Regionally Japan is strengthening ties with the United States and other
Pacific countries in the interchange of people and goods.
The volume of transport between Japan and China is noticeably increasing
in both shipping and air transport, and Japan is making positive cooperative
efforts in the development of transport facilities. Japan is also strengthening
ties in the exchange of personnel with medium-developed nations (territories)
of the Far East where international transport is making rapid progress. Since
Japan imports large quantities of iron ore, coal and other raw materials from
Oceania, Japan's maritime transport in this region has a greater share than
that of the United States.
The United States, which has large shares in Japan's shipping and air transport
markets, is pursuing liberalization policy in these fields. This policy has
had a great effect on maritime transport in this region. For instance, competition
has intensified on the North American route, since the tariff adjustment function
of the liner conference has been weakened.
(1) Oceangoing shipping
@International environment
Japan is one of the few countries which has completely opened its oceangoing
shipping market to foreign vessels. Since many countries, mostly developing
countries, adopt various restrictive policies, such as reservations for their
own vessels, Japan's oceangoing shipping is losing room for free activities.
The Iran-Iraq dispute threatens the safe navigation of Japanese vessels.
Japan's oceangoing shipping companies are placed in a increasingly difficult
position on the North American regular route where competition is intensifying.
The international competitive power of Japanese vessels, mostly greater coasting
vessels, is weakening. One encouraging report is that an international accord
may be reached to settle the longpending questions related to flag-on-convenience
vessels.
ASlump in oceangoing shipping
The world's oceangoing shipping continues to suffer stagnant market conditions
simultaneously in three divisions: the oil tanker division is suffering a slump
caused by the overtonnage in the face of substantial cuts in oil transport:
the tramper division is also suffering a slump caused by the supply of more
vessels than needed: and the liner division faces intensified competition as
a result of the participation of medium-advanced countries (territories) of
the Far East and the enforcement of America's new shipping act. Japan's oceangoing
shipping is also placed in a difficult position. Combined, Japan's 10 major
oceangoing shipping companies have registered losses in their current accounts
since fiscal 1982. To overcome these difficulties, it is urgently necessary
to do away with the overtonnage throughout the world. Japan's shipping industry
also faces the task of trimming its management by scrapping worn-out, uneconomic
vessels. (Figs. 6
and 7)
BRecommendations by Council for Rationalization of Shipping and Shipbuilding
Industries
In these circumstances, the Council for Rationalization of Shipping and Shipbuilding
Industries made an interim recommendation (August 1984) and a final recommendation
(June 1985) on the future of oceangoing shipping, dealing with such subjects
as the formation of an internationally competitive fleet and revitalization
and rationalization of these industries.
These recommednations emphasized that the regulations concerned with the
shipping concentration system should be relaxed in order to maintain an internationally
competitive fleet and that business relations should be established through
talks among those concerned in accordance with their respective circumstances
on the basis of their judgment and responsibility. The recommendations also
suggested that flexibility should be given to the space charter system on the
North American route to enable companies to operate on a free commercial basis.
The recommendations also stressed the need to cope with various international
problems, including the worldwide overtonnage bottoms. (Fig.
8)
CEnforcement of measures based on recommendations
Is accordance with the above-mentioned recommendations, the Ministry of Transport
has taken the following steps: 1) to promote the modernization of vessels, the
Japan Development Bank's loan rates for super labor-saving vessels were raised;
the special depreciation rates for modernized ships were also raised; 2) to
reactivate business operations, the restrictions on dividends were relaxed;
and 3) the shipping management system and liner operation system were reorganized
in response to the recommendations. (Fig.
9)
(2) International multimodal transport
As mentioned in the section dealing with oceangoing shipping, international
competition is intensifying among business firms, and the international business
climate is becoming increasingly severe. At the same time, demands for transport
are undergoing major changes against the backdrop of changes in the industrial
structure featuring soft economics, e.g., computerized services. There are increasing
numbers of enterprises in which oceangoing shipping and air cargo transport
are combined with land transport in foreign countries. Such international multimodal
transport is making rapid progress particularly in the field of small lots,
and both Japanese and foreign air transport operators place emphasis on the
parcel delivery services by trucks. The contents of this type of service duffels-from
one country to another because of the special character of international multimodal
transport in which different modes of transportation are combined, and internal
and external transport systems are combined. It has therefore become an important
task for the Government to take adequate steps for the operation of this system,
so that international multimodal transport can develop without trouble.
(3) Promotion of personnel interchanges through tourism
There has been a marked increase in personnel interchanges between Japan
and foreign countries in recent years. By international standards, however,
the number of immigrants to or from Japan is only about 15% of that of the United
States, Britain, France and West Germany on the average. Compared with Japan's
economic scale and trade volume, its personnel interchanges remain on a considerably
low level.
