Chapter 13: The Japan External Trade Organization New York (JETRO)
Chapter 13. The Japan External Trade Organization New York (JETRO)
In the late 1980s, although the Japanese were purchasing foreign luxury brands, there had been little change regarding the deregulation of domestic markets and in the number of non-tariff barriers. Entry into the Japanese market was still through licensing agreements or third-party ventures. I had been informed that the Japan External Trade Organization (JETRO) was the government funded organization that promoted international trade and inward investment in Japan, which, at the time, was 2 percent of the GDP. Out of curiosity, on my way to a function at the Hotel Okura I stopped at JETRO’s HQ in Toranomon near the US Embassy. However, there was a queue of Japanese waiting for service and I decided to postpone the visit.
While on the market survey trip to Los Angeles and San Francisco I discovered that JETRO had an office in San Francisco. I called the office and, identifying myself as an employee of Mercian Inc., I asked if I could drop by. I was invited to attend the final day of an exhibit of the products of small businesses based in Gifu Prefecture and several adjacent prefectures at the San Francisco Convention Center. The products had been brought over by the business owners with the objective of receiving orders from US retailers. JETRO had organized the show but the businessmen funded their trip and the shipping of their goods. An American in his late twenties who had taught English in Japan was a JETRO local staff. A Japanese male in his forties who had been seconded to San Francisco from JETRO Tokyo was in charge of the office.
I first went to the JETRO office on Post Street to collect some literature about the organization. Glossy brochures titled “JETRO in America” were placed on tables in the reception area, identifying JETRO as a “non-profit, government-supported organization dedicated to promoting mutually beneficial trade and economic relationships between Japan and other nations.” JETRO had a network of 33 offices in Japan as well as 79 overseas offices in 56 countries. Worldwide staff totalled 1,300. The brochure listed seven offices in the US: New York, Atlanta, Chicago, Houston, Denver, San Francisco, and Los Angeles:
…where each has a comprehensive information center on U.S. Japan business and economic relations and offers American business people a variety of consulting services and other assistance. By far the major focus of our activities in the U.S. is helping American companies develop exports to Japan. Promotion of U.S.-Japan industrial cooperation, technology exchange and direct investment in Japan are also areas of significant activity. Over the years, JETRO has become a valued resource of thousands of American companies, particularly small and medium-sized businesses new to the Japanese market. In addition to directly assisting private companies, we cooperate closely with national, state and local economic development agencies, as well as with industrial and trade associations seeking to promote exports to Japan.
The brochure related the types of services available to potential exporters:
With a wide-array of effective export promotion services, a cadre of seasoned Japanese business experts and an extensive information infrastructure, JETRO is ideally suited to help American companies take advantage of burgeoning opportunities in Japan. From providing comprehensive market information to personalized consultation, representing products at key Japanese trade fairs to offering free temporary office space in major Japanese cities, we have what it takes to help American businesses get on the road to success in Japan.
The Ministry of International Trade and Industry (MITI) had established JETRO as one of its public corporations in 1956 to promote Japanese small business exports in international markets and to provide them with information regarding foreign markets. In 1958, JETRO created the Institute of Developing Economies (IDE) as a separate public corporation but it later merged with JETRO in 1998. In 1971, the International Economic and Trade Information Center was established.
Gifu Prefecture is known for products made from steel, namely, swords. The wares offered by the business owners from Gifu were knives and other utensils produced from steel. The business owners from the other prefectures displayed small wooden goods such as chop sticks and lacquer-ware. The products were not of the highest quality and pertinent only to niche markets. Disheartened from the lack of interest, the businessmen confided that they had sat in a room in the Convention Center for two days waiting for dealers to view the show but very few had turned up and they had yet to receive any orders.
I wondered why JETRO had invited these particular businesses to the United States in the first place, why JETRO had not promoted the show more vigorously in order to justify the businessmen’s outlay and why JETRO had not counselled the businessmen on the US market so that they could decide whether their goods were appropriate. The businessmen and the two JETRO staff invited me to join them for dinner at a Chinese restaurant. Concealing their disappointment, the businessmen tried to enjoy their final meal.
JETRO was providing services that appeared superficial at best and the organization seemed to be inconsequential as a trade promotion organization in terms of promoting Japanese small businesses abroad.
A Wee Break?
