The Prime Target of the Effort to Open Markets Turns Out to Be Japan

The Reagan Administration has tried to push a new round of trade liberalization as a way to force a reciprocal opening in foreign markets. While the approach is universal, the weakness of the European recovery makes it hard to ask for concessions there. The prime target of the effort to open markets turns out to be Japan.

In that spirit President Reagan ended the accord whereby Japanese auto exports to this country were limited to 1.85 million annually. In return, the United States indicated, it wanted Japan to hold down auto exports administratively, while opening up markets in communications equipment, electronics, forest products and pharmaceuticals.

But cracking the Japanese market--with its low consumer spending, outmoded distribution system and tight connections among the government, banks and industry--is intrinsically difficult. The difficulty was increased when Reagan persuaded the special trade representative, William E. Brock III, to become secretary of labor, removing the one official who enjoyed clout in Tokyo and Congress’ confidence.

The Japanese then announced that they would increase auto exports by a goodly number (450,000) this year. Next they showed themselves very reluctant to open up markets--notably in communications equipment, which was due for a new regime with the privatization of the state telephone monopoly this week.

At that point the congressional dam burst: 92 senators voted for a resolution seeking retaliatory restrictions against Japanese exports as a means to force open Japanese markets. On Tuesday the Senate Finance Committee turned the resolution into legislation.

In the House the surge was just as strong. To slow the pace, Speaker Thomas P. O’Neill Jr. decided to appoint a committee. No free-traders volunteered, and the rush of protectionists was so great that O’Neill closed the lists early. But, while the committee (and its chairman, Democrat Don Bonker of Washington and the forest-products industry) is keen to punish the Japanese, procedural delays will put off legislation until after the spring recess.

Having spiked its guns by demoting Brock, the Administration hastily sent off a delegation to persuade Prime Minister Yasuhiro Nakasone that things were serious. The group returned with what Reagan said was a pledge from Nakasone to “do his utmost.” But U.S. manufacturers, as well as Congress, are skeptical. Nakasone has only limited powers, and Brock’s successor must start anew with Congress.

So the Japanese trade issue will come alive again at next month’s economic summit in Bonn, and for the rest of this session of Congress. Japan seems sure to be tagged with some restrictions. It is a question whether the Administration can avoid a widening of protectionism that will mean a trade war with Europe and, in riposte, a broad attack on this country’s lopsided economic policy.