American builders and retailers will get the first boosts from Japan's promise to make it easier for foreigners to do business in the thriving industrial country, economists said Friday.
A sweeping trade agreement between the United States and Japan announced Thursday marks a shift in Japan's basic trade policies and is designed to reduce the barriers that contributed to a $49 billion U.S. trade deficit last year.While effects of the multipoint agreement are not expected to be noticeable for some time, the economists said U.S. engineering and construction companies should benefit in the near future from provisions that will allow them to compete for massive public works projects in Japan.
Japan's rapid growth is fast outstripping its infrastructure, and the country is in dire need of new roadways, airports, harbors and other major public works, said Robert Gay, senior economist at Morgan Stanley & Co.
"Engineering and construction companies are likely to be long-term beneficiaries," he said.
Investors also took note of the new opportunities for these types of companies, and the stock of many shot up during trading Friday.
The accord also snips away some of the red tape that made it all but impossible for foreign retailers to enter the coveted Japanese market.
Japan said it would shorten the process by which merchants are granted permission to operate in the country and ensured that any delays would not last more than a year. The efforts of some foreign retailers, whose plans were waylaid by independent Japanese retailers, had previously been blocked for up to 10 years.