Contrary to the claims of some American trade officials, Japanese markets are not closed to American goods. U.S. trade disputes with Japan are less about open markets than about obtaining special favors for certain industries.

Take the claim that there are barriers to sales by the Big Three automakers (General Motors, Ford and Chrysler) in Japan.

• The Japanese auto market, excluding cars with engines 2.0 liters or less, is 10.22 percent foreign, and the Big Three has a 5 percent market share.
• However, the Big Three don't export any subcompact cars to Japan, although subcompacts comprise 80 percent of the market there.
• In contrast, the market share for U.S.-made vehicles from the Big Three in Europe is less than 1 percent, since most of the Big Three cars sold in Europe are made there.

Since there are no legal barriers to U.S. exports to Japan, U.S. automakers and trade officials select statistics to show there must be "invisible" barriers - which they say must be remedied by guaranteed numbers of sales in Japan. Yet European automakers have been more successful in Japan.

• Until two years ago, U.S. automakers offered no cars with right-hand steering in Japan, and today offer only four models compared to more than 100 from European manufacturers.
• In the 1980s BMW, Mercedes Benz, Volkswagen, Opel, Rover and Volvo invested heavily in marketing and service operations in Japan.
• As a result, Europeans in Japan sold an average of 125 autos per dealer in 1993, compared to an average of 10 autos per dealer sold by the Big Three.
• Now German cars have a larger market share in Japan than they do in the U.S.

Trade with Japan is a two-way street. For example, Japan buys more auto parts from the U.S. than any other country, and this does not include parts the Big Three export to their own foreign assembly plants.

Source: Scott Latham, "Market-Opening or Corporate Welfare?" Policy Analysis No. 252, April 15, 1996, Cato Institute, 1000 Massachusetts Avenue, NW, Washington, DC 20001, (202) 842-0200.