To eliminate the lack of mutual understanding, which is thought to be one
remote cause of today's economic friction, it is necessary for Japan to unfold
a new outbound policy, including cooperation with foreign countries in the promotion
of tourism and the promotion of Japanese trips abroad through the dispatch of
survey teams to foreign countries. At the same time, it is also necessary to
pursue an inbound policy, including the promotion of international model zones
to encourage foreign tourists to visit Japan.
(4) Expanding international air transport
With recovery in world business, demands for international air transport
are in the process of recovery. The volume of international regular air transport
departed from and arrived in Japan during fiscal 1984 increased in both passengers
and cargoes by 8% over the previous fiscal year. (Fig.
10) In May 1985, Nippon Cargo Airlines began flying into the United States
against the backdrop of noticeably increased demands for cargo transport on
the pacific route.
Inequality in air interests between Japan and the United States was corrected
to some extent in April 1985 when an interim agreement was reached between the
two nations, which provided for the participation of Nippon Cargo Airlines in
the Pacific route, the exchange of the Japan-Micronesia route for the equal
number of designated companies, and the opening of three new routes. This agreement,
which aimed at expanding the two nations' air interests in the form of maintaining
equal opportunities and a fair transport order, marked a step forward in the
negotiations for revising the Japan-U.S. aviation agreement. The operation of
this interim agreement will be carried out on the basis of studies of the business
system of Japanese air companies by the Council for Transport Policy. Japan
has to make continued efforts to achieve an overall equilibrium in air interests
between the two countries. In relations with the Soviet Union, a direct Tokyo-Europe
route over Siberia will be opened after April 1986. Thus, various air routes
and interests have been expanded or will be expanded to enhance user's convenience.
Keeping in mind the promotion of personnel interchanges, and the establishment
of equality in air interests, Japan will endeavor to maintain transport capabilities
in accordance with the demand.
Although the tonnage of vessels built in fiscal 1984 increased over the
previous fiscal year, it remained only half that of the peak year (1975). While
the share of west European shipbuilding countries has been reduced to half from
that of the peak year, Third World shipbuilding countries are increasing their
share. Since a continued slump is predicted for the shipbuilding industry, the
international situation is bound to become increasingly complex and difficult.
(Fig. 11)
In these circumstances, Japan and European countries exchange views and information
at the OECD working party on shipbuilding and other forums. Dialogue has also
begun with the Republic of Korea on a governmental basis.
Domestically, the Ministry of Transport has taken various steps, including
restrictions as far as possible on the development and expansion of facilities,
adjustment of operations and promotion of scrapping. The Ministry also plans
to carry out various long-term programs to develop the shipbuilding industry
on a stable basis.
(1) Promotion of external economic measures
In the field of transport, various requests have been made recently from
the United States and Europe in connection with their efforts correct trade
imbalances, such as participation in the Japanese trucking industry as part
of international multimodal transport, improvements in the certification system
related to automobile safety and antipollution standards, and reexamination
of various regulations related to the Civil Aeronautics Law to promote the import
of small-size aircraft. At the same time, Asian and Oceanian countries have
made strong requests to promote tourist interchanges.
In response to these requests, the Ministry of Transport has incorporated
into its action program improvements in the certification system for automobiles,
reexamination of the regulations related to aircraft and promotion of steps
to encourage Japanese tours abroad. The Ministry is determined to carry out
the action program speedily and adequately, while tackling external economic
problems in a positive way.
(2) Expansion of international cooperation
Since transport facilities are important foundations for socioeconomic activities,
Japan has received many requests for cooperation from developing countries.
This type of cooperation takes a large percentage in Japan's economic aid. (Figs.
12 and 13)
1 Financial cooperation
n fiscal 1984, a total of \87.7 billion in yen credit (lending contract basis)
was extended to 22 projects in China, Indonesia and other countries. Particularly,
China has become the largest yen credit recipient country on a net disbursement
basis. Most of these funds were targeted for transport facilities (railways
and harbors).
2 Technical cooperation
To help developing countries develop their transport infrastructures, it
is necessary to provide them with adequate guidance and advice in various stages
from planning and construction to maintenance and management after completion.
The Ministry of Transport in fiscal 1984 conducted feasibility surveys on
a total of 47 projects through the Japan International Cooperation Agency. The
Ministry also dispatched 76 experts on a long-term basis, and 125 experts on
a short-term basis, to 23 countries, and accepted 359 trainees from 53 countries,
through the Agency.
(3) Future tasks
To smoothly promote international interchanges, including economic cooperation,
in the field of transport, it is necessary to accurately ascertain the nature
of problems the developing countries face, and endeavor to enhance mutual understanding
regarding their transport policies. In particular, economic cooperation should
be extended in compliance with the needs of recipient nations from a long-term
point of view. The Ministry of Transport plans to promote high-level interchanges
from the standpoint of increasing mutual understanding and cooperation regarding
transport policy.
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