Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, April 6, 1990 TAG: 9004060216
SECTION: NATIONAL/INTERNATIONAL PAGE: A1 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Long
The agreement, reached after four days of marathon discussions, set forth a complex set of proposals aimed at lowering America's huge $49 billion deficit with Japan by attacking structural barriers to trade.
Under Secretary of State Richard McCormack, the leader of the U.S. negotiating team, said the talks had produced "substantive progress" in resolving trade differences between the two economic superpowers.
A White House statement praised the agreement as "an important way station along the road leading to a strengthened U.S.-Japan relationship."
Japanese officials said Prime Minister Toshiki Kaifu was preparing to brief his Cabinet this morning on the negotiations.
The talks were unprecedented in their scope because they aimed not at boosting sales for specific foreign products but at correcting broad barriers to trade in both countries.
For the first time, representatives of sovereign states drew up detailed lists of the economic shortcomings in the other nation and demanded changes.
Japanese critics of the effort complained the United States was trying to scrap centuries of Japanese tradition and remake the country into the image of the United States.
The Bush administration insisted that its recommendations would benefit Japan by increasing competition in a country where consumers now pay some of the highest prices in the industrial world.
The Japanese had their own list of complaints against the United States, citing America's huge budget deficit, low savings rate and short-term planning by U.S. companies as restraints on U.S. productivity.
The administration chose not to accept the most politically sensitive Japanese recommendations to limit Americans' use of credit cards, boost gasoline taxes and scrap tax deductions for home mortgages.
Instead, the administration, according to officials, pledged to increase efforts to improve America's education system and pointed to proposals the administration is already pushing to cut the federal budget deficit and to provide tax credits for increased personal savings.
Officials, who spoke on condition that they not be named, said the Japanese made the following pledges in the agreement:
To deregulate Japan's complex goods-distribution system, including a gradual relaxation of restrictions on the establishment of large retail stores. Such a move would allow U.S. and other foreign retailers to open outlets in Japan.
To increase enforcement of antitrust laws with tougher penalties to discourage bid-rigging and other collusive practices by Japanese corporations.
To boost government spending on public works projects, thus expanding the volume of work on which American firms could bid.
The talks on broad barriers to trade, known as the Structural Impediments Initiative, were launched by the administration in July. Until this week, they had made little headway.
But Kaifu, seeking to lessen growing anti-Japanese sentiment in Congress, promised Bush at a summit meeting in early March that he would make lowering trade tensions a top priority for his government.
Sen. Max Baucus, D-Mont. and chairman of a Senate trade subcommittee, said he was impressed with the newfound willingness by the Japanese to make concessions but he and other members of Congress said it was critical for the Japanese words to be followed by action.
"I am encouraged that some first steps have been taken on the Structural Impediments Initiative. But these are only first steps," Baucus said. "Much remains to be done."
Sen. John Danforth, R-Mo., said he was concerned because there was no enforcement mechanism to make sure Japan lives up to its commitments. "In any commercial agreement with Japan, seeing is believing," he said.
Senate Finance Committee Chairman Sen. Lloyd Bentsen, D-Texas, said he was not yet convinced that Japan was willing to "put an end to its longstanding protectionist practices."
"Put me down as a skeptic who has seen too many agreements in which the results didn't match the rhetoric," he said in a statement. "U.S.-Japan trade agreements - and we had a lot of them throughout the 1980s - were like nothing so much as a drugstore cowboy: all hat and no cattle."
Since the Bush-Kaifu meeting, there has been a flurry of activity in trade negotiations. Agreement were announced in the last two weeks to expand the opportunity for sales of American-made telecommunications equipment, satellites and supercomputers in Japan.
Some saw the concessions as an attempt by Japan to keep from being put on a "hit list" of the countries with the worst barriers to trade for the second year in a row. The administration faces a congressional deadline of April 30 for releasing a new list of target countries.
Such a designation opens the possibility of tough sanctions being imposed against the offending nation's imports to the United States if the barriers are not removed.
Japanese barriers to sales of satellites, supercomputers and wood products were cited by the administration a year ago. With the agreements on satellites and supercomputers, only the dispute over lumber remains to be resolved.
The lumber issue will be taken up in negotiations next week in Tokyo and special emissaries who met with Bush on Wednesday told the president that the Japanese would present a new set of proposals in this area in an effort to meet American demands.
by CNB