Abstract
The Compact Disc player, even more than VCR, was a complex product to standardise; it needed international support for acceptance of a format of both player and discs. This acceptance implied that the strongest business opponents had to join hands. Since the threat of market disruption was tangible, trade policy measures were considered. Increase in customs duties in accordance with rules of the General Agreement on Tariffs and Trade (GATT) in the WTO must fulfil special conditions. The final solution was complex, but in compliance with customs rules and the GATT. Although Japan previously introduced similar measures, a combination of customs legislation and trade policy instruments, the case of CD players was an innovation and took a route that closed afterwards. Chapter 4 reveals the background of the increase in duty on CD players and the various industrial, commercial, general economic, legal and political. Reactions from Japanese and European business communities were inevitably divergent.
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Notes
- 1.
Most-favoured nation according to Article 1 of the GATT means that the tariff is applied to all contracting parties of the GATT, with the exception of lower tariff in case of free trade areas, customs unions or preferential treatment of developing countries. Bound (Article II GATT) means that the tariff is contractually laid down in a schedule of tariff concessions and that the measure cannot be changed unless compensations are granted under specified circumstances and according to specified procedures.
- 2.
New Scientist, 8 January 1981, p. 77.
- 3.
It is impossible to separate effects of volume from time; they are corresponding phenomena.
- 4.
Leaflet of Electronics Industry Association of Japan (EIAJ), Tokyo, widely distributed in Europe in 1983: “Compact Disc. Why Double the Import Tariff Now”.
- 5.
- 6.
Chapters 7 and 8 deal with the issues of captive distribution systems and consequences for trade. Van Marion (1993) described the system. Bartlett (2008, p. 8) also elucidated: “Capitalizing on its broad line of 5,000 products (Sony produced 80), the company opened 25,000 domestic retail outlets. With more than six times the outlets of rival Sony, the ubiquitous “National Shops” represented 40% of appliance stores in Japan in the late 1960s. These not only provided assured sales volume, but also gave the company direct access to market trends and consumer reaction.”
- 7.
By their principled approach of trade questions, firmly opposing “protectionism” of the French, who were accused of “mercantilism”, the Dutch were called Ricardists.
- 8.
GATT Document Secret/296 + Add contains the request for or rather announcement of the intention to increase the duty.
- 9.
Before a trip to Japan, he accused the Japanese of “scorched earth trade policy”, a phrase not welcomed by more timid civil servants in his department. Especially those who accompanied him on the trip feared that the visit would not have the relaxed character they naturally hoped for.
- 10.
Nobody expected, of course, that the record player would return for disco applications.
- 11.
General Agreement on Tariffs and Trade Application of Article XXVIII to new products, L/5522 11 July 1983, communication from the Permanent Mission of Japan, dated 7 July 1983.
- 12.
Understanding on the Interpretation of Article XXVIII of the General Agreement on Tariffs and Trade 1994.
References
Bartlett CA (2008) Philips versus Matsushita: a new century a new round. Harvard Business School, Boston, Mass., Rev. January 17, 2008
Van Marion MF (1993) Japan and international trade, the incompatibility issue. Physica-Verlag, Heidelberg
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van Marion, M. (2014). CD Players: Laser Light at the End of the Tunnel. In: International Trade Policy and European Industry. Contributions to Economics. Springer, Heidelberg. https://doi.org/10.1007/978-3-319-00392-4_4
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DOI: https://doi.org/10.1007/978-3-319-00392-4_4
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