I exited TV Asahi on 7 December and began working at JETRO for the Ship Machinery representative office during the first week of January. I closed my checking account at Daiwa Bank because I had sensed that the bank’s management style was haphazard. My instincts proved correct. In late 1995, it suffered a $1.1 billion loss due to a rogue bond trader at the New York branch. Toshide Iguchi, who admitted to 30,000 unauthorized trades during twelve years in New York, was sentenced to four years in prison. Daiwa was accused of covering up the loss and ordered to shut down its US branches. Sumitomo Bank subsequently took over Daiwa’s operations.
Iguchi published Confession in 1997 in which he condemned the bank for covering up the loss and accused prosecutors of a sloppy investigation. In an interview with Bloomberg News on April 30, 2014, Iguchi claimed that only 5 percent of unauthorized financial trading cases were reported.
The same brochures titled “JETRO in America” were placed on tables in the reception area of the office. A woman in her fifties with bleached blond hair, reminiscent of a 1950s Hollywood movie star, manned the reception desk and greeted me in a Brooklynese accent.
The Ship Machinery office was down a corridor from the reception where there were also five one-man offices assigned to officials representing MITI’s industrial associations. There was a representative office for shipbuilding which was adjacent to the ship machinery office and representative offices for the Japan Bicycle Promotion Institute, which promoted Japanese bicycle exports, Japan Automobile Manufacturers Association (JAMA) and an association for the Japanese optical industry.
On the opposite side of the corridor across from the offices were desks with Apple computers where the secretaries who were assigned to assist each director worked. It was a drab, basic set-up. With the exception of one young American woman, the majority of assistants were Japanese women who were local staff in their late twenties and thirties.
My new boss did not promote ship machinery but rather boats and luxury yachts produced by the ship building industry, an industry that is highly subsidized by government (as it is in the US). His business card identified him as a JETRO employee. Beneath the JETRO logo he was identified as the representative for Ship Machinery. This was also the case for the officers representing the industrial associations to whom I was introduced. Even though they were representing their respective agencies they were considered JETRO staff. When I accepted employment in Ship Machinery, I was unaware that I also would also be regarded as a JETRO employee and not as an employee of Ship Machinery.
The officers appeared to have a relaxed work schedule and tended to arrive at JETRO around 10am to have a tea or a coffee and chat with their next door neighbors. They often were out of the office from early afternoon onwards. I rarely saw American visitors even though the officers had been seconded to promote their associations’ activities. Since they communicated in Japanese and read Japanese newspapers I could not ascertain if their English was fluent.
The Lay of the Land
A few weeks after I began working a short, stocky Japanese gentleman in his mid-fifties, dragging his legs along with iron crutches, stopped at my desk and introduced himself as a Director in the Research and Planning Department. He invited me to go out for a drink after work at one of his favorite bars near the office. I accepted because I could ask him about JETRO New York’s setup. Fluent in English, he was intelligent and well-educated. His face glowed with a smile much of the time, belying a very serious nature, and an inner pride tinged with cynicism that often got the best of him.
That evening he told me that he was born in Taiwan where, he claimed, his father was the Chief of the Secret Police during the war. He was an infant when the war ended and his family managed to flee back to Japan, his grandmother carrying him on her back. He had contracted polio as an infant, leaving him severely disabled. His legs were paralyzed, forcing him to wear a heavy brace and to use crutches to support himself.
The disabled in Japan were hidden away from society by their families who felt a sense of shame. During his childhood he was cared for by his sisters but, fortunately, in 1968, an American couple brought him to New York, supporting him until he found work, which was at JETRO New York where he had been ever since. MITI may have recognized his father’s position and offered him a job at JETRO but I would like to think that MITI was fortunate indeed to have a bilingual as the in-house translator whom they could trust to facilitate its interests in the US and to help officials seconded to the New York office. He also made himself indispensable sorting out problems encountered by the officers and their families who had also relocated to New York from Japan.
The director would never have been able to develop his talent and achieve his full potential in Japan. His job at JETRO New York translating and writing documents for Japanese officials, while providing good income, also enabled him to have a successful career as a writer, publishing books about Japanese history and English translations of Japanese Haiku. He had a drinking problem that probably was the consequence of years of taking JETRO representatives to bars as a means of introducing them to the finer aspects of New York life while simultaneously establishing a secure comfort zone for himself. These continuous forays should have adversely affected his health but, surprisingly, with the exception of bad hangovers and arriving late to the office, he seemed immune from illness. I continued to join him on occasion for drinks or for a meal with other JETRO representatives, which was always entertaining.
