Message to Tokyo

The timing of Gov. George Deukmejian’s trip to Japan could not be better. There is no excuse for any misunderstandings by Japanese leaders of his message and of the need for an urgent response from them.

Deukmejian outlined the message in his State of the State address when he affirmed that “California believes in free trade but we insist on fair trade.” He underscored the urgency in a subsequent press conference, noting that the Japanese “are not moving rapidly enough.”

The governor is opening California’s Asian Trade and Investment Office in Tokyo, part of a $9-million campaign to promote the exporting of California products and to attract foreign investments. A second office will open in London in April. The initiative comes none too soon. California has not been represented in Tokyo since 1968, when then-Gov. Ronald Reagan closed the office, while 30 other states already have active operations.

California’s Japan connection is enormous. The state sells one-third of its harvest, about $1 billion in food and fiber, to Japan each year, and an additional $5 billion in manufactured goods, led by office machinery and data-processing equipment. About one-fourth of Japan’s imports from the United States come from California ports, and 42% of Japan’s massive exports to the United States come through California.

But barriers remain--barriers that restrict the flow of California exports. And, in the year since California revised the unitary tax to meet objections of foreign companies, the flow of investments into the state has been disappointing.

The timeliness of the governor’s visit is evident in its coincidence with publication of new statistics on U.S.-Japan trade. The total U.S. trade deficit for 1986 is now estimated at a record $170 billion, with the deficit with Japan estimated at $57 billion--the largest with any nation. In contrast, Japan has now announced a 1986 trade surplus with the world of $82.6 billion--an increase of 79% over 1985. Clearly, Japanese commitments to policy changes that will address that disproportionate surplus are not yet working. Even the continuing rise in the value of the yen has not yet had a significant effect on trade relations.

There are sobering elements, as Deukmejian was reminded on his arrival in Tokyo by U.S. Ambassador Mike Mansfield. If Japan did everything that the United States has asked, the trade imbalance with the United States would be reduced by only $10 billion. But, as the governor responded, that would be welcome--particularly in California.