Import Finished Products, 6 Senators Urge Japanese
Six American senators led by John C. Danforth (R-Mo.), chairman of the subcommittee on international trade, told Prime Minister Yasuhiro Nakasone of Japan on Saturday that a strong yen, lowered tariffs and the recently announced Japanese market-opening measures will not be enough by themselves to remedy the huge U.S. trade deficit with Japan.
Speaking to reporters at Nakasone’s official residence, Danforth said that the Japanese have a “mind-set” that is opposed to buying anything other than raw materials from overseas. “It’s one thing to lower tariffs and it’s another thing to buy the goods,” Danforth said.
Danforth added later in a prepared statement that his message to Nakasone was, “We must move beyond product-specific negotiations to achieve a fundamental increase in Japan’s purchases of manufactured and processed (agricultural) products.”
According to Japanese government statistics, raw materials account for 48% of Japan’s imports from the United States, while nearly 100% of Japan’s exports to the United States are finished products. The U.S. trade deficit with Japan is expected to reach $50 billion for 1985 when official figures are announced next month. For the last several years, Japan has accounted for about one-third of the total U.S. trade deficit.
Alaska Oil No Cure
Danforth also stressed during the nearly two-hour meeting with Nakasone that proposed Japanese purchases of Alaskan oil would not be an effective way of solving the trade problem. “(This) wouldn’t mean anything to people from Kansas City or St. Louis,” he said. “We have to be able to demonstrate that we have job potential.”
Sen. Thomas F. Eagleton (D-Mo.) told Nakasone that in Missouri, some unemployed workers say that they see the removal of their jobs to Asia as a kind of “second yellow peril.”
A Japanese Foreign Ministry official quoted Nakasone as telling the senators that he understands the Americans’ impatience, but that a $50-billion trade deficit cannot be fixed overnight.
The official also quoted Nakasone as telling the senators, “We have made major efforts to solve the trade problem by working to achieve an increase in the value of the yen, by coming up with a market-opening action program, and by participating in the MOSS (market-oriented sector-specific) talks,” aimed at increasing access to the Japanese market for U.S. and other suppliers of medical and pharmaceutical goods, telecommunications, electronics, and forest products.
Export Volume Decreasing
“Although the value of Japanese exports has continued to increase, the volume has decreased since the measures were taken,” the prime minister was quoted as saying.
Danforth’s remarks came within hours of a joint announcement in Washington by Secretary of State George P. Shultz and Japanese Foreign Minister Shintaro Abe that “important progress” was made in the yearlong MOSS talks.
Clyde Prestowitz, special counselor to the secretary of commerce, said in Tokyo last week that Japan had purchased about $2.5 billion worth of satellites and other telecommunications equipment last year from American suppliers as a result of the MOSS negotiations but that problems remain in two of the sector areas--electronics, in which U.S. chip makers have brought anti-dumping action against their Japanese competitors, and forest products, in which Japan has refused to lower tariffs on plywood and veneer before April, 1987.
Besides Danforth and Eagleton, the senators calling on Nakasone were Max Baucus (D-Mont.), Alan K. Simpson (R-Wyo.), J. James Exon (D-Neb.) and John D. Rockefeller IV (D-W.Va.).
