Europe Braces For The Japanese Challenge

For decades, the Japanese made huge inroads into the U. S. market while Washington tolerated egregious Japanese protectionism against U. S. products. Now, the Japanese are extending their reach beyond East Asia and North America to Europe, which until now has escaped the full force of Tokyo's attention. That, in turn, has predictably resulted in alarmed proposals, as protection-minded industrialists and politicians demand a Fortress Europe to withstand the Japanese onslaught.

Trepidation about le defi japonais was among the causes of a change in Premiers in France. Only time will tell if new Prime Minister Edith Cresson's passionate criticism of the Japanese is only domestic political posturing. But French protectionism is nothing new, and the heart of the matter is whether other European governments will be swayed by Madame Cresson's logic. France's partners in the European Community must decide whether to heed Cresson's call to resist Japanese encroachment on their turf or whether to accept the inevitability of Japanese competition in Europe and make the best of it. Either way, it has been America's fate to serve as guinea pig for their decision.

And there are lessons to be learned from the U. S. reaction to the Japanese challenge. For one, many would say U. S. antitrust policy has been a self-imposed handicap in combating Japanese imports. The EC may want to reconsider the wisdom of strengthening its internal antitrust policies just as the Japanese are making major strides in Europe. For another, unwavering pressure must be applied to Tokyo to open up its own markets. Europe is already making mistakes similar to the ones the U. S. made. The biggest is the failure, despite many grand pronouncements, to formulate a common approach toward Japan.

Whatever the Europeans decide, the scope of the challenge to U. S. industry takes on another dimension. U. S. industry has a $150 billion stake in Europe's decision through investments there. And for the sake of those investments, as well as U. S. exports to Europe, U. S. companies will have to be more quality-conscious and competitive in cost than ever before.

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