made it clear in talks with the Common Market countries earlier this year that they expected serious concessions over the coming months. The drive for markets and the cut-throat competition between the capitalist powers is the economic background to all the attacks on the working class in Britain and throughout the world.