Manufacturing Policies in Japan and Canada - Essay Example

Running Head: MANUFACTURING POLICIES IN JAPAN AND CANADA Manufacturing Policies in Japan and Canada Name Tutor Date Manufacturing Policies in Japan and Canada Introduction Policies are made to ensure that a particular goal is achieved as per the directions or guidelines of their respective policies. Policies are also made to protect various parties concerned. Therefore, industry policies are made to protect or cushion players of the industrial sector. Each and every country has its own policies as far as manufacturing is concerned. However, it may not be a wonder to find some policies that are similar in different countries. In this essay I intend to pay attention particularly to the manufacturing policies in Japan and Canada. The essay will look at each of them in details and compare the two. The main objective behind all this will be to know which particular industrial policy is better. Industry policy in Japan In Japan, each and every branch of manufacturing industries is dealt with by its own different laws. There are very clear laws set for the chemical manufacturers of chemicals, machinery industries, information industries and consumer goods and services industries. The Machinery Credit Insurance Law lays down credit insurance which plays part in the reformation and upgrading of equipment by small and medium sized companies and encouragement of the machinery and programming industries (Masahiro, 2008). The Small Business Credit Insurance Corporation runs the insurance and pays off fifty percent of nonpayment caused by leasing of specific machinery. There is also a law banning the production of anti-personnel mines. It lays down actions required to do away with its production (Storz, 2007). In order to prevent the environmental pollution caused by persistent and potentially harmful chemical substances, there is a law concerning Examination and Regulation of Manufacture, etc. of Chemical Substances. It states that chemical substances shall be examined, before they are manufactured or imported, so as to determine whether they could have properties such as persistence (Samuel, 2008). The law also implements essential parameters as per the properties of chemicals. The law in regard to the Protection of the Ozone Layer is the Regulation of Specified Substances among other preventive steps. It controls the production and consumption of specific substances such as chlorofluorocarbons, and promotes the validation of their use. This is so as to protect the Ozone layer through international cooperation and to enforce the Montreal Protocol. There is also the law on the Prohibition of Chemical Weapons and the Regulation of Specific Chemicals. It oversees the production, possession and transfer of chemical weapons, and the manufacture and the use of chemicals that can be easily transformed into materials for chemical weapons. On the other hand, there is the Alcohol Monopoly Law. It provides for the joint management of the production, storage, sales and imports of the ethanol for industrial use. The Alcohol Monopoly Special Account Law provides for the establishment and the operation of the special account and in so doing introduces the business oriented operation of the monopoly system of ethanol for industrial use. There is also another law concerning the Implementation of the Convention on the Prohibition of the Development, Production and Stockpiling of Bacteriological Biological and Toxin Weapons and on their Destruction (Masahiro, 2008). Manufacturing Policy in Canada Canada came up with tariffs on the import of most manufacturing goods. At the same time, the tariffs on raw materials were lowered also to help manufacturers. The state was relying so much on revenue from customs since the issue of income tax had not yet been introduced. This was mainly due to the fact that it was feared that would hurt immigration at a time when Canada was not attracting many immigrants. Thus, they foresaw that too high a tariff would have definitely cut off almost all imports, and as a result deprive the government of revenue (Fowke, 1999). This policy would definitely broaden the foundation of the Canadian economy and bring back the confidence of Canadians in the growth of their country. The tariff on majority of the foreign manufactured goods was hiked, therefore affording significant protection to Canadian manufacturers. Equally important to the manufacturers was the fact that custom duties were the reduced on the essential raw materials and semi-processed products, therefore lowering their cost of production (Fowke, 2002). The Canadian National Policy can be described as one that is mixed when assessing it. Generally, it is argued that it increased prices and lowered Canada's efficiency and ability to compete in the world. The decision by the Canadian government not to be part of the American structure resulted into formation of many small companies that later became monopolized. There was also hiking of the prices rendering the small companies inefficient. The effect was not felt at greater levels due to the fact that the policies could only be applicable to the manufacturing industries only and in comparison to other sectors it did not play a huge part. (Fowke, 2006). However, some