Baldrige Appeals to Japan for Fast Action on Trade

Warning that Congress is “losing faith” in the Reagan Administration’s trade negotiations with Japan, Commerce Secretary Malcolm Baldrige appealed Monday to Prime Minister Yasuhiro Nakasone to produce quick and “specific” results on three issues.

The issues he cited were semiconductor trade, the U.S. demand that bidding on contracts for construction of a new 1 trillion yen ($6.45 billion) Osaka International Airport be opened to American companies and purchases by Japanese manufacturers of more American auto parts.

Nakasone, whose ruling party won a landslide election victory July 6, promised to study the requests “with sincerity.” Only on Baldrige’s appeal concerning the Osaka airport, however, did he offer specific assurances.

Both he and Transportation Minister Ryutaro Hashimoto, whom Baldrige met later, told the commerce secretary that bidding on the airport contracts will include American firms but that only companies designated as eligible to submit bids will be allowed to take part.

Hashimoto said Japan’s “designated firm” bidding system is meant only to ensure that companies large enough to carry out the contracts would be allowed to bid and is not designed to shut out foreign firms. Baldrige reportedly insisted that open bidding be allowed, however. Hashimoto said his ministry would hold an explanatory meeting for U.S. companies wishing to take part in the bidding.

The commerce secretary, according to Japanese officials, raised no objections when Hashimoto said that American firms would not be allowed to bid on civil engineering contracts to build an artificial island in Osaka Bay on which Japan’s first 24-hour-a-day airport will be situated. The minister said U.S. firms, however, would be designated to bid for contracts to build the airport’s terminal building and its runways, as well as to supply equipment.

Work to create the artificial island is scheduled to begin in November; the airport is scheduled to be completed in March, 1993.

Congress May Override Veto

The commerce secretary, who arrived Saturday for a hastily arranged “private” visit, cited the danger that Congress may override President Reagan’s veto last December of legislation that would have limited American imports of textiles and shoes. A vote to override the veto is scheduled for Aug. 6, Baldrige noted.

Nakasone told Baldrige that he shares the Reagan Administration’s concern about a rising protectionist sentiment in Congress, but he said Japan’s exports to the United States, in yen-value terms, had already started declining as a result of the dramatic increase in the yen’s relative value since last September.

He urged Baldrige to point that out to congressmen, but the secretary replied that “proof” of a turnabout in dollar figures would be necessary.

The appreciation of the yen has forced Japanese exporters to raise the prices that they charge in dollars to recoup some of the decline in yen income that they have suffered. As a result, this year’s American trade deficit with Japan is running at an annual rate of about $60 billion, compared to last year’s record $49.7 billion.

Without spelling out any details, Baldrige asked Hajime Tamura, the new minister of international trade and industry, to forge an “import vision” for Japan similar to the export strategy the Japanese used to recover from the physical and economic damage of World War II.

Chip Talks Resume

Negotiations designed to eliminate a host of American complaints about trade in semiconductors have dragged on for months; talks on Japanese purchases of American auto parts are scheduled to begin in August.

The semiconductor negotiators returned to the bargaining table Monday afternoon at the request of Japan’s Ministry of International Trade and Industry. The talks had broken off Saturday, with U.S. officials accusing the Japanese of reneging on terms to which they had previously agreed.

In Washington, U.S. trade official said that if no agreement is reached by midnight Wednesday, the Reagan Administration will label Japan an unfair trader--a designation that the Japanese government is seeking to avoid through the negotiations. But if the designation is made, the United States would impose high tariffs and possibly quotas against imports of Japanese semiconductors and products using them.

Three trade complaints involving semiconductors have been made against Japan by U.S. companies and the Administration--two charging Japanese makers with dumping chips in this country below their fair market value, and the other accusing Japan of blocking U.S. companies’ sales there.