Market Scene : Japan Deftly Fends Off ‘Dumped’ Wares : Its warfare nearly always stops shy of a legal assault.

TOKYO —  Dogs are to barking what Japanese companies are to . . . dumping?

Well, that may be a bit of a stretch. But it has sometimes seemed that way. Steel, machine tools, semiconductors, cars--just about every product from Japan you can think of has been the subject of dumping charges by U.S. industry at one time or another.

Japanese companies complain that American industry uses the dumping charges unfairly to beat up on importers. So when Japan turned around earlier this month and slapped anti-dumping tariffs of up to 27% on imports from 100 Chinese companies of ferrosilico-manganese, a product used in manufacturing steel, it raised more than a few eyebrows.

Industry representatives sounded just like their peers in other countries as they argued the need for some protection. “If our industry disappears, steel companies won’t be able to count on a stable supply of product,” says Kunihiro Kitamura, executive director of the Japan Ferro-Alloy Assn.

Will this, Japan’s first anti-dumping action ever, be the first in a flood of similar suits aimed at protecting Japan’s ailing, sunset industries? Is Japan following in America’s footsteps?

Hardly. If anything, the rarity of the action demonstrates how effectively Japan, a nation with among the highest prices in the world, has managed to control the flow of imported products without resorting to such clumsy legal measures as anti-dumping suits.

Only four dumping suits have ever been filed in Japan. The other three were withdrawn before an investigation was begun when the companies agreed to restrain their exports. Although textile and chemical industry associations are reportedly studying the ferroalloy case to see if they may have grounds for filing similar actions, Tomofumi Hiraku, director of International Trade Policy Planning at Japan’s Ministry of International Trade and Industry (MITI), said no other complaints have yet been filed.

Hiraku said high legal costs discourage dumping complaints. Also, strict evidence of injury to Japanese industry is required before the government will accept a complaint. In the ferrosilico-manganese case, the evidence of injury was clear, said Hiraku. China’s share of the Japanese market shot up to 39% in 1991 from 17.4% two years earlier.

MITI made sure its case was airtight, Hiraku added. Eight MITI officials, divided into two teams, spent a month investigating the market in China before concluding that the Chinese companies had indeed been selling their products in Japan at prices far below their own domestic prices.

“We wanted to show the proper way to conduct a dumping investigation,” said Hiraku. He noted that the Chinese companies were given eight opportunities to respond to the charges. By comparison, he says, the U.S. government often slaps duties on Japanese imports after only cursory investigations. Japan believes it was unfairly penalized recently when the U.S. Department of Commerce, acting on complaints of 12 U.S. steelmakers, imposed anti-dumping tariffs of up to 25% on steel imports from Japan.

If Japan is able to take its time investigating dumping cases, it may be because a country that just registered a $135-billion trade surplus has relatively little to complain about. It’s no accident that this month’s dumping penalty was imposed against China--the only major nation with which Japan has a trade deficit.

But there is another reason Tokyo seldom turns to anti-dumping laws. Japan has more effective, unofficial means of controlling imports.

Since the importers are mostly large Japanese trading companies, for example, they tend to be quick to take “guidance” from the government when imports seem to be getting out of hand.

In textiles, where Japanese imports have doubled to $12.5 billion since 1987, there has been only one dumping complaint--against South Korean knitwear in 1989.

“As long as there is no dumping and imports grow in an orderly manner, there is no problem,” says Tomoyuki Takeuchi of the Japan Textiles Importers Assn. If there is a sudden increase in imports of any product, Takeuchi says, the most likely way of resolving the problem is not to file a dumping case, but for the domestic industry to contact MITI. MITI then contacts the importers’ group and asks that they “please be more orderly.”

Even in the recent dumping case, it’s unclear it was necessary for MITI to take action. The mere announcement of its investigation at the end of 1991 led to an immediate drop in imports of ferrosilico-manganese as trading companies voluntarily reduced imports.

American executives look less charitably on Japan’s approach to controlling imports. They argue that Japanese industry, in collusion with the government, has rigged the market so price competition doesn’t necessarily lead to increased market share.

U.S. efforts to penetrate Japan’s market for soda ash--used in making glass, detergents and cleansers, and in which America enjoys a substantial price advantage--provide a good example of how Japan combats imports.

American companies first sought to penetrate the Japanese soda ash market in the 1970s only to discover that the four dominant domestic firms held annual meetings to set prices, set informal import quotas and channel imports through a single, jointly owned terminal to control the flow, according to a recent “United States-Japan Trade White Paper” released by the American Chamber of Commerce in Japan. It says Japanese trading companies refused to import soda ash in quantities that would hurt domestic producers.

Japan’s Fair Trade Commission has twice ordered domestic soda ash producers to halt their cartel-like behavior, but the companies have never been penalized. And while keeping U.S. competitors out, the Japanese firms have gradually built up equity positions in U.S. soda ash suppliers to get access to the cheap materials.

The U.S. share of the Japanese soda ash market is now about 20%, down somewhat from previous years. U.S. suppliers say they could have another third of the Japanese business if it operated by normal market rules.

“In America we buy on price, but here jobs are more important,” says W. J. Wheeler of S. M. C. Asia Pacific, the local division of America’s largest soda ash producer. “In an open market, Japanese companies would have been forced to pull out of the business or close down uneconomic plants.”

There is no incentive to dump in the Japanese market, explains Wheeler: “Even when U.S. product is cheaper it doesn’t increase our market share.”

Brisk Business

Although Japan has a huge trade surplus with the world, it imports more ffrom China than it exports.