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Nakasone Hits Back at Trade Critics : Prime Minister Says Bulk of Surplus Due to Dollar, U.S. Orders

Times Staff Writer

Prime Minister Yasuhiro Nakasone criticized Americans on Thursday for what he called “Japan-bashing"--blaming Japan for the U.S. trade deficit.

Nakasone said that, of the Japanese goods sent to the United States every year, more than $19 billion worth represents products ordered by American firms, many of them from American subsidiaries here.

He added, in a nationally televised news conference, that Japan will continue its efforts to open its markets to foreign suppliers. But he took issue with critics who indulge in “Japan-bashing,” and he said that “Japan, too, has things it would like to say.”

Pointing to the strong dollar, which contributes to the U.S. deficit with Japan, Nakasone said that, if the present exchange rate of 248 yen to the dollar should fall to 220 to 1, “a considerable part of exports from Japan would stop and more imports would come in from the United States.”

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‘America’s Problem’

He noted that Secretary of State George P. Shultz has described as “America’s problem” two-thirds of the trade imbalance that it has with Japan.

For the first time, Nakasone offered an analysis of the goods that the United States buys from Japan. According to his figures, he said, the Americans themselves are responsible for more than $24 billion worth of imports from Japan.

“Of some $60 billion of Japanese exports to the United States, about one-third--more than $19 billion--are parts which American companies import from Japan,” he said.

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Although Nakasone did not give a specific breakdown of the figure, which has never been cited before by any Japanese official, he said most of the $19 billion is accounted for by parts that American companies order from their subsidiaries in Japan or take the initiative themselves to order from Japanese suppliers. He also said that the figure included the value of passenger cars that American firms such as General Motors procure from Japan to sell under their own brand names in the United States.

“These are products,” he said, “which the United States is taking the initiative to have made in Japan. . . . Japan is being used to help Americans manufacture finished products.”

Among Japan’s other exports to the United States, Nakasone said, are $5 billion worth of such products as watches and videocassette recorders, which American firms do not manufacture or manufacture only in limited quantity. (No VCRs are made in the United States.)

“These products are not applying any pressure to American industries,” Nakasone said.

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65% of Total Deficit

He did not make the calculation, but the total of American-initiated procurement in Japan and the exports of products not made in the United States comes to more than $24 billion, or about 65% of last year’s $36.8-billion trade deficit with Japan.

In response to a question, Nakasone said that Japan will “continue to work hard to promote an expansion of imports,” noting that a decision Tuesday to eliminate or reduce import duties covers 1,850 of the 2,302 items on which Japan still imposes duties. Nakasone acknowledged that the measure failed to deal with duties on 224 agricultural products and 75 industrial products of interest to foreign countries.

On those products, he said, “we will deal with those we should deal with” in the course of a three-year action program. Nakasone said his government will announce the outline of this program July 10.

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