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Japanese Want to Sell to Israel, but Are Afraid to Break Boycott

March 9, 1988
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Japanese manufacturers, especially the automakers, want to sell to Israel, but neither the government nor any leading company is willing to openly buck the Arab boycott, according to a Tokyo business magazine.

In an article called “Under the Arab Thumb,” the March issue of the English-language publication Business Tokyo notes that unlike the United States and West European countries, Japan has not passed any legislation to bar compliance with the boycotts.

“Many leading U.S. and European countries called the Arab bluff by continuing to trade openly with Israel,” the magazine points out. “They have not, in most cases, suffered because of the decision. Japanese companies, however, have not even tried.” The magazine says the companies justify this policy by pointing to the problems Japan experienced during the 1973 oil crisis. Japan is nearly 100 percent dependent on Arab oil, and if it was cut off, its economy could be destroyed.

“This, apparently, is ample justification to the Japanese mind to allow them to boycott trade with Israel,” Business Tokyo observes.

Japanese companies do buy Israeli products, particularly diamonds, with Israeli diamonds making up 25 percent of Japan’s diamond imports, according to the magazine.

The article noted that the situation is changing, particulary in the auto industry, where research has shown that Israel could be an important market for Japanese cars. Fuji Heavy Industries Lt, the only Japanese carmaker that exports openly to Israel, sold 20,000 Subaru cars in Israel in 1987.


The article goes on to point out that while Arab countries are a good market for the larger Japanese cars, the Israeli demand is for smaller cars. “The Japanese, who excel in small-car production, are eyeing the market hungrily,” according to the magazine.

The magazine points out that Daihatsu and Suzuki have sold about 2,000 cars annually in Israel, imported through a third country, and the Mitsubishi Corp. is planning to do the same thing.

“Directly or indirectly, it appears that Japanese cars will soon be readily available in Israel,” the magazine notes.

“It would be nice to be able to say that Japanese manufacturers have finally decided to stand up and be counted; that they will no longer be willing to bow to Arab blackmail.”

But, the magazine stresses, the reason is economic. Japanese automakers have been losing their share of the international market, because the rapid rise of the yen over the last two years has forced them to increase their prices.

“This, combined with the drop in oil prices, which has reduced the buying power of Arab nations, has made it inevitable that they open up new markets,” according to the article.

The Japanese automakers thus “see Israel as a small, but relatively profitable market,” the article concludes. “The only problem is not upsetting the Arabs.

“If they succeed, Japan’s carmakers will be first in the world to develop a method of having their cake and eating it. They want to sell in Israel, but neither the manufacturers nor the government seem willing to stand up to the boycott threats and do it openly.”

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