The Antimonopoly Laws and Policies of Japan.

This book provides a detailed and well-organized overview of the policies that lie at the heart of Japan's recent international trade disputes. The authoritative study draws on both authors' long experience as senior officials of the Japan Fair Trade Commission (FTC), which enforces Japan's antimonopoly law. The book reviews the history of pro- and anti-cartel policy in Japan, before proceeding through a careful explication of forms of conduct prohibited under the Anti-Monopoly Laws, and procedures for enforcing them. An appendix includes the text of antimonopoly laws, regulations and various FTC guidelines.

Although the book is first and foremost a legal guide, it also engages in a broader policy discussion, which is useful in that it represents important voices from within the FTC. The most interesting questions addressed are (1) whether the FTC has managed to make Japan's markets as open and free as those of other advanced industrialized countries, and (2) whether cartels are good for economic growth. Iyori and Uesugi are quite clear on the first question. They argue that, thanks to U.S. pressure through the SII talks, Japanese antimonopoly law in its current form is as stringent as corresponding laws in the U.S. and Europe. But enforcement, while stronger than it once was, is still insufficient to offer equal access to Japanese markets by foreign firms. They cite Japan's high prices as evidence of continued weak competition and call for stronger enforcement of legal measures against unfair trade practices (pp. 288, 292).

The authors are ambiguous, however, about whether cartels are good or bad for economic growth. After showing that antimonopoly law enforcement was weak and cartels rampant during Japan's rapid growth period, they ask how the international competitiveness of Japanese firms can be explained. They argue deductively that, "[l]ack of competition would only lead to a less efficient economy, and cannot be consistent with international competitiveness" (p. 292). They explain the paradox in part by arguing that there was in fact considerable competition among firms alongside the cartels, and that MITI offered firms incentives to innovate at the same time they were protected by cartels and trade barriers. But the authors also acknowledge that lax antimonopoly law enforcement and weak price competition have benefited Japanese manufacturers by providing them with a domestic source of stable profits that they could use to make the necessary investments for competing in world markets (pp. 293-94).

Iyori and Uesugi argue that tougher enforcement would strengthen the economy and that Japan must enforce the law if it is to create fair and equal trading relations with other nations. The reader is left wondering where the domestic political support for aggressive enforcement will come from when the most prominent proponents of stronger enforcement acknowledge that Japanese firms have benefited from the high prices and protection from international competition that weak enforcement affords them.

The book would benefit from the addition of an index and from thorough editing of the often awkward language. Nevertheless, it will be an indispensable resource for anyone interested in this key area of Japanese economic policy.

MARK TILTON Purdue University, West Lafayette, U.S.A.