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Textbook Site for:
Principles of Macroeconomics, Third Edition
John B. Taylor, Stanford University
Internet Exercises
Chapter 18: International Trade Policy


Aftermarket Auto Parts

Questions:

Skim through the following articles on the disagreements between the U.S. and Japan concerning aftermarket parts. The dispute centers, in large part, on the Japanese government's requirement that repairs on "critical systems" such as braking systems, must be made by a certified mechanic at a certified garage.
U.S.-Japan Automotive Agreement Implementation Report Criteria and Data: Aftermarket Parts
A discussion of the U.S. perspective on the portion of the U.S. Automotive Agreement dealing with the aftermarket parts market. (Note: MOT = Japan's Ministry of Transport; GOJ - Government of Japan).
On the U.S.-Japan Automotive Negotiations
Read through this document to see Japan's response to the U.S. requests concerning the aftermarket parts dispute.

  1. Summarize the U.S. arguments.
  2. Summarize the arguments of the Japanese government.
  3. Would consumers benefit from the removal of brake systems from the "critical parts" list? Explain.


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