He was embraced by a large coterie of friends, among them female admirers, who were attractive, young Japanese women studying at Columbia University. He also communicated with women via FAX or email exchanging risqué Haiku. Although he had lived in the US since the 1960s and was married to an American, similar to the deputy director at TV Asahi, he identified himself as a Japanese.
The following day the director took me to his office in Research and Planning, explaining that several years earlier JETRO had moved office to the McGraw Hill Building from a smaller office located in the Time Life Building a few blocks down Avenue of the Americas. Mitsubishi Estate owned both buildings at the time. Due to the increase of representatives from Japan (the “bubble” effect) the office was expanded. JETRO acquired the adjacent office that had been rented by another company and refurbished the premises to meet the requirements of the new representative offices.
The director’s office was in JETRO’s Research and Planning Division at the other side of the forty-fourth floor and at the far end of the large room. The offices for the other directors were more spacious than the one-man offices on the corridor. The Executive Director of Research and Planning was seconded from JETRO Tokyo for three years. The other two employees who were also seconded from JETRO Tokyo worked in the adjacent office as researchers of US politics, foreign and trade policies. The officer seconded from the Economic Planning Agency (EPA) shared an office with a MITI officer, an engineer who searched for patents in Washington DC that were applicable to Japanese industry. The EPA, a MITI agency, was Japan’s main collector of Japan’s macroeconomic statistics. Next door was the office for officials from the Ministry of Agriculture and Fisheries.
The desks across the aisle from the directors’ offices were occupied by an officer sent for one year from the Japan Corporation for Small and Medium-size Enterprise (JASME), a MITI public corporation which was a state financial institution that was the consolidation of the Small Business Credit Insurance Corporation, Japan Small Business Corporation and the Textile Industry Restructuring Agency. There was a representative from the Ehime Prefecture government and an American male employee who assisted the three directors. He was a recent university graduate with a degree in Japanese studies and, as did the other American assistant, had taught English in Japan for several years.
The executive offices of JETRO’s Managing Director and President were next to Research and Planning. The Managing Director was an elite MITI official, in his mid-forties, who was posted for three years to oversee office operations. The President was also a MITI elite official who was posted for two years to represent JETRO America to US government officials, business leaders and to American academia.
A Curious Situation
It was perplexing that some of the officials were identified as JETRO staff even though they were not connected to JETRO or to MITI’s industrial associations and corporations. After doing a bit of research, I discovered that JETRO opened its first overseas offices in London and New York in 1959, registering in the United States as a public corporation and not as an agency of a foreign government under the Foreign Agents Acts of 1938, which caused some consternation among American officials. In 1976, the US Department of Justice sued the Japan Trade Council (established in Washington DC in 1958) for civil fraud, charging that MITI contributed 90 percent of the Council’s funds through its JETRO New York office. Soon afterwards, JETRO reregistered as a foreign agent. Since JETRO USA is registered with the US State Department, it is able to host various agencies and organizations that are not registered. Industrial organizations that sent representatives abroad to promote products of industries and local businesses used JETRO branches as bases for their activities. During the economic bubble a number of prefectures, anticipating economic expansion, also opened one-man offices at JETRO’s overseas offices to establish a presence without considering fully the objectives of their “presence.”
MITI used the JETRO offices as listening posts, keeping track of foreign trade regulations, foreign and domestic policies that would affect the import of Japanese goods, industrial and environmental standards, and government patent applications in anticipation that new inventions could be applicable for Japanese businesses. JETRO staff also collected macroeconomic data and surveyed foreign markets on behalf of Japanese businesses.
By 1975, JETRO was operating twenty-four trade centers and fifty-four offices in fifty-five countries, testimony that Japan had become a major player in world markets. Besides the JETRO offices, MITI officers were loaned to Japanese consulates, embassies and Japan Chamber of Commerce offices for periods of two to three years.
The Manufactured Imports & Promotion Organization (MIPRO) was established in 1978 by MITI. MIPRO operated an office in Washington, DC where MITI officials and Japanese trade delegations visited regularly.
Too Close for Comfort
My boss was liberal for a civil servant. Even though he spoke to me in Japanese I assumed that he could communicate in English as well. He was very kind, generously topping up my salary on occasion. A Japanese woman in her thirties who was married to an American sat at the desk next to mine. She also assisted the representative collecting statistics and recording news from American trade journals. We received Japanese trade magazines and newspapers which reported blow-by-blow the consequences of the bursting of the bubble and the continuing political turmoil.
