Congress Presses Japan Trade Curbs : Backs Retaliation as Administration Calls for Restraint

The campaign in Congress to take retaliatory trade action against Japan intensified Tuesday despite Administration calls for restraint and continuing White House optimism that Japan will deliver on commitments to open its markets to American products.

By a 12-4 vote, the Senate Finance Committee approved tough legislation to impose tariffs and quotas on imports from Japan if U.S. suppliers of telecommunications equipment and other goods are not allowed access to Japanese markets equal to what Japanese companies enjoy in the United States.

Meanwhile, the House joined the Senate in approving a non-binding resolution urging the Reagan Administration to undertake trade retaliation against Japan.

But President Reagan, in an interview published Tuesday in the Washington Post, repeated his disapproval of any protectionist legislation, declaring, “I’m going to place my confidence in (Japanese) Prime Minister (Yasuhiro) Nakasone.” He said Nakasone assured two high-level White House trade envoys to Tokyo over the weekend “that he is going to continue doing his utmost to bring about some changes, evening up this trade imbalance.”

Secretary of State George P. Shultz added another note of caution by telling a conference of Southeast Asian officials in Washington that “we fight protectionism very hard here.”

He conceded that restraint is difficult when the United States is heading for a new record trade deficit this year after a 1984 imbalance of $123 billion, $37 billion of it with the Japanese alone. “But it will not diminish our efforts to keep our markets open,” Shultz said.

The Administration appears to hope that the congressional Easter recess, which begins Thursday, will calm passions on the trade issue. White House spokesman Larry Speakes asserted the Administration view Tuesday that “it would be wise for us to see what the Japanese do on April 9 before the Congress takes any precipitous action on it.”

On that date, Japan will announce a new package of regulations governing the purchase of foreign telecommunications products by Nippon Telephone & Telegraph, the Japanese telecommunications monopoly that became a private company on Monday.

But Nakasone told reporters in Japan on Tuesday that he offered the two White House envoys, National Security Council aide Gaston Sigur and Under Secretary of Commerce Lionel H. Olmer, “nothing new” when he met with them Sunday.

That assertion undercut an upbeat White House statement the previous day that the Japanese had offered Sigur and Olmer “new commitments” to open its telecommunications. Late Tuesday, the Administration avoided a chance to clear up that contradiction when it canceled a scheduled press briefing by Sigur and Olmer.

Instead, the State Department issued a statement reasserting the U.S. objective of achieving “the same access to Japan’s markets that Japanese companies have to ours” and claiming recent progress toward simplifying Japan’s complex regulation of telecommunications equipment.

“We must remember that the solution to this problem is opening Japan’s markets, not closing ours,” the statement said.

That appeared to be a reference to the bill, which cleared the Senate Finance Committee on Tuesday, to mandate retaliatory action against unfair trade practices under laws already on the books.

In Tokyo, the Foreign Ministry today condemned the panel’s action as “not only discrimination against Japan but a threat against the free trade system.”

Sen. John C. Danforth (R-Mo.), chief sponsor of the committee bill, defended it as “not protectionist” because it is “intended to enforce the trade laws as they exist. The point is not protection or retaliation but to open up the Japanese market. . . . Japan is an ally and a valued friend, but if the Administration does not enforce the law, then all that is left is temper and rhetoric.”

And tempers flared. Asked by a reporter whether such legislation would trigger retaliation from the Japanese, the chairman of the Finance Committee, Sen. Bob Packwood (R-Ore.), exploded:

“Let them buy their soybeans from Argentina, if they want. And let them sell their cars to Argentina, also. A trade war would hurt both sides, but it wouldn’t hurt us as much as we would be hurt if things go on as they are now.”