Japan May Lift Quotas on 12 U.S. Farm Items

Prime Minister Noboru Takeshita strongly indicated Saturday that Japan is ready to open up its market to imports of 12 farm products on which the United States has accused Japan of illegally maintaining restrictive quotas.

It was the first time in discussion of the controversial issue that any Japanese official had publicly gone beyond an offer of expanding quotas on products ranging from peanuts to tomato juice.

Takeshita, elected prime minister by Parliament on Friday, told a nationally televised news conference: “Under the philosophy of free trade, the people who have received the greatest benefit of all are the Japanese people. Supported by free trade, we have been able to establish today’s prosperity.

“As a result, it is only natural we enforce an open structure. Therefore, if the two countries persevere in carrying out thorough discussions (on the 12 farm products) among experts, I think a kind of consensus can be reached.”

The new prime minister said he had instructed Agriculture Minister Takashi Sato to study immediately whether budget funds might be needed to assist Japanese farmers who would be hurt by imports of any of the 12 products.

Takeshita did not spell out what kind of “consensus” he thinks American and Japanese experts might reach or whether he is prepared to go beyond a decision already made by Agriculture Ministry bureaucrats. The ministry was reported ready to offer to lift quotas on “a rather large portion” of the 12 disputed items if the United States agrees to drop the complaint to the General Agreement on Tariffs and Trade (GATT) it filed in July, 1986.

The U.S. Trade Representative’s Office has insisted that Japan agree to lift quotas on all 12 products.

Legality of Quotas in Doubt

GATT officials already have informed Japan that they will declare 10 of the 12 quotas illegal under the trade watchdog’s regulations and rule that the legality of quotas on the other two items is questionable.

U.S. officials have acknowledged that the dispute over the 12 products is a “small issue”--worth only about $80 million in additional American exports--in the midst of the United States’ $60-billion trade imbalance with Japan. But the emotional overflow from the dispute has turned it into one of the largest irritants in U.S.-Japan relations.

Takeshita reinforced his remarks on farm trade, the most specific in his 70-minute news conference, by saying later that “I must ask the people for a transformation of consciousness.”

“Now that we have reached the point where, at least in terms of per capita income, we are the top economic nation in the world, there are international roles which only we can play--not because we have been subjected to foreign pressure, but because it is only natural. I must ask for that transformation of consciousness,” he said.

Push for Economic Growth

He described economic frictions as an arena in which “foreign and domestic policy are one entity” and said he saw a role for himself--and his widely touted ability in adjusting conflicting interests--in tackling such “foreign-domestic issues.”

Defense budgets, which from 1976 until this year were politically limited to 1% of the gross national product, should be fixed on the basis of defense plans, “not on the basis of a comparison with the GNP,” he said.

He pledged to implement a 1988 budget that will promote economic growth at home but said he will maintain curbs on non-investment expenditures. Many administrative reform tasks, including deregulation, remain to be carried out despite the successes of his predecessor, former Prime Minister Yasuhiro Nakasone, he said.

Tax reform and curtailment of skyrocketing land prices will be priorities of his government, he said.