U.S.-Japanese Panel on Trade Deficit Urged

The United States and Japan should form a joint commission to find ways to reduce the trade deficit between the nations and avert the “dire results” of a trade war, a former U.S. ambassador to Japan said Saturday.

“This is the time when something very spectacular must be done to shift the situation. It’s time for heroic acts, dramatic acts,” said Edwin O. Reischauer, a Harvard University professor emeritus who was ambassador from 1961 to 1966.

“I think the problem is very serious and has a deep threat within it. There’s a great deal of deep resentment in this country. It’s a frightening situation and could lead to very dire results.”

Reischauer proposed the formation of the binational commission while speaking to a group of 15 Japanese newspaper editors touring the country through the Japan Society and International Press Institute.

Long-Term Solutions

Reischauer said the panel could be appointed by President Reagan and Japanese Prime Minister Yasuhiro Nakasone.

The commission would study long-term solutions to the trade deficit problem as well as possible short-term measures to prevent a trade war between the two nations, Reischauer said.

“The only way to really convince the Japanese of the seriousness of the deficit problem is to sit down with them as members of the same commission,” he said. “We can’t allow the situation to drift as it is without inviting dangerous consequences for ourselves, Japan and the rest of the world.”

Import Restrictions

Reischauer added that the hostilities developing between the two nations are similar to those before World War II.

Reischauer said he was surprised by Reagan’s announcement in his weekly radio address Saturday in which the President threatened to take action against other nations’ import restrictions.

“I’m a little bit surprised he’s taken this stance because he’s been so strong on free trade,” Reischauer said. “This is just one more sign American patience is running thin.”