Institute of Pacific Relations

Forging of Far Eastern Links in World AirwaysAuthor(s): C. P.Source: Far Eastern Survey, Vol. 5, No. 20 (Oct. 8, 1936), pp. 219-220Published by: Institute of Pacific RelationsStable URL: http://www.jstor.org/stable/3023363 .

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1936 A Japan- U. S. Trade Agreement; Far Eastern Airmay Links 219

A JAPAN-U. S. TRADE AGREEMENT?

A recent press report from Tokyo states that the

Japanese government is increasingly desirous of reach-

ing an agreement with the United States on questions of trade. It predicts "an active effort in that direction as soon as America's presidential election is out of the

way." Although this straw is hardly sufficient to indi- cate how the wind of Japanese official opinion is blow-

ing, the general situation of Japan's foreign trade is such as might well incline the authorities toward plac- ing commercial relations with the United States on a more stable basis. The export boom is gradually slow?

ing down as the effects of yen depreciation wear away and rising barriers are encountered in foreign markets.

Meanwhile, the trade balance grows increasingly un- favorable. Looking ahead, Japan sees a possibility of

having to work not only to expand her market con-

quests but to protect those already won. Illustration of these two tendencies is found in recent news items:

one, that two Japanese officials stationed in this coun?

try, returning to Japan last summer, submitted to the home authorities a plan for the expansion of Japanese- American trade; the other, that organization of a guild to control exports to the United States is under way.

The sources of dissatisfaction arise, of course, mainly out of the dislocations produced by Japan's trade ex?

pansion. Basically, the issues reduce themselves to two major grievances. Japan complains of the un- favorable balance in her trade with America, which last year amounted to $50,000,000, and this year promises to be nearly twice as great. She points out that this phenomenon is due not only to the decline in United States imports from Japan, produced largely by the drop in the price of silk, but also to the note-

worthy growth of American exports to Japan. For this reason she feels that she has ground for protest against the raising of tariffs on her goods. The United States in its turn is concerned over the rising tide of

competitive imports from Japan, which though com-

paratively small in value have provoked such loud out- cries that the government has had to raise the tariff, by

various means, on a number of commodities. Feeling

among American business men is so strong that the gov? ernment would find it difficult, if not impossible, to

relax its protective vigilence. Is there, indeed, an impasse, or is an agreement pos?

sible? Among the devices suggested is that of a

Japanese-American trade commission, composed of

officials, experts and possibly traders of both countries, to which questions might be referred as they arose. In

particular, the commission might be asked to recom-

mend a compromise settlement before tariff action was

taken on any specific commodity. A possible basis for the work of such a commission

is seen in the principle of voluntary control of exports by the exporting country. This principle is already

exemplified in the agreements between the United

States and Japan on cotton cloth (for the domestic and

Philippine markets), cotton rugs and pencils. It was

discussed at some length at the Yosemite Conference of the Institute of Pacific Relations, where it was

pointed out that voluntary limitation by the exporting country involves no such international friction as does

restriction by the importing country, which frequently provokes protests, reprisals and trade wars. Such regu- lation of volume and price, moreover, might permit a

gradual enlargement of trade while guarding against the disturbances caused by too rapid expansion. Japan is equipped with well developed organizations for the

control of exports, and strengthening of their powers is

said to be among the policies contemplated by the

present government. Both the Japanese and American governments would

undoubtedly like to clear up existing misunderstand-

ings and thereby remove the subject of trade from the list of possible sources of friction. Nor is the con? sideration overlooked that such an agreement would have a stabilizing effect on the political situation in the Pacific. It could hardly be achieved, however, without concessions painful to some sections of public

opinion in both countries. M. S. F.

FORGENG OF FAR EASTERN LFNKS IN WORLD AIRWAYS

The race of American reporters around the world which is now being followed with keen interest, is

again focussing attention on the great strides made in commercial aviation in the Far East. Two of the laps of the journey, as announced in advance by one re-

porter, were to be via Imperial Airways from Europe to Hongkong and via the China Clipper from Manila to San Francisco.

The time between London and Hongkong is now cut to seven days, due to the new weekly service of

Imperial Airways between Hongkong and Penang, where connections are made with the Royal Dutch

Airways. From Hongkong to Manila necessitates a

short boat trip, but presumably it will not be long before this journey may also be made by air. Reports are current that the Hongkong Colonial Government has given the necessary permission to Pan-American

Airways to land planes there. This will mean that

Hongkong, rather than Canton or Macao, will be the terminus of the China Clipper. (See Far Eastern

Survey, Dec. 18, 1935, pp. 206-7.) Once the Clipper's schedule has been extended to

Hongkong, a short trip to Canton will bring passengers within reach of China's air service, which has made

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220 Forging of Far Eastern Links in World Airways October 8

remarkable progress in the last five or six years. From

Canton, one can fly by the line of the South Western Aviation Corporation, a Chinese company, to Wuchow, Nanning, Luchow, and Hanoi, service to the last point having been inaugurated in July. At Hanoi connections

may be made with Air France for European points. (See Far Eastern Survey, Jan. 29, 1936, pp. 29-30.)

The China National Aviation Corporation (Sino- American) operates 8 routes: between Shanghai and such strategic points as Canton, Peiping, Hankow and

Chengtu, also between Chungking and Hankow, Cheng- tu, and Kweiyang. The Eurasia Aviation Corporation (Sino-German) operates between Shanghai and Lan-

chow, Peiping and Chengchow, Lanchow and Paotou, and Sian and Yunnanfu via Chengtu.

The three companies cover a total of nearly 9,000 miles with their service. The combined record of the two latter (data are not available for the S.W.A.C.) for 1935, based on a recent report from the Canadian Trade Commissioner in Shanghai, is: 1,637,000 miles

flown; 13,368 passengers and 159,000 lbs of mail

carried. The same report, although it shows a steadily de?

creasing value in China's imports of airplanes and

accessories during the period 1933-35, assumes that

this is due to the exclusion of Government imports, which are generally known to have been considerable. The presence of American and Italian air missions (the first has now withdrawn) accounts for the large share of those two countries in China's imports of planes and accessories. It is further reported that the Curtiss-

Wright Company has built two aircraft factories, one in Hangchow and one in Shiukwan; that a Sino-Italian

factory is being built at Nanchang; and that plans are under way for the construction of a Sino-German plant.

In view of the great difficulties facing China in her endeavor to increase highway and railroad construction, and the obvious advantage of air travel when great distances are involved, there is reason to believe that the expansion of China's air service in the last few

years will be more than duplicated in the coming period. C.P.

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