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Manufacturing is still critical to the economy United States. Clyde Prestowitz, says it's time to start realizing the positive spillovers that manufacturing creates... Read more  

Events & Activities

Stephen Olson at Chinese Development Institute Conference


 Clyde Prestowitz giving presentation to CDI...


Steve Olson teaching trade negotiations at the Mekong Institute...


Stephen Olson to speak at upcoming workshop organized by the International Institute for Trade and Development on 

"Economics of GMS Agricultural trade in goods and services towards the world market"

Chiangmai, Thailand Sep 8-12.

(02/02/05) Clyde Prestowitz and Robert Cohen in Financial Times

Clyde Prestowitz and Robert Cohen in Financial Times (02/02/05)
Financial Times, Copyright 2005 Financial Times Ltd.
February 2, 2005
LETTERS TO THE EDITOR: Give us a liberalisation without cross-subsidies

From Mr Clyde Prestowitz and Mr Robert B. Cohen.

Sir, While correctly noting that the "real issue is money", youreditorial "Koizumi's challenge" (January 27) misses the realpoint about Japan's Post Office privatisation. Far from liberalising theinsurance market, the present plan will tilt the tables in favour of the newprivatised entities and against real private insurers. After privatisation,Kampo, the Post Office's insurance arm, will continue to control 40 percent of Japan's life insurance assets and 30 per cent of its individualsavings deposits without any rules against cross-subsidising its three newsiblings.

The European press, especially, should appreciate the shortcomings ofliberalisation where the government still keeps its finger in the pie. TheDeutsche Post liberalisation includes many of the problems Junichiro Koizumi,Japan's prime minister, has failed to address.

Among these are failure to limit business diversification based oncross-subsidisation from ongoing monopoly or quasi-monopoly activities. Suchfunds facilitated Deutsche Post's acquisition of DHL and AirborneExpress and enabled practices that have resulted in large fines levied by theEuropean Commission for anti-competitive activity.

Rather than applaud Mr Koizumi, you should insist on a liberalisation thatremoves significant subsidies and special treatment for the"privatised" Post Office. Clyde Prestowitz, President Robert B.Cohen, Fellow Economic Strategy Institute, Washington, DC 20007, US

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