Japan Rebuffs Verity Bid to Open Construction Market

Japan’s foreign minister today turned down Commerce Secretary C. William Verity’s request for talks on opening up Japan’s public construction market to foreign companies, Japanese officials said. A spokeswoman for Verity said the secretary will discuss retaliatory steps when he returns to Washington.

The trade friction surfaced in a meeting with Foreign Minister Sosuke Uno, who told Verity that Japan will not open its public construction projects to U.S. companies, a stance Verity has termed “unacceptable.”

U.S. public works projects are open to foreign companies, and Japanese businesses did $120 million worth of public construction in 1985. But the Japanese say “customs and social practices” prevent them from opening their public works projects to U.S. companies.

Retaliation to Be Discussed

Verity was not happy with the Japanese refusal to budge on the issue and will discuss retaliatory steps against Japan when he returns to Washington, his spokeswoman, Desiree Tucker, said.

A Japanese Foreign Ministry official said it would be a “logical consequence” for the United States to retaliate by excluding Japanese construction companies from public projects but added that the effect on Japan would be minimal.

“Our participation in U.S. public works are not very big,” the official said.

Verity also met today with Prime Minister Noboru Takeshita in the first meeting between a U.S. Cabinet minister and Takeshita since he was elected Nov. 6.

Verity told Takeshita that Japan must refrain from its “tendency to organize researchers to go after a key market by using government, industry and the banking system together to create an absolute domination of a foreign domestic market,” Tucker said. “This is not the way to seek export markets,” she quoted him as saying.

Tucker said Verity added that the consequence of such trading practices was the destruction of domestic industries abroad.

She said Verity stressed that Japan should assume more responsibility and work with the United States “toward mutual leadership in the world.”

In meetings with Japanese government and business leaders, Verity also expressed “concern that Japanese people and the government in particular have lost credibility,” Tucker said.

“The perception now is that the Japanese government says it will open up a particular market segment and then delays and delays without taking action,” she quoted him as saying. He said it was “important that the Japanese rectify this perception problem,” the spokeswoman added.

TV Dumping Charged

Verity’s visit comes at a time of renewed tension in U.S.-Japan trade relations following the Commerce Department’s ruling that Japanese companies are dumping, or selling below fair market value, color television sets in the United States.

Tucker said the main purpose of Verity’s four-day trip was “to bring a broad message,” rather than to discuss specific trade issues, and to “set the stage for a new and constructive approach to trade.”

Last year, the U.S deficit in trade with Japan reached a record $58.6 billion, according to U.S. figures. Verity has called Japan’s trade surplus with the United States “unsustainable.”