MITI and the Japanese miracle

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ufacture integrated circuits. MITI sat on the proposal for some 30 months, claiming that it was giving the request "careful consideration." It then decided that the U.S. company would be permitted no more than a 50 percent ownership in conjunction with Japanese interests, that it would have to license its technology to Japanese competitors, and that it would have to limit its output until Japanese companies were better able to compete.

¹⁸

Similarly, at the time of the reversion of Okinawa, the Gulf Oil Company proposed building a refinery in Okinawa as a way of gaining access to the Japanese retail market. MITI said Gulf could not do so unless it had a Japanese partner, and when it looked as if Gulf might link up with Idemitsu Petroleum, MITI warned Idemitsu off.

¹⁹

Other issues included television exports (on June 9, 1970, Zenith charged that the Japanese were dumping TV sets in the United States, and MITI Minister Miyazawa Kiichi all but conceded the point by acknowledging that Japanese television receivers cost more in Japan than outside the country), grapefruit imports (during December 1968, the United States asked for liberalization of imports of grapefruit, tomatoes, ham, sausage, beef, and other agricultural products, but the Agriculture Ministry took a page out of MITI's book and refused), and above all joint ventures in the automobile industry.

²⁰

With the hindsight of a decade the automobile controversy of the late 1960's seems almost laughable (during 1979 Japan sent 2.1 million cars to the United States, while the United States sent 16,224 to Japan).

²¹

Realistically, the issue was never one of imports of American automobiles: American manufacturers made no effort to develop models that would appeal to the Japanese market, the Japanese tariffs were too high, and American cars were too big and too expensive to operate in Japan. The issue was the desire of the American Big Three auto firms to buy into Japanese automotive companies as part of their global manufacturing and marketing strategies. Throughout late 1967 and 1968, following the first round of capital liberalization, executives of Ford, General Motors, and Chrysler were in Japan seeing whether they could find partners for joint ventures. Meanwhile, MITI was doing its best to merge the smaller auto firms into keiretsu built around either Nissan or Toyota. As we saw in the last chapter, Sahashi had already succeeded in merging Nissan and Prince, and MITI was now extracting promises from all the other producers not to contemplate joint ventures with the Americans unless they first talked it over with the ministry. Just to make sure that nothing went wrong, MITI also mobilized its amakudari network in the auto industry: Yamamoto