Japan Tells U.S,. It Will Boost Car Exports 24% : 2.3 Million Total for ’85 Does Not Represent ‘Significant Restraint,’ White House complains
Japan has informally notified the Reagan Administration that it plans to export 2.3 million cars to the United States this year, a hefty increase of 450,000 vehicles that White House officials complained does not represent “a significant restraint” in the Japanese penetration of the American market.
“We don’t have any actions planned,” Marlin Fitzwater, deputy White House press secretary, said Wednesday, but he indicated that the Reagan Administration is disappointed with the Japanese marketing plan and with mounting evidence that Japan does not intend to open its domestic markets to U.S. goods.
The 2.3 million figure--about 24% above the current limit--would be far higher than the public estimates by Japanese auto executives of the anticipated rise in exports without restraints. Takashi Ishihara, president of Nissan Motor Co., for instance, said in January that the increase would be 10% or “at the most 15%.”
Quotas Expiring
For the last four years, Japan voluntarily has limited auto shipments, with the current ceiling at 1.85 million vehicles. The voluntary quotas expire Sunday.
The Administration is particularly seeking, so far without substantial success, to persuade the Japanese to open up their own telecommunications market to U.S. exports. Fitzwater warned that the Japanese should be aware “of the recent protectionist sentiment on Capitol Hill” if they do not take voluntary measures to help close the U.S. trade gap with Japan.
The protectionist sentiment in Congress was expressed Wednesday when the Senate Finance Committee, amid warnings that “we’re already in a trade war,” overwhelmingly approved a resolution calling on the Reagan Administration to retaliate against Japanese imports to this country, if Japan does not open its markets to U.S. products.
“We are not going to be a doormat to the Japanese any more,” said Sen. John C. Danforth (R-Mo.), referring to America’s $37-billion trade deficit with Japan last year. “We need some degree of measured retaliation for closed markets in Japan rather than constant whining and complaining. I am tired of sending messages to Japan. The time has come to do something.”
Talk of Surcharge
An increasing number of legislators are discussing the idea of a surcharge on imports from Japan, an action that would make foreign products much more expensive and possibly uncompetitive in the United States.
Two Japanese newspapers also reported both Wednesday and today that the Ministry of Trade and Industry will announce, perhaps Friday, a 2.3-million limit on car exports to the United States. That is close to the apparent Japanese export capacity of 2.6 million, according to the White House.
“This is not a significant restraint,” said Fitzwater, who added that the same word had been relayed unofficially to Washington.
Regardless of the number of cars sold in this country, “we want access to their markets,” Fitzwater said. The Japanese “are free to export what they want,” he said.
Officially, the United States makes no links between Japanese auto shipments and U.S. access to Japanese markets. “There is no quid pro quo, no connection,” Fitzwater said. But, he added, “we do expect progress in getting American goods into Japan.”
While the White House may not draw a connection, members of Congress, concerned about the massive U.S. trade deficit with Japan, are likely to clamor for tough action. The resolution approved Wednesday by 17 members of the Finance Committee, with one abstention, would call on the Reagan Administration to specify within 45 days what retaliatory steps it intends to take if Japan does not allow expanded U.S. access to its markets after voluntary quotas on Japanese cars expire.
Although the resolution would not be binding on the Administration, Danforth, co-sponsor David L. Boren (D-Okla.) and committee Chairman Bob Packwood (R-Ore.) made it clear that mandatory legislation would follow if negotiations on opening Japan to U.S. telecommunications equipment do not soon bear fruit.
The Japanese government communications monopoly, Nippon Telephone and Telegraph, will be turned over to private hands on April 1, and U.S. negotiators have been trying to work out new trade regulations that would permit the newly private company to buy U.S. products.
The resolution approved by the Finance Committee would call on the Administration to invoke the rarely used Section 301 of the 1974 Trade Act, which empowers the President to impose tariffs, quotas and other import restraints on nations to retaliate for unfair trade practices.
The resolution is an updated version of an earlier resolution calling for an extension of the expiring auto quotas until Japan opens its markets significantly to U.S. products. That resolution had 38 co-sponsors and, given the tide of anger against Japanese trade practices, the revised version of it seems virtually certain of Senate approval if it comes to a vote.
An Administration official hinted that Reagan, while formally opposed to “protectionist legislation,” might consider the resolution approved by the Finance Committee as useful bargaining leverage in the current trade negotiations with Japan.