I attended several exhibitions of luxury yachts with him. My responsibilities were minimal perhaps because my boss would return to Japan at the end of March, which was disappointing. His replacement was said to be an officer representing the Ship Building Industry.
JETRO management exacerbated a latent xenophobia among the officers by releasing news bulletins about crimes perpetrated against Japanese tourists throughout the United States. The officers were continuously cautioned about racism, drugs and the proliferation of gun-related crimes in the United States. Consequently, the officers were always anxious about living in a country where they could be the victims of violent crime and tended not to stray too far from the office except on holiday with their families or on business trips. My boss also released a bulletin around the office claiming that on his way to JETRO he was chased by youths who taunted him with racially abusive language.
I had intended to remain at JETRO until I found a better position but when the officer who would replace my boss visited the office for a week in March for orientation I realized that I would have to leave. Although only in his mid-thirties, he reminded me of a lieutenant in a Japanese prisoner-of-war camp. The Japanese assistant had the same impression. However, she preferred to remain in her position because she had previously assisted several ship building officials and was accustomed to the work.
I asked my boss if I could transfer to another office after he left. He told me that it would be difficult because a transfer of local staff to another representative office was rare. I assumed that he was intimating “transfer of information” and “loyalty.” But since I had been with Ship Machinery for only a few months and since the current representative from Kyoto Prefectural Government was due to return to Kyoto and his American assistant would also exit JETRO thus leaving a space, he promised to urge the Managing Director to allow the transfer.
The American assistants tended to leave JETRO at the same time as their directors. During their term their bosses would take them for lunch, offer gifts and even send them to Japan for holidays as incentives. It may have been that they were not entirely trusted to maintain confidentiality about their bosses’ activities and might release some information to their bosses’ successors who were seconded by the same organization. On the other hand, the assistants may have become attached to their bosses and because they had college degrees decided to either go to graduate school or find another job. Nevertheless, the Japanese local staff continued working for successive representatives.
I was pleased with the prospect of working for a representative of a prefecture government, especially Kyoto, a cultural Mecca and one of the most sophisticated of the prefectures with traditional businesses, some established in the seventeenth century, and multi-national corporations such as Nintendo, Kyocera Corporation, Omron and Wacoal, the woman’s lingerie manufacturer.
I first spotted the future Kyoto Prefectural Government Representative when he visited JETRO in March for a week of orientation with the outgoing Kyoto representative. A short, plump gentleman marched quickly down the corridor while nervously staring straight ahead. He appeared daily during the week before returning to Kyoto. I was relieved when the ship machinery representatives confirmed that I could transfer to the Kyoto office which was located in the expanded section of JETRO. According to the Ship Building assistant, the outgoing Kyoto officer was high-strung and irritable.
JETRO held a small farewell party for my boss which other officers and their Japanese assistants attended. I became better acquainted with them and more relaxed about wandering around the forty-fourth floor to see where the other representatives worked.
The Japanese assistants congregated in a small tea room where I joined them during the interlude between my boss’s departure and the arrival of the new Kyoto representative. Some had married American GIs or English teachers in Japan. Their spouses married in order to alleviate the loneliness, difficulties with the language and to try to assimilate into Japanese society. Their wives took care of their physical and emotional needs.
The Japanese women married Americans to escape the strictures of their regulated society for a freer lifestyle. But when their husbands returned to the United States, they were no longer dependent on their wives. Some of the marriages deteriorated, ending in separation or divorce. Although the women had received Green Cards they had difficulty functioning independently in American society.
Their education was no higher than high school or junior college. Although their English was satisfactory for daily life it was not sufficient for working in American companies. The women preferred working in a Japanese organization with other Japanese women for emotional support. Their skills were applicable for the undemanding work at JETRO but they were caught in an ambiguous existence because by marrying foreigners they were no longer accepted fully in Japanese society and were reluctant to return home. They were permanent ex-pats.
The secretary for the two executive officers, was a stylish Japanese woman in her mid-fifties, and sat at a desk in front of their offices. She considered herself in a different strata and rarely associated with the other assistants. Fluent in English, she had resided in the US for many years and, before moving to JETRO, had worked for a branch of a Japanese travel agency. She was very protective of her two bosses.
