
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, July 5, 1995                   TAG: 9507060111
SECTION: EDITORIAL                    PAGE: A-10   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

U.S.-JAPAN

JAPANESE auto companies made unenforceable promises last week to buy more U.S.-made parts and build more cars at U.S. factories. Thus ended the Clinton administration's threat to impose 100-percent import tariffs on Japanese luxury cars, and any immediate prospect of an escalating trade war.

The dispute ended with a whimper rather than a bang, notwithstanding the president's attempt to spin it into a victory, and the whole affair hasn't exactly furbished Clinton's reputation or that of U.S. Trade Representative Mickey Kantor as a hard-nosed negotiator. But when you play foolish games, the outcome often is less than happy.

At issue isn't whether autos and auto parts are big contributors to America's trade deficit with Japan. They are.

Nor is the issue whether barriers to U.S. imports exist in the Japanese market. They do.

At issue, rather, is what should have been done about the situation - and what should be done if, as seems likely, the new accord leads to little change.

One thing's sure: The Clinton way wasn't it. Even had the Japanese given in to U.S. demands for stiff quotas of auto and auto-part purchases, the deal would have been a bilateral agreement undercutting global free trade. If the administration thought it had a case, it should have taken it to the World Trade Organization for resolution.

Multilateral free trade is the ideal. But amid the irritations of dealing with a Japan, it should be kept in mind that a trade-restricting country in the long run hurts itself more than would-be trading partners.

This is sometimes forgotten, because frustrated exporters - the American auto industry, in this case - constitute a specific, easily recognized sector of the economy. But to the extent that artificial trade restrictions in Japan hinder the sale of U.S. auto and auto-parts sales there, over time it is Japanese consumers in general who are hurt most, in the form of higher prices and fewer product choices.

When protected from competition, American industries tend to grow uncompetitive, unprogressive, inflexible. Why should Japanese industry be any different? The United States wants a freer-trading Japan; Japan should - in its own interest - want it too.

by CNB