U.S. Action Needed on Trade, Nakasone Says : Raise Competitiveness, Carry Out ‘Commitment’ to Cut Budget Deficit, Japanese Premier Urges

Prime Minister Yasuhiro Nakasone, who leaves Wednesday for talks in Washington, criticized the United States today for failing to carry out its “commitment” to Japan to reduce the American budget deficit to help curtail a massive trade imbalance with Japan.

“We will make our efforts” to reduce the trade imbalance, Nakasone told a group of foreign correspondents at his official residence. “But we will also ask the United States to make further efforts, too.”

Nakasone said Japan regards budget-reduction pledges made by the United States in bilateral and multilateral forums as an “official commitment to us.”

“But, in reality, is that (promise) being carried out? We must have American efforts on this, too,” he said.

Nakasone, 68, who will be making his sixth visit to the United States as prime minister, said he overruled advice from both Japanese and Americans who told him that “it’s better not to go.”

Trade tensions, he said, make it more important than ever to make the trip in an attempt to solve, “or lay the path toward solution,” of all individual U.S.-Japan trade disputes and “ensure that cooperative relations between Japan and the United States are not injured.”

“Never has there been a visit (by a Japanese prime minister) to the United States as important as this one,” Nakasone said.

He did not mention it, but the House of Representatives is expected to enact a protectionist omnibus trade bill Thursday, the day he holds his first meeting with President Reagan and attends a formal state banquet at the White House.

The bill is expected to include an amendment submitted by Rep. Richard A. Gephardt (D-Mo.) that would force Japan and other countries with “unfair trade practices” to slash their surplus with the United States by 10% a year, or face retaliation.

“I am aware that American public opinion is very severe toward Japan, and I am deeply distressed by the present situation,” he said.

The prime minister said his government will be working “right up to the time of my departure” to put together solutions to trade disputes. He also said he will announce in Washington what he called “dramatic measures” for Japan to increase its aid to developing nations.

Although Nakasone mentioned no figures, a high official of the ruling party said Japan was considering a plan to recycle between $25 billion and $30 billion of new Japanese funds to developing nations within the next three years.

But he made it clear that he will tell Reagan and Senate and House leaders that it will take the efforts of both countries to correct the trade imbalance, which last year reached $58.6 billion. The United States, he said, must reduce its budget deficit and improve its competitiveness.

Later, when asked how he intends to convince American leaders that his promises of future Japanese actions are “not mere lip service,” Nakasone responded more forcefully.

Criticizing the United States for failing to carry out its “commitment” to reduce its budget deficit, Nakasone also noted that Japan’s imports from both Europe and the newly industrializing countries of Asia have increased rapidly recently, with Japan’s purchases from those countries rising by 45%.

U.S. Exports Still Weak

“However, American exporting power to Japan remains weak”--with U.S. sales here still sluggish, he said. “The United States must make efforts to improve its competitiveness.”

He also cited coking coal as an example of insufficient U.S. effort to reduce the U.S. trade imbalance with Japan.

“We are making efforts not to let coal imports (from the United States) fall below 10 million tons,” Nakasone said. But the United States is making little effort to make it easy for Japan to hold up its imports of American coking coal, as both congressmen and Reagan Administration officials have urged.

40,000 Jobs Cut

Japanese steelmakers, he noted, are being forced to cut 40,000 jobs, have idled six blast furnaces and are about to close down two more.

Purchases of coking coal from the United States, which amounted to 12.8 million tons last year, have been declining steadily. In 1982, the peak in recent years, Japan bought 29.3 million tons from the United States.

Nakasone said he would like to solve, or open the way toward solving, demands by American companies to participate in the construction of a new $7-billion Osaka airport, for increased purchases of American supercomputers by universities and government agencies, lowering of chocolate tariffs and other individual disputes.

Naksone was noncommittal on policies to expand Japan’s domestic demand, a matter termed “the most vital” issue for Nakasone by both U.S. Trade Representative Clayton K. Yeutter and Shintaro Abe, chairman of the ruling Liberal Democratic Party’s General Affairs Council.

No Comment on Budget

He said he could not comment on the size of a supplemental budget the ruling party has promised to enact later this year because the regular fiscal 1987 budget is still under deliberation in the upper house of Parliament.

“If I mentioned specific details, the opposition parties would demand that the budget be revised or rewritten,” he said.

After final passage of the budget in late May, the government will immediately approve a set of “emergency economic measures,” including a supplemental budget, he said.

Abe, who visited the United States last week as Nakasone’s envoy, returned Saturday and reported that Congress has “strong distrust” of Japan’s promises.

Measures Nakasone will explain in Washington to expand demand in Japan are of “critical importance” in determining whether Nakasone’s trip will be successful both to the Reagan Administration and in easing protectionist sentiment in Congress, the former foreign minister told Nakasone. He advised the prime minister to take with him specific figures on plans for a tax cut and how much the government will spend in a supplementary budget to be adopted later this year.

Wants Tariffs Withdrawn

Nakasone said he will ask Reagan to withdraw “as quickly as possible” the tariffs the President imposed April 17 on three categories of Japanese electronics products in retaliation for Japan’s alleged failure to carry out an agreement on semiconductor trade signed last Sept. 2.

“Japan has increased its imports of American semiconductors,” he said, “and is supervising exports to third-country markets. . . . We have full confidence we can provide clear evidence” that American complaints about Japanese dumping in third-country markets and access for American chips to the Japanese market have been solved.

Nakasone, who spoke in Japanese throughout the news conference, said the words, “clear evidence,” in English.