Taking a Wander
As a rule, the assistants remained at their desks while their bosses were present at JETRO but more often than not they were on their own and would visit each other to chat. Since the director of Ship Machinery was preparing to relocate his family to Japan I took advantage of his absence to explore the rest of the forty-fourth floor. Their Japanese assistants informed me about their bosses’ activities which provided a fundamental understanding of JETRO’s functions.
JETRO New York was the largest JETRO USA office and reflected the structure and management of the other branch offices located overseas. However, this office was highly unusual because it housed a microcosm of around forty officials sent to JETRO by government agencies, prefectural governments and industrial associations, which in Japan were separate entities and which rarely interacted.
Ensconced in the New York office during the 1990s before the merger of some of the ministries in 2001 were officials from MITI’s corporations such as officers from EID/MITI, EXIM’s Import and Investment Insurance Department.
The prefectural governments represented at JETRO New York included Kyoto, Osaka and Ehime. The public corporations of other ministries such as the Japan Highway Corporation (Ministry of Construction) and prefectural governments which were not attached to MITI were required to pay JETRO substantial fees for office space and secretarial support, which helped JETRO pay the rent as well as justify its budget. Regardless, these officers were expected to cooperate with MITI in research projects and promotional events that were unrelated to their responsibilities for their respective agencies.
The offices were managed by JETRO staff posted from Japan for three years while MITI managed operational budgets. JETRO staff cared for the needs of all representatives, including facilitating visas for the agents, applying for social security, health insurance, and procuring local staff to assist the officials with research and administration.
A partial wall separated these offices from the large Reference Library where business owners visited to collect information regarding market information and doing business in Japan. The central desk was manned full-time by a female in her mid-fifties who had emigrated from the Philippines and who had been working at JETRO for about seven years. She was friends with the receptionist. The two desks on either side of her were occupied by a Japanese male who was about to retire and a young Australian female.
A separate room was next to the library for the JETRO Trade Promotion Division where JETRO staff seconded from Tokyo were posted for three years to promote JETRO as the government funded organization that assisted American small businesses to enter the Japanese market and coach them on doing business in Japan. The Executive Director was a JETRO officer who was a graduate of Tokyo University in Agriculture. He had established the Business Support Centers in Tokyo and Yokohama. Similar to the Executive Director of Research and Planning he was considered high on the totem pole at JETRO New York.
All of the officers, including MITI officials, were regarded as JETRO staff. As an example, an officer posted from the Ehime government identified himself first as a JETRO staff. Most of the officers’ previous careers were unrelated to their work at JETRO New York and they had received little preparation regarding their future work before leaving Japan.
The requests from their home offices to investigate trade regulations, laws, current government policies, environmental issues and industrial standards were forwarded to consulting companies, some of which had been on contracts that had continued for years from director to director without any regard for the quality of the work. Other duties included guiding delegations of Japanese businessmen on tours of US regions, arranging meetings with American businessmen and government officials and entertaining Japanese government officials during their visits to the US.
The Best of Both Worlds
Transferring to the Kyoto Prefectural Government Office not only afforded me more time to search for a job with a higher income but, also, I recognized that I would never again have the opportunity to observe closely Japanese civil servants from numerous ministries and local governments. I was addicted to daily news reports and media commentaries and the Japanese media was having a field day covering scandal after political scandal. The economy was in recession.
In 1989 LDP politician Sasuke Uno succeeded Noburo Takeshita as Prime Minister but resigned within three months after taking office due to a sex scandal involving his relationship with a geisha. Uno’s successor was Toshiki Kaifu, another LDP politician (1989–91). Ironically, in November 1991, two months before I entered JETRO, Kiichi Miyazawa who had been implicated in the Recruit Scandal became Prime Minister.
However, the struggle for power among factions in the LDP and the need for action to ignite Japan’s flagging economy destabilized the political system. Some government members, wanting to distance themselves from scandal and attempt to initiate political reform, defected to form new parties. Morihiro Hosokawa, the former governor of Kumamoto Prefecture, founded the reformist New Japan Party with Hiroshi Kumagai, a former MITI official who had left MITI in mid-career to enter politics on the LDP ticket. Former Prime Minister Yoshihiko Noda (2011-2013) was also a member. The party joined forces with the Japan Renewal Party, which was founded by another LDP political kingpin Ichiro Ozawa, and Tsutomu Hata.
During my brief period at JETRO five Japanese newspapers and magazines were delivered daily to the directors and I kept up-to-date on all issues in Japan. My PC‘s software programs were identical to Mercian’s so I was in my comfort zone and in the best of both worlds; Japan and Manhattan.