perceive this as an advantage since Canada could now act on its own independent of the United States in regard to its economical growth. Furthermore sometime after the policy came into force, there was some sizeable economic growth similar to other countries. This in one way or the other justifies the introduction of the policy. But on the other hand, Canada also suffered a net population outflow. A lot of people migrated from Canada into other nations, mainly the United States. According to Eden and Molot (1993) there have been three national policies in Canada: the "National Policy" of defensive expansionism, 1867-1940; compensatory liberalism, 1941-81; and market liberalism, starting in 1982. This first stage was dependent on the tariff, the construction of rail system and settlement of the land to grow the country’s economy. The compensatory liberalism uses the GATT structure, Keynesian macroeconomic system together with the domestic social welfare. The present policy depends on the free trade between the US and Canada. It equally relies on the NAFTA free trade. (Fowke, 2006). Comparison The manufacturing policy in Canada mainly deals with tariffs. The state came up with tariffs concerning foreign goods. The rates on materials used when manufacturing were lowered as a bonus to the players of this sector. (Robert, 2008). This was mainly due to the fact that it was feared that would hurt immigration at a time when Canada was not attracting many immigrants. Thus, they foresaw that too high a tariff would have definitely cut off almost all imports, and as a result deprive the government of revenue. This national policy would definitely broaden the foundation of the Canadian economy and bring back the confidence of Canadians in the growth of their country (Samuel, 2008). The tariff on majority of the foreign manufactured goods was hiked, therefore affording significant protection to Canadian manufacturers. Equally important to the manufacturers was the fact that custom duties were the reduced on the essential raw materials and semi-processed products, therefore lowering their cost of production (Eden, 2003). One would be definitely be in order to suggest that industrial policies in Canada are mainly concerned with the welfare of the industrial players as well as the state. Some people, mainly economists, argue that a fourth policy called "strategic integration" may emerge. According to them, the policy would consist of free trade, both external and internal; the building of a national telecommunications infrastructure based on the development and diffusion of information technologies; and human capital development. The free trade would definitely be a bonus and a big boost to the industrial players (Barber, 2005). 0n the other side is the Japanese manufacturing policies. Its manufacturing policies are not joined. This means that each and every branch of the manufacturing industries is catered for by its own laws. There are very clear laws set for the chemical manufacturers of chemicals, machinery industries, information industries and consumer goods and services industries. The Machinery Credit Insurance Law lays down credit insurance which plays part in the reformation and upgrading of equipment by small and medium sized companies and encouragement of the machinery and programming industries (Masahiro, 2008). Similarly, there is the Law on the Prohibition of the Manufacture of Anti-Personnel Mines and Regulation of the Possession of Anti-Personnel Mines. So as to prevent pollution resulting from dangerous chemical materials, a law has been put in place to deal with this. The Japanese policies are mainly meant to help the state as a whole (Robert, 2008). In my opinion, the Canadian industrial policies are better since they intend to benefit the industrial players first and this includes the local citizen (Eden, 2003). Conclusion There is no way that any project can be run without policies being made first on how to run it. Equally, manufacturing industries do have their own policies that ensure their smooth running. Japan has got its own policies so does Canada. Whereas the policies of Canada are more focused on the welfare of the people and the state, those of Japan are more focused with the conservation of environment. But all the same, they are both meant to meet certain targets. References Barber, L. (2005). "Canadian Tariff Policy" in Canadian Journal of Economics and Political Science, Vol. 21, No. 4. Eden, L. (2003). "Canada's National Policies: Reflections on 125 Years" Canadian Public Policy 1993. Vol. 19/3. Fowke, V. (1999). The National Policy and the Wheat Economy. Toronto: Sage. Fowke, V. (2002). "The National Policy-Old and New" Canadian Journal of Economics and Political Science, Vol. 18/3. Fowke, C. (2006). National Policy and Western Development in North America" Journal of Economic History, Vol. 16/4. Kelly, M. (2008). Issues and developments in international trade policy. Tokyo: International Monetary Fund. Masahiro, O. (2008). Industrial policy of Japan. California: Academic Press. Robert, J. (2008). International Economics. New Hampshire: Cengage Learning. Samuel, F. (2008). Japan echo, Volume 35. Indiana: Indiana University. Storz, C. (2007). Small firms and innovation policy in Japan. Hiroshima: Sage. Read More