Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, April 6, 1990 TAG: 9004061110
SECTION: NATIONAL/INTERNATIONAL PAGE: A1 EDITION: EVENING
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Long
The Bush administration hailed the accord reached Thursday as a landmark agreement marking a new era in relations between the world's two largest economies, but congressional skeptics questioned whether the Japanese would live up to their part of the bargain.
"We think we have a good blueprint for action and we got a good downpayment," said U.S. Trade Representative Carla Hills. "Obviously, we want results and if they don't occur we would be disappointed."
Hills' remarks to reporters at a briefing session was in response to skeptical comments which greeted the document in Congress. Many members said Japan had made broad promises before to open its markets to foreign products but had failed to live up to the agreements.
Hills said the administration would be pushing for significant follow-up to Thursday's accord, in which Japan promised to take a series of measures to make it easier for foreigners to invest and do business in Japan.
She said both nations still had to come to terms on a final report due in July and that even after that document was finished she would consult frequently with the Japanese to monitor their progress in implementing the commitments.
In Tokyo today, Prime Minister Toshiki Kaifu warned his nation that the coming economic changes could "in some cases be painful," but he promised they would lead to an improved quality of life for the Japanese people.
"I ask for the understanding and cooperation of the people of my country," Kaifu said in a televised appearance.
The unprecedented agreement followed four days of marathon bargaining in Washington. The talks, known as the Structural Impediments Initiative, were devised by the administration last July as a way to attack the underlying cultural reasons for America's $49 billion trade deficit with Japan.
For the first time, representatives of sovereign states set about reviewing each other's economic failings and making suggestions for changes.
From the lengthy lists supplied, both governments drafted a set of commitments that they would be willing to make.
The Japanese proposals, if implemented, would be much more far-reaching in their impact than the U.S. proposals, which essentially recycled past administrative initiatives, including the Bush plan to cut the capital gains tax as a way of boosting investment.
But members of Congress said they remained to be convinced that the Japanese were serious about making the changes needed to open their markets to more foreign goods.
"Put me down as a skeptic who has seen too many Japanese agreements in which the results didn't match the rhetoric," said Sen. Lloyd Bentsen, D-Texas, chairman of the Senate Finance Committee.
"In any commercial agreement with Japan, seeing is believing," said Sen. John Danforth, R-Mo.
In its 22-page list of promises, the administration said it would work to balance the federal budget, improve the U.S. educational system and boost incentives for personal savings - all in the name of bolstering America's international competitiveness.
Tokyo's 32-page list of promises, which turned out to be more comprehensive than many critics had expected, pledged to alter the closed-door policies Japanese businesses have long employed to keep out foreign competition.
In many ways, the Japanese list of proposals sounds like a blueprint for transforming a work-obsessed, thrifty country into a nation more like America - with more leisure time, expanded options to buy consumer goods at lower prices and more access to charge cards.
Administration officials said that while Americans have developed an inferiority complex over Japan's economic prowess, they too often forget the high price Japanese consumers have had to pay for their nation's trade superiority.
"It has resulted in a standard of living that the American people wouldn't trade for," said Undersecretary of State Richard McCormack, the head of the U.S. delegation. "We live far better, we have far better houses, we have far better access to products that are much cheaper."
\ Nations' trade promises\ Japan
Stiffen penalties for antitrust violations by Japanese companies, including bid-rigging and other collusive practices.
Deregulate the nation's complex distribution system, including relaxation of restrictions on opening large retail stores.
Increase government spending to build and expand airports and harbors to increase the flow of imports.
Study the feasibility of shortening the work week for Japanese government and private-sector employees to 40 hours and five days.
Support legislation to change tax laws to increase the amount of land available for residential construction.\ United States
Strengthen procedures to meet targets of a balanced budget by 1993.
Support legislation to provide for Family Savings Accounts allowing couples to reap tax-free earnings on contributions of up to $5,000 a year.
Seek legislation to reduce the tax rate on capital gains, profits from the sale of stocks, real estate and other investments, as a way of boosting investment.
Study ways to lower the cost to U.S. corporations of raising capital.
Boost federal spending for basic research and development.
Set national goals for improving the educational system to provide students with necessary job skills.
by CNB