708-Chaudhari Technical Institute, Gandhinagar - Gujarat ...

their own, the Japanese government felt the economy should be guided in this
direction through industrial policy.
Japan's methods of promoting exports have taken two paths. The first was to
develop world-class industries that can originally substitute for imports and
then competition in international markets. The second was to provide
incentives for firms to export.
During the first two decades after World War II, export incentives took the
form of a mixture of tax release and government support to build export
industries. After joining the International Monetary Fund (IMF) in 1964,
however, Japan had to go down its major export motivation — the total
exception of export income from taxes — to comply with IMF procedures. It
did maintain into the 1970s, however, special tax handling of costs for market
development and export promotion.
Once constant trade deficits came to an end in the mid-1960s, the need for
export promotion policies diminish. In effect all export tax incentives were
eliminate over the lessons of the 1970s. In the 1980s, Japan continued to use
industrial policy to promote the growth of new, more complicated industries,
but direct export promotion measures were no longer part of the rule package.
The 1970s and 1980s saw the manifestation of policies to control exports in
certain industries. The great success of some Japanese export industries
created a reaction in other countries, either because of their success per se or
because of allegations of unjust competitive practices. Under General
Agreement on Tariffs and Trade (GATT) rule, nations have been averse to
raise tariffs of import quotas. Quotas violate the guidelines, and raise tariffs
goes beside the general trend among industrial nations. Instead, they have
resorted to realistic the exporting country to "freely" restrain exports of the
wrong product. In the 1980s, Japan was to a certain extent willing to bring out
such export chains. Among Japan's exports to the United States, steel, color
tube sets, and automobiles all were subject to such chains at a variety of
times.
106