U.S.-Japan arms trade spawns new company

Nissho-Iwai, one of the largest Japanese trading companies, is planning to set up a U.S. subsidiary to handle the increasing volume of military and aerospace-related trade between the U.S and Japan.

The subsidiary, to be known as Nissho-Iwai Aerospace, America, will be specifically designed to handle the export of Japanese computer and laser innovations to the U.S. for military purposes. The subsidiary expects $40 million in sales in five years. Nissho-lwai is also hoping to participate in joint weapons development with U.S. companies.

Until recently, Japan had banned exports of military material, and imports had been limited by the country's constitutional ban on offensive weaponry. But the recent accession of ultra-conservative prime minister Nakasone Yasuhiro has raised the possibility for a large increase in military purchases by the Japanese government, exports of military hardware, and linkups between Japanese and American defense firms.

In a related development, Kyocera Corporation, Japan's top manufacturer of integrated circuit ceramic packages, was forced to sell one of its U.S. subsidiaries by the U.S. Department of Defense. The sale was ordered under a new law aimed at protecting national security secrets in foreign-affiliated companies in the U.S.

Kyocera's unit, Dexcel, Inc. was based in Santa Clara, California and produced semiconductors and other high technology items for space and aeronautics industries in the U.S. In addition to selling the unit to its U.S partner - Gould, Inc. of Rolling Meadows, Illinois - the company's Japanese management was replaced by Americans at the request of the Pentagon.

The Kyocera sale was the first time the U.S. law has been invoked.

Sources: Japan Economic Journal, 2/8/83; 3/1/83

Nestle boycott targets "Taster's Choice"

A new boycott targeting Nestle's Taster's Choice coffee has been launched by the Infant Formula Action Coalition (INFACT) in an effort to force the Swiss-based multinational to comply with international standards for infant formula marketing.

In announcing the boycott on March 1st, INFACT released a list of over 60 recent violations by Nestle of the World Health Organization/UNICEF International Code of Marketing of Breast Milk Substitutes. The company had agreed last year to comply with the code.

"Research from the field has demonstrated that Nestle has not implemented the WHO/UNICEF code, and that its marketing practices continue to threaten the lives of infants," said Douglas Johnson, national chairperson

Taster's Choice is Nestle's best selling product in the U.S., representing 18% of its domestic profits.

- Jeff Bentoff

Guinea asks for foreign investment

President Ahmed Sekou Toure of Guinea - the West African state which was entirely closed to corporate investment from the 1960s through the mid-1970s - has been trying to attract multinational corporations to his country.

During a visit to the U.S. last summer, Toure made a bid for foreign investment to officials of 80 companies at an investment seminar arranged by Chase Manhattan's David Rockefeller. Rockefeller also visited Guinea last year.

According to the African Economic Digest, Toure told the businessmen in New York, "Your creative genius.. .your pragmatic approach, your open-mindedness, and your understanding, combined with our ability to give you highly profitable investment outlets, constitute the major reasons that lead us to come here."

The United Nations lists Guinea as one of the 28 poorest countries in the world. Currently, two U.S companies - Union Texas and U.S. Steel - are operating in Guinea.

- Louis Spiegler

Firestone cuts back in Liberia

After nearly 60 years of operation at the Cavealla rubber plantation in Liberia, Firestone Robber Company pulled out January 31 because the facility was no longer profitable. Firestone officials said the Liberian government was to pick up the plantation's operations immediately after the company's departure.

According to African Economic Digest, Liberia is seeking another foreign buyer for the plantation - without which the plantation could close, causing some 1,700 Liberians to lose their jobs. But depressed rubber prices in the world market make it less than attractive for most investors.

Liberia's rubber plantation production has been dropping since 1974. Output in that year totaled 74,000 tons, while exports were 66,500 tons in 1981. They were expected to be even lower in 1982.

Source: Africa News, 2/21/83

Regional banks cut back on loans to Brazil

A number of small, regional banks have drastically cut back on their loans to Brazil, forcing the major banks to put up about $1.3 billion a day to make up for the shortfall, according to the Washington Post (2/23/83).

Among the banks pulling their cash out of Brazil are Riggs National Bank, First Minneapolis, National Bank of Detroit, National City Bank of Cleveland, First Interstate of Los Angeles, and Rainier Bank in the Pacific Northwest.

Bankers warned that the small banks' pullout could force a crisis in the Brazilian banking system. "If that happens, it won't be Brazil's fault. It will be the fault of the international financial system," a banker told the Post.

- Louis Spiegler