Barriers to U.S. Service Trade in Japan

This report summarizes findings drawn from case studies of six industries involved in service trade between the United States and Japan: banking and securities, insurance, law, accounting, data communications, and advertising. The authors drew on interviews with business, government, and research people in Japan and the United States; trade journals and newspapers; and scholarly journals and books. The most important barrier they observed was general regulation of specific industries. Regulation was found to limit entry into the industry, restrict the range of products, control prices, retard innovation, and validate cartelization. International efforts to reduce trade barriers arising from domestic regulation have a better chance of succeeding when coupled with domestic demand for deregulation. A related RAND report, N-2169, Case Studies of U.S. Service Trade in Japan, provides a fuller development of the cases.