Peer reviewed analysis from world leading experts

The West’s protectionist past and Chinalco-Rio Tinto

Reading Time: 2 mins

In Brief

When I heard about the Stern Hu story a few months ago, it reminded me of three salient cases of similar interventionist policy in Australia and Japan, as well as in the United States in the 1960s.

Before the 1960s, when the Australian Government did not allow the export of Australian coal, iron ore and other mineral resources to Japan, despite rising demand during Japan’s rapid industrialisation, those with a firm belief in the critical importance of free trade for continuing world economic growth protested together with Australian mining companies to change the official export-ban policy. Eventually, those protesting against the ban were successful.


  • A
  • A
  • A


  • A
  • A
  • A

By the same token, when the Japanese government (through the Ministry of International Trade and Industry MITI) intervened in the negotiation of patent contract and royalty fees and joint venture investment projects between foreign and Japanese firms, as well as in the application for approval of wholly owned subsidiaries, us promoters of free trade and investment in Japan and overseas criticised the Japanese government’s interventionist policy. We had modest success in the late 1960s, but greater success later in convincing MITI to abandon its interventionist policy after Nixon’s New Economic Policy (the so-called ‘Nixon Shock’) was announced in 1971.

The U.S. government, long before facing a huge and increasing trade account deficit vis-à-vis Japan in the late 1960s, pressured the Japanese government to adopt a policy of ‘Voluntary Export Restraint’ (VER) in the textile trade in the early 1960s, then steel utensils, colour TV tubes and steel in the late 1960s and finally automobiles, milling machines and computer chips in the 1970s. This was all, again, marketed as protecting US national interests through the protection of the specific domestic industries losing their competitiveness in the international market.

Again promoters of free trade in Japan protested to the American government about their interventionist policy, and were later joined by overseas protesters when the U.S. government extended their bilateral agreement to a multilateral level in the form of the Multilateral Fibre Agreement in the 1970s. The MFA stayed in effect until a few years ago.

When a Japanese company tried to buy a commercial wing of a famous American defence weapon manufacturing firm, the American government stepped in to stop the negotiations between the two firms, and yet approved its takeover by a French company later. We protested the discriminatory policy and practice of the U.S. government.

These are the realities of the international trade and investment policies and practices of major countries of the West. Now we are facing a similarly interventionist policy by China. This should be cause for concern, but not despair. We have faced similar problems and overcome them, to the benefit of all involved. We should look into our own past interventionist policies and practices and how we eventually settled them. Let’s hope that good sense prevails in the current fracas with China.

Ryokichi Hirono is Emeritus Professor at Seikei University and has served on numerous advisory committees of the Japanese government.

One response to “The West’s protectionist past and Chinalco-Rio Tinto”

  1. The West, especially the US, were hypocritical in what they advocated “free” trade. They asked other countries to open their markets, but when they could not compete with others they devise various disgraceful schemes to protect their markets and industries. It was a display of power politics/economics. It was appalling.

    I am not sure the last paragraph correctly describes the situation of the Stern Hu case with China. That case appears to be very different from the other interventions on trade.

Support Quality Analysis

The East Asia Forum office is based in Australia and EAF acknowledges the First Peoples of this land — in Canberra the Ngunnawal and Ngambri people — and recognises their continuous connection to culture, community and Country.

Article printed from East Asia Forum (

Copyright ©2024 East Asia Forum. All rights reserved.