Chapter 3: Still governing the economy? Economic governance
On November 4, 1994, amid an infected debate between the United States and Japan over the trade imbalance between the two states, Tadahiro Sekimoto, vice chairman of Keidanren (Japan Federation of Economic Organizations) and legendary Chairman of NEC, gave a speech before the Foreign Correspondents Club of Japan in Tokyo (Keidanren Review, special issue, May 1995). Sekimoto’s message, in brief, was that although the yen–dollar exchange rate during the past decade had described a dramatically sloping curve, from ¥255/US dollar in 1984 to ¥115/US dollar in 1994, the trade balance between two countries had remain almost perfectly stable at slightly below $12 billion a year. Therefore, Sekimoto concluded, the root cause of the trade imbalance problem—as well as the policy prescriptions to resolve it—should be sought elsewhere. Had Sekimoto’s analysis ended here, his speech could have been dismissed as a statement presenting the views of one of the negotiating parties in an international trade dispute. But Sekimoto approached the trade imbalance problematic not from the traditional vantage point, countering allegations of unfair competition in the Japanese domestic market with arguments about superior Japanese product quality and only very limited legal trade restrictions.
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