Under Section 301 of the 1974 U.S. Trade Act, a U.S. export industry can petition the U.S. government to take up its concern that it has lost foreign market access because another country is not living up to a trade agreement it has signed with the United States.<sup>32</sup> Section 301 was strengthened and revitalized in 1988.

# _4.1. U.S. formal market-opening actions against Japan_

When Japan joined the GATT in 1955, the country was still very poor. The post-World War II occupation by the United States had only ended in 1952, and Japan’s domestic market was not yet attractive to U.S. exporters of manufactured goods. Japan had relied heavily on food imports from the United States and other countries in the immediate postwar period, but as Japanese farmers recovered from the war, the demand for imported food waned. Traditional policies of self-sufficiency began to be restored, and in some cases U.S. food exports were excluded. Thus, early market-opening efforts focused on agricultural products.

By the mid-1970s, the United States had adopted a more formal and legalistic approach to improving its exporters’ access to the Japanese market through the combined use of GATT dispute settlement and its Section 301 policy. Over the next twenty years, U.S. officials pursued at least 23 different formal actions against Japan in attempts to open up its market to U.S. exports. Figure 4 shows formal U.S. market-opening initiatives against Japan and the bilateral U.S.-Japan trade deficit by year from 1965 through 2000. Similar to the U.S. use of antidumping against imports from Japan as shown in Figure 3a, there is a strong positive correlation between the size of the bilateral trade deficit and these formal U.S. actions attempting to open up Japan’s markets to U.S. exports.

Table 5 presents detailed information on 23 formal Section 301, GATT, and WTO trade disputes that the United States initiated to open up Japan’s market.<sup>33</sup> While the United States had begun using the GATT dispute-settlement provisions in 1948, it did not file its first formal trade dispute against Japan until 1977.<sup>34</sup> U.S. use of GATT dispute settlement in the attempt to open up Japan’s market to its firms was most frequent during the 1977–1988 period, when it filed a total of 11 formal disputes against Japan. Japan was clearly an important target for the United States during this period, facing nearly a third of the 35 GATT trade disputes the United

> 32 For a discussion of Section 301, see Bhagwati and Patrick (1990) and Bayard and Elliott (1994).

> 33 All but one of the Section 301 cases against Japan listed in Table 5 are primarily about a U.S. export industry seeking additional access to the Japanese import market. The one case that does not fall into this category is the 1976 investigation in which Japan and the European Community were accused of colluding in a way that deflected Japanese exports away from the EC import market and toward the U.S. import market.

> 34 This section draws on data compiled by Hudec (1993). The United States was not the first country to file a formal GATT trade dispute against Japan.  Australia filed a formal dispute in 1974 over Japanese quantitative import restrictions on beef.

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