Nakasone Tells Nation to Buy Foreign Goods : U.S. Applauds Tokyo Move as ‘Courageous’ but Awaits Result

Using words such as “commendable” and “courageous,” the Reagan Administration applauded Japan’s moves toward lower trade barriers Tuesday, adopting a patient, optimistic attitude about the ultimate result.

White House Chief of Staff Donald T. Regan, presenting what was billed as the Administration’s definitive response, praised Japanese Prime Minister Yasuhiro Nakasone for “personal leadership.”

But Regan emphasized that “specific and concrete progress” is “needed urgently” to open Japanese markets to U.S. telecommunications, advanced electronics, pharmaceuticals and forest products.

‘Pleasantly Surprised’

He described President Reagan, vacationing at his ranch near here, as “very pleasantly surprised” at Nakasone’s televised appeal to Japanese citizens to buy more American products.

“Obviously, this is a pretty courageous action by the Japanese prime minister,” Regan said. “He’s risking a lot politically here. That’s what we think is very unusual and that’s what we applaud.”

But outside the Administration, Nakasone’s mere pledge--lacking any specific action--to develop a market-opening plan “as soon as possible” was greeted with impatience and coolness.

Sen. John C. Danforth (R-Mo.), who has been pushing for protectionist legislation that would require Reagan to retaliate against Japanese exports, declared:

“The problem of Japanese trade barriers will not be solved by a single Nakasone speech, announcement or package of promises. The only thing that counts is results. Evidence of real market opening by Japan will have to be new sales of competitive American products.”

Danforth noted that Japan pledged in 1981 to remove trade barriers and, he said, the results were “negligible.” The U.S. trade imbalance with Japan has mushroomed from $18 billion in 1981 to $37 billion last year and is expected to exceed $40 billion this year.

Danforth vowed to continue his fight for tough protectionist legislation. The Senate Finance Committee, under prodding by Danforth, recently approved a bill that would force Reagan to impose stringent penalties on Japanese imports if Tokyo refuses to expand market access for U.S. products.

But Regan urged Danforth and his protectionist colleagues to call off their legislative efforts, declaring that “they’ve accomplished the objective of getting the Japanese attention to what the Congress wants.”

The chief of staff said that the Senate’s unanimous adoption of a resolution urging Reagan to retaliate if the Japanese do not lower trade barriers--followed by House approval of a similar measure--”did have quite a jarring effect on many people in Japan, including some of their politicians.”

But he cautioned that even if the Japanese implement all the market-opening steps alluded to by Nakasone, “I don’t think it’ll have very much effect, if any, on the ’85 trade deficit.” That deficit, he said, “certainly won’t get much better very quickly.”

Regan acknowledged that the U.S. trade problem is aggravated by the strong American dollar, which tends to price U.S. products out of foreign markets and enable foreign exporters to sell their goods at an attractive price in the United States.

The strong dollar, Regan noted, is a result of high interest rates. But he predicted that low inflation combined with federal spending controls “will be recognized in the world markets,” thus perhaps weakening the dollar.

The Administration’s conciliatory approach toward Japan clearly was being taken, in large measure, because Japan is the principal U.S. ally in Asia--and Nakasone and Reagan are particularly friendly. Nakasone in the past has provided crucial diplomatic support for Reagan on controversial arms issues.

In Washington, Treasury Secretary James A. Baker III said that the Japanese should be given “a reasonable amount of time” to implement the market-opening steps. And the State Department lauded Nakasone’s speech as “commendable” but emphasized that “drastic change” still is needed in Japan’s trade policies.

Japanese negotiators will fly to Washington next week to discuss specific ways to increase U.S. sales of telecommunications products to Nippon Telegraph & Telephone, the giant Japanese communications firm.

“I hope that the Japanese delegation will come to Washington prepared to talk in concrete terms,” asserted the U.S. special trade representative, William E. Brock III. The U.S.-Japan trade dispute currently focuses on telecommunications because the United States is the acknowledged world leader in high-technology products.

Regan said that Nakasone’s speech “reinforces his commitment” made to the President at a meeting in Los Angeles on Jan. 2. The Japanese leader promised then to improve market access for U.S. telecommunications, advanced electronics, forest products and pharmaceuticals and medical equipment.

But what Regan and other Administration officials chose especially to praise was Nakasone’s effort Tuesday to change the buying habits of Japanese citizens.

“He has gone on television and specifically told his own people it’s a matter of life or death for the Japanese to change their buying habits, that if they don’t they’ll have unusual unemployment, they will not be able to sell their cars, their videos and machines in the United States,” Regan noted. “Those are very strong words. That’s not something you yawn about.”

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