Resale price maintenance occurs when manufacturers control the prices charged by wholesalers or retailers of their products. In Japan, such activities are prohibited, although certain exemptions are allowed. The U.S. concern over the practice is that it could allow Japanese firms to generate a secure profit base in their home market in order to finance aggressive price competition abroad.
American companies are facing increased competitive pressures from foreign firms. Many observers feel that U.S. firms lag behind their foreign competitors in the development, application, and marketing of new technologies and techniques. The Japanese industrial enterprise is characterized by a large proportion of private sector financing and many other factors, which this report analyzes at length. The question being debated by Congress is whether or not U.S. government programs and policies are an acceptable and effective means of supporting the efforts of American industries to operate in a manner consistent with success in world markets.