Nakasone Tells Nation to Buy Foreign Goods : He Warns Japanese of Depression Peril in Protectionism

Prime Minister Yasuhiro Nakasone, saying that Japan’s livelihood could be in the balance, called Tuesday for a new effort to open the Japanese market to foreign trade.

Nakasone warned Japanese industries that the process could be a painful one, and he called on the people to “please buy foreign products” to head off what could be a “terrible depression and unemployment.”

He appeared on television nationwide after his government announced what it called an action program aimed at opening the Japanese market to foreign goods. Japan has been under increasing pressure from the U.S. and other governments to do this.

In Santa Barbara, President Reagan was said to be “pleasantly surprised” by Tuesday’s developments in Tokyo, but a White House official cautioned that “specific and concrete progress is needed urgently” from the Japanese.

‘A National Principle’

Nakasone noted that tough, anti-Japanese trade legislation has been proposed in the U.S. Congress, and he recalled that protectionist trade policies were among the causes of World War II.

“I want to ask you to make the fight against protectionism a national principle,” he said. “President Reagan is exerting great efforts to fight protectionism. . . . We, too, must fight against protectionism, with no less zeal.”

No immediate reduction in Japan’s import tariffs was spelled out, either by Nakasone or in the government announcement. Some reductions are to be agreed on by the end of June.

Other pending steps include:

--Changes in fixing standards for product safety and quality. Nakasone said the Japanese government has intervened to an extent that foreigners have found unacceptable. Such intervention will be reduced to the lowest possible level, he said, and the principle to be followed is “let the customer make the choice.”

--Japanese representatives of foreign firms will be named to a key advisory council dealing with telecommunications policy and standards. Nakasone implied that such representatives will be named to similar councils throughout government as a means of taking further steps toward opening Japan’s market.

Details of the program are to be worked out by July and implemented over the next three years.

Nakasone told his countrymen that Japan has benefited from free trade more than any other country and stands to lose more than any other country if the system should collapse.

Charts Dramatize Appeal

Using charts to dramatize his unprecedented appeal, something no other Japanese prime minister has ever done, he emphasized statistics showing how much Japan’s exports to the United States increased in 1984--a year in which the United States had a trade deficit with Japan of $36.9 billion--and how little the average Japanese buys from abroad.

The average Japanese, he said, buys only $271 worth of foreign goods a year, compared with $753 for the average American and $1,280 for the average West European. He said the Japanese average is too low.

He said that if each Japanese would purchase an additional $100 worth of foreign products each year, Japan’s imports would increase by $12 billion a year. Japan’s population is about 120 million.

Still, he said, “Japan alone is not to blame” for its global trade surplus, which was $44 billion last year, “virtually tantamount to a world monopoly on black ink in trade.” He said that a trade imbalance “this large cannot be wiped out in one stroke,” and he said the United States also will have to take measures to reduce the deficit, such as lowering interest rates to correct for overvaluation of the dollar.

‘Can’t Expect Much’

Toshio Komoto, the state minister in charge of formulating the steps included in the government announcement, told the press that “we can’t expect much change” in the trade imbalance with the United States as a result solely of the measures announced Tuesday.

“Only when combined with correction of the yen-dollar exchange rate and more consumer demand in Japan will effects of market-opening be felt,” he said.

Yet Nakasone devoted much of his statement to an explanation of why Japan must adopt new trade policies. His remarks echoed the complaints that Americans have been making against Japan for years.

Nakasone paid no attention to a printed copy of remarks prepared for him. He spoke extemporaneously, glancing at the notes only to confirm statistics. And he omitted an appeal to business firms, which the Cabinet had approved. The prepared text said:

“I hope that business circles will fully realize the fact that exports alone cannot bring about . . . harmonious external economic relations.”

Makoto Kuroda, director of the trade policy bureau of the Ministry of International Trade and Industry, said that the head of the ministry, Keijiro Murata, plans to call in, one by one, the presidents of 20 to 30 of Japan’s largest exporting firms and ask them to buy more foreign machinery and components.

A set of what Komoto described as emergency measures designed to respond to immediate trade issues indicated that Japan will lower tariffs on imports of plywood and other forestry products. The Komoto announcement, however, said only that the reductions will be carried out “with a target of beginning approximately in the third year” (1988) of a five-year government program to build up the strength of domestic plywood and forestry firms.

No promise was made on how much, or when, the 15% tariff on imported American hardwood plywood would be reduced. Nakasone said the tariff cuts are to be carried out in stages.

The United States, which has made forestry products one of four sectors to be given special emphasis, had demanded the abolition of tariffs.

Last-Minute Debate

The issue stirred up such a furor that it was still being debated an hour before Nakasone’s television appearance. Bureaucrats in the Ministry of Agriculture and Forestry and members of Nakasone’s Liberal Democratic Party resisted any tariff cuts right up to the moment the Cabinet was convened to approve the measure.

The package also summarizes the results of U.S.-Japanese negotiations in other sectors--telecommunications, pharmaceuticals and medical equipment, electronics--that the Reagan Administration has emphasized.

Use of foreign test data was approved for certification of medical equipment.

The package also contained a sort of symbolic victory. After years of pleading to be allowed to use standard-size American containers, which are a foot taller than permitted by Japanese law, foreign shippers won permission to use them under specified conditions. Police and construction officials had warned that trucks carrying the taller containers would scrape the ceilings of tunnels.

Learned of Permits

Only after American shippers discovered that the police were issuing special permits to Japanese manufacturers of American-size containers to truck them to Japanese ports did Japanese resistance collapse.

Nakasone promised to announce by July the framework of a three-year market-opening program with the idea that “imports will be free in principle and restrictions allowed only as exceptions.”

Plans for tariff cuts not involving forest products are to be announced by June, and a new goal for increasing foreign aid is to be set by the end of the year. The program also specifies that the government’s Export-Import Bank will lower interest rates on loans to finance imports of manufactured products.

The program pledges more foreign procurement by Nippon Telegraph and Telephone Corp., the removal of obstacles to the purchase of an American communications satellite, and a promise to allow the Export-Import Bank to finance such a purchase. Bills to provide protection for the design of semiconductor chips and copyright protection for computer software, similar to laws in the United States, are to be submitted to Parliament.

Procedural improvements for approval of cosmetics also were pledged.

When in Japan ...

In saying that Japan alone is not to blame for its massive trade surplus with the United States, Nakasone criticized what he said are inadequate efforts by American businessmen to sell their products in Japan.

“Japanese who sell products in the United States all speak English,” he said, “but do the Americans who come to Japan speak Japanese? I have never heard of an American salesman speaking Japanese.

“When Japanese sell abroad, they prepare catalogues in English. But when Americans come to Japan, they bring English catalogues. American businessmen are not working as hard as Japanese businessmen. That may be an inevitable result of their large market at home. But there is that aspect. Japan alone is not entirely at fault.”