Japans Rise Essay Research Paper Japan is

through better, more profitable and more certain export opportunities. Canadians

viewed the trade agreements as an opportunity to improve productivity and

competitiveness abroad and at home. Canadians had two main goals for the

agreement; to secure a substantial further reduction in the level of foreign

tariffs facing our exports and to reduce and bring under control NTB’s

inhibiting Canadian exports. Canada reduced protection on industries to boost

efficiency and lower consumer costs however kept protection where it was still

needed. The results of the agreement yielded a comparable reduction of Canadian

tariffs- forty percent of Japanese, United States and EEC tariffs together

helped along with comparable reduction of Canadian tariffs. Agreements were made

to instate international discipline to government procurement policies. The

biggest gain of the conference for Canada was with United States exchange of

tariff concessions. A deal with the United States was made that stated that

there must be an injury to their economy as a precondition to imposing

countervailing duties. What Japan gave us were tariff reductions in machinery,

chemicals, automotive and transportation equipment. There was another agreement

signed covering subsidies, countervailing duties, government procurement,

technical barriers to trade, import licensing, (clear publication of procedures

and simplified administrative practices) customs valuation and dumping. The

agreements also brought into perspective future opportunities for both

countries; one which was optimistic. Tariffs and other trade barriers are in the

process of being reduced, and improved framework for international trade

co-operation through numerous agreements was falling into place, less trade

restrictive measures were being used by governments, and there was greater

transparency in the system and less uncertainty for the business community. Due

to the transparency in the Japanese market, Canada’s role in the Japanese

economy became one of the largest consumers of machinery, cars, steel, and

electronic products. Canada also plays the role of supplier of raw materials to

Japan. Canada sells natural resources to a quickly expanding country with ever

expanding needs for raw materials with which to fuel their thriving industrial

sector. Canada’s exports to Japan include lumber, wheat, corn, and products that

are land intensive. Arable land in Japan is scarce and extremely expensive and

fifty-six percent of the forest area is privately owned. The land that is used

is very commonly on steep hills, where decades of reworking the soil has left it

in stages of plateaus on which rice patties and farmland are held. The arable

land is divided into many small farms averaging three point five acres in size.

Most of the land is over used since the farmers overwork it trying to get as

much out of as possible. Thus, Japan must rely on outside sources of agriculture

to supply its people with the necessary products such as wheat, corn, and other

grains. Canada’s position directly across the pacific from Japan made it a

variable partner for trade in these commodities. The USSR is in closer proximity

with Japan; however, political differences and problems made Japan view the USSR

as an extremely unstable and undependable source of agriculture. As Japan

drastically increased its capacity to produce and to consume, it became a major

part of the worldwide economy. However, as strong as the Japanese is, it is

nonetheless susceptible to problems. There is a current recession in Japan

caused by many factors, one of them being fiscal tightening representing an

increase in government revenues and decreasing government expenditures. Other

factors contributing to the Japanese recession included Asian economic

turbulence and a Japanese banking system deprived of strength. The magnitude of

the fiscal tightening was too large for the Japanese economy. Japan was not able

to absorb the fiscal tightening due to the economic crisis in some Asian

countries and because of the failure of major financial institutions. After

nearly four years of expansion from1987 to 1991, the Japanese economy went

through a recession starting in 1991 and lasting for thirty-two months. This

recession ended in March of 1993. The recession of 1991 to 1993 was the second

largest recession in the postwar period. The government made efforts to

reactivate the economy and introduced seven fiscal stimulus packages in four

years from 1992 to 1995. The Bank of Japan cut the bank rate to 0.5 percent in

1995 and has since kept it at this record low. The government undertook a major

tax reform in 1994 and cut income taxes through the tax schedule and through

increases in standard personal and employment income deductions. Therefore by

decreasing revenues the government attempted to promote spending. As a result

the national debt increased by about six percent of the Gross Domestic Product.

Another reason for this increase in debt was that the private sector was

unresponsive to the stimulus. One of the reasons for sluggish business

investment within Japan was due to the unstable nature of the economy and a thus

a flight of capital to the United States and other stable markets. Manufacturing

industry investments increased during the 1995- 1996 period, which was a sign to

economists that the economy was back on the path of self- sustaining expansion.

However the investment boom which was confined to a few machinery sectors was

sort lived. Investments by construction and real estate firms continued to

decrease, dragging down the economy. These private sector companies were

increasingly investing their capital abroad in the form of direct investments

which was leaving less and less money being inside Japan to stimulate

production, increase jobs and therefore increase the money supply. To worsen the

situation, a significant increase in import penetration observed from 1993 to

1995 was snuffing out domestic production. The decreasing amount of household

consumption in the 90’s reflected the weak state of the economy. Unemployment

grew, which raised concerns about job security and reduced people’s willingness

to consume. Weak demands for goods and services began to affect employment.

Employment in manufacturing started to fall; however the difference was absorbed

by the construction industry which soon became overloaded. The construction

industry soon followed suit. The unemployment rate reached high national levels.

Due to corporate restructuring as well as other factors, male labor unemployment

grew forcing the women of the households to try and find jobs, which was

contrary to traditional values illustrating the severity of the situation. As

the Japanese economy struggled to rise from the ashes, it built itself an

economy based on technology, which is evident especially in the machinery,

transportation and steel industries. In addition, Japan is one of the world’s

leading research platforms for new technologies in robotics and electronics,

making Japan a self-sustained ever-expanding country. Japan has stayed on the

leading edge of the world riding a wave of technology, which will definitely

carry it into the next millennium. Broad-based technological firms combined with

innovative, even unorthodox, business strategies are the supporting columns of

this immense notion. It is very possible for the Japanese people to overcome the

conditions brought upon by the recession through the policies they have adopted,

different from our own, and become the number one leading country in Gross

Domestic Product. This would put Japan in the spotlight of the rest of the

world, and maybe then, we will begin to consider many of the different ways they

do business.