ABSTRACT
In the summer of 1976, the Organization for Economic Cooperation and Development (OECD) Secretariat proposed that three leading industrial nations—the United States, West Germany, and Japan—should adopt expansionary fiscal and monetary policies. US pressures on Japan for expansionary policies and for the adjustment of the United States-Japan bilateral trade balance have been inappropriate, inconsistent, and counterproductive. The New Protectionism rising in the United States can hardly fail to encourage the institutionalization of protectionism abroad. The seniority-wage system as combined with "lifetime" employment security cuts across the grain of Japan's present demographic transition. In contrast with Japan's unrivaled international marketing network, its domestic distribution system is backward and inefficient. By the use of protectionist tactics in its attempt to impose the locomotive strategy on Japan, the United States is thus involved in various types of inconsistency. The counterproductive pressure on Japan in behalf of the locomotive strategy implies a further inimical result.
