Japan’s Building Plan Not Enough: Yeutter

U.S. Trade Representative Clayton Yeutter said today that Japan’s promise to open its construction markets to American companies “does not meet our needs” and that retaliatory sanctions might be imposed.

Yeutter’s comments in a radio interview came a day after Japanese Prime Minister Noboru Takeshita pledged to President Reagan that he would do all he could to resolve the impasse in the construction market issue.

Both Reagan and Takeshita pledged to ease trade frictions between the two nations while announcing a new plan to defend the U.S. dollar from further declines.

U.S. builders are seeking access into the multibillion-dollar Japanese public works market but claim that Japanese restrictions have made it nearly impossible for them to win contracts.

A Japanese proposal presented this week, which had initially been praised by Reagan Administration officials, “is a bit vague in terms of which public works programs are going to be opened up,” Yeutter said.

The proposal does not make clear whether all Japanese projects would be open to U.S. bidding, and also what Japan means in suggesting the bids be made through joint ventures with Japanese firms, Yeutter said in an interview.

“Our preliminary judgment is that the proposal . . . does not meet our needs and that we’re going to have some tough, hard negotiations ahead,” Yeutter said.

From talks with Japanese officials in Takeshita’s party, “indications are the prime minister definitely does want to try to resolve that issue with us,” Yeutter said.

But he added that “we certainly are a ways apart and we’ll have to make our own judgment whether retaliatory action will be needed to achieve that objective.”

Yeutter also criticized the threat by a Japanese agricultural cooperative to reduce its imports of U.S. grain to register its displeasure over what it termed excessive U.S. trade demands.

If the Japanese government is unable to prevent this, Yeutter said, “this would be distressing indeed for us and would likely provoke additional responses from us.”

Reagan and Takeshita disclosed in a joint statement Wednesday that their governments “have developed arrangements” for providing additional funds to support the battered U.S. currency.

The Reagan Administration has long urged Japan to lower its interest rates.