ABSTRACT

The importance to specific Pacific Basin countries is quite highs for the United States, trade with other Pacific Basin countries is 37 percent of exports and 42 percent of imports; for Japan, the figures are 52 and 46; for ASEAN, 73 and 66. The Japanese auto industry sells a third of its production, outside of Japan, in the Pacific Basin. The interest in the Pacific Community flows from this rapidly changing structure. Where this affects governments is in trade friction. Formal United States trade policy since 1945, and certainly in this administration, is a free trade stance that favors countries that exploit comparative advantages, natural or otherwise, to improve their economic lot. One of the most examples of United States-Japan trade friction is the so-called voluntary restraints on automobiles. They were agreed to in 1981 and clearly came at a time of crisis for fche United States car industry.