Japan Warned to Take Dramatic Trade Steps

An influential U.S. congressman Thursday urged Japan to set a goal of cutting its trade surplus with the United States--expected to reach nearly $50 billion this year--to “not more than $15 billion in five years.”

Without such dramatic action by Japan, Congress will enact protectionist legislation after finishing work in October on tax legislation, according to Rep. Sam M. Gibbons (D-Fla.), chairman of the House Ways and Means subcommittee on trade. He and eight other congressmen spoke at a news conference here.

“People need to know where we are going,” Gibbons said. “There needs to be a consensus between the U.S. and Japanese governments as to where this thing is going. It (the trade surplus) must go down. And if we have goals to work for, I think we can do a lot better job.”

Prime Minister Yasuhiro Nakasone made no comment on Gibbons’ proposal in a meeting with the group Wednesday, but other Japanese officials rejected it outright. Fixing a numerical limit to a trade imbalance, they said, “smacked of a planned economy.”

No Promises

Gibbons and other members of the delegation said Nakasone and Foreign Minister Shintaro Abe, whom they also met, were “responsive” to their appeals. However, they said nothing about receiving any promises from the Japanese leaders.

“We came to Japan to give one simple, straightforward message: In the U.S.-Japan trade relationship, the time is very, very late; the situation is very, very critical,” Gibbons said.

“The political system in the United States will not sustain these large deficits,” he added.

Claiming that each $1-billion portion of a trade deficit deprives 25,000 Americans of jobs, Rep. Carroll A. Campbell Jr. (R-S.C.) said Japan’s expected $50-billion surplus with the United States this year will cost 1.25 million American jobs.

‘Ready to Erupt’

“This is no longer a question of trade or economics. It is now a political question, and the people of Japan need to know it will be addressed politically (by Congress),” Campbell said.

“Congress is ready to erupt,” added Rep. Bill Frenzel (R-Minn.).

Rep. Richard T. Schulze (R-Pa.) said that it is “already too late” to stop protectionist legislation and predicted that Congress will override any presidential veto of such legislation.

Nakasone was said to have told Schulze that, if the Japanese conclude that Congress is determined to penalize Japan in any case, there will be no incentive for Japan to take further action to open its markets. Abe told the group that Japan’s market-opening efforts will not produce an improvement in the U.S.-Japan trade imbalance by the October deadline that the group set.

Rep. William M. Thomas (R-Bakersfield) told reporters that, if past Japanese practice repeats itself, California wine coolers (citrus juice-white wine products) will be kept out of the Japanese market until Japanese firms have a chance to get several years’ lead time for their own products. “I make that prediction in the hope I will be wrong,” he declared.

Rep. Don J. Pease (D-Ohio) predicted, and the others agreed, that a bill to impose a 25% surcharge on imports from Japan, South Korea, Taiwan and Brazil would pass the House any time it is put to a vote.

The congressmen agreed that the trade subcommittee most likely will pass a bill imposing new, stricter limits on imports of textiles as its top priority in October, when the subcommittee begins to deal with 57 trade bills now before it.