Japanese Competition in International Trade

Report Outline
World Trade and the U.S. Balance of Payments
Japan'S Leap Forward to Prosperity
Japanese Competition in World Markets
Preparation of Future Markets in Asia
Special Focus

World Trade and the U.S. Balance of Payments

Growth of Foreign Competition in U.S. Market

Less than 15 years after the defeat of Japan in World War II, and the loss of her empire and “co-prosperity sphere,” she has emerged as a formidable competitor of her former enemies in international trade. Japan is at present enjoying a business boom of unprecedented proportions, with her national output increasing faster than that of the United States, The slower rate of expansion in this country has been attributed in part to a marked change in the American position in world trade, accompanied by a steady worsening of the country's international balance of payments.

The end of a period in which the United States in effect financed the rebuilding of war-torn Western Europe and Japan appeared to be signalized at meetings in Washington of the free world's three great international financial institutions—International Bank for Reconstruction and Development (World Bank), International Finance Corporation, and International Monetary Fund—at the end of September. Secretary of the Treasury Robert B. Anderson appealed to the assembled finance ministers and governors of central banks for action to redress the imbalance of U.S. international payments. If the deficit accumulated over the past two years were not reduced by increased takings of American exports, he said, other measures would have to be considered to prevent continued draining of U.S. gold reserves.

American spending abroad—for imports, foreign aid, and private capital investment—now exceeds this country's international receipts by about $4 billion a year. Due to rising competition from reconstructed Japan, West Germany and other countries of Western Europe, imports to the United States exceeded merchandise exports in the second quarter of 1959. This was due in part to obstacles raised against American goods by countries whose own exports to the United States were rising sharply.