Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, February 12, 1994 TAG: 9402120166
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: Los Angeles Times
DATELINE: WASHINGTON LENGTH: Medium
"The reality is, we'll take some action," a senior administration official said, holding out little hope that - barring a Japanese concession - a trade clash could be avoided.
After three hours of what were described as "direct, intense" meetings with Hosokawa, Clinton said that, while the overall U.S.-Japanese relationship remains solid, six months of negotiations have failed to reconcile widely differing views on the crucial issue of opening Japanese markets to U.S. goods.
With the failure to reach an agreement by a deadline set last July in Tokyo, the president rejected Hosokawa's call for more talks.
"There is a need for a little bit of cooling off," Hosokawa acknowledged, with Clinton at his side in the White House East Room at a news conference.
"The president feels it would be pointless" to continue the negotiations "until there is a change in attitude" by the Japanese, a senior administration official said.
The dispute between the two major trading partners is over how to reduce Japan's towering trade surplus in four economic sectors - autos and auto parts, medical equipment, telecommunications equipment and insurance.
Clinton and Hosokawa's predecessor, Kiichi Miyazawa, agreed in Tokyo in July that they would establish a framework for setting "objective criteria" by which progress in reducing the trade surplus could be measured.
But Japan has insisted that, however such criteria are set, it will not agree to numerical targets - for example, specific sales goals of U.S. automobiles in Japan. Numerical targets in the four economic sectors doomed the talks on Friday.
"Unfortunately, we have not been able to reach agreement in any of the four areas we identified last July," Clinton said. "Japan's offers made in these negotiations simply did not meet the standards agreed to in Tokyo."
He continued, "Today we could have disguised our differences with cosmetic agreements, but the issues between us are so important for our own nations and for the rest of the world that it is better to have reached no agreement than to have reached an empty agreement.
"If Japan has further proposals, our door remains open. But ultimately, Japan's market must be open," Clinton said.
Overall, the July agreement is intended to bring down Japan's global trade surplus, which in 1993 was roughly $132 billion, nearly half of which was with the United States.
Citing the closed nature of the Japanese market, Clinton said that U.S. medical technology companies have 40 percent of the European market but only 15 percent of the Japanese market. Foreign telecommunications companies' sales amount to 5 percent of the Japanese market; such sales account for a 25 percent share of the market in other major industrial nations, an administration official said.
Hosokawa said that his new administration has been trying to remove regulations from the Japanese economy, mired in a rare recession, and that numerical targets would run counter to such a course.
"That's not what we're asking for," Clinton said, insisting on "a way of measuring by objective standards whether progress is being made in opening markets."
Senior administration officials said that the White House would focus during the next two weeks on measures that would pressure Japan to take the steps it has resisted for more than a decade.
"We will be reviewing all of our available options to open the markets, and there need be no delay in the review," a senior official said.
Asked why the administration was unprepared to take action immediately, the senior aide said: "The Japanese over the last several days have been giving us reasons to think that they might be, at the last minute, meeting our criteria."
by CNB