‘Lots of Work to Do’ : Shultz, Abe Hail Success of U.S.-Japan Trade Talks

“A great deal has been accomplished” in opening Japan’s markets to American telecommunications and electronics goods, pharmaceuticals and forest products, Secretary of State George P. Shultz said Friday as he predicted other export industries will become the subject of intensive negotiations between the United States and Japan.

However, Shultz warned that “we see plenty of problems out in front of us and lots of work to do” to make a significant dent in the U.S. trade deficit with Japan, which reached an estimated $50 billion last year.

The secretary of state joined Japanese Foreign Minister Shintaro Abe at a news conference to proclaim a successful conclusion to talks initiated a year ago by President Reagan and Japanese Prime Minister Yasuhiro Nakasone. The two national leaders had pledged to work for the removal of obstacles to the sale of four types of American products in Japan.

Variety of Concessions

Japan made a variety of concessions, including lower tariffs, abolition of technical restrictions and acceptance of American test data, with the goal of expanding its imports of U.S.-made electronics equipment, telecommunications devices, pharmaceuticals and lumber and wood products.

“We have done our very best” to open markets to American-made goods, Abe said through an interpreter. In addition to the easing of restrictions by the government in Tokyo, he said, Japanese firms have helped ease trade tensions by placing large orders in the United States for aircraft, satellites and electronic switching equipment.

“I am well aware that the situation is very serious in this country, including mounting pressure for protectionism in Congress,” Abe said.

Administration Anxious

Several bills being promoted by influential members of Congress call for retaliation through restrictions on imports of Japanese merchandise if Japan fails to buy more American goods. Thus, the Reagan Administration has been very anxious for success in the market-access talks covering the four products to demonstrate both to Congress and American industry that the government has an effective trade policy.

Much has been done during the past year, which included not only the successful meetings but also increased Japanese acceptance of American goods, Shultz said, noting that U.S. sales to Japan in the four product areas increased 6.7% during 1985.

“This approach has worked, and therefore we plan to continue it by working together and picking out additional industries as we go along,” Shultz said. He did not indicate, however, which specific industries might be discussed.

Yen’s Value Increases

American exports to Japan also should be significantly helped by the recent increase in the value of the yen in relation to the dollar. This makes American goods cheaper in Japan while increasing the cost of Japanese products to American consumers.

The yen and the dollar “were way out of line” but have moved into a “much more healthy” relationship, and the result will be a “pervasive effect” on trade, Shultz said. Abe agreed, saying that his country welcomed the increase in the relative value of the yen.

National economic policy is very important in easing trade tensions, the Japanese foreign minister said, promising that his country would seek its economic growth “sustained only by expansion of domestic demand.” By concentrating on growth in its home market, Japan presumably will be less aggressive in seeking a bigger share of sales in the United States and other markets for its exports.