Cultural Hurdles Tripping Up U.S. Efforts to Close Trade Gap : The barriers America faces have as much to do with language as with economics and politics, president of East-West Center says.

Why does the United States have a huge trade deficit with Japan and the rest of the Pacific region? One trade specialist, Victor Hao Li, says the answer starts with these numbers:

About 23,000 American college students were studying the Japanese language in 1986, according to the most recent figures from the Modern Language Assn. of America, an education trade group in New York.

That same year, about 20 million Japanese were studying English at school or on their own, estimated the Nihon Keizai Shimbun, a Japanese financial newspaper.

It’s a contrast in culture that contributes as much to the U.S. trade deficit as the economic and political differences that dominate the trade debate, Li said.

“Is it any wonder that American sellers have difficulty penetrating foreign markets?” Li said in a recent speech to business students at California State University in Northridge. “We do not speak the most important language of all for that purpose--the language of the customer. That is a national scandal.”

The United States might be able to improve its short-term trade posture by raising tariffs, adjusting the dollar’s value in foreign exchange, jawboning foreign nations into opening their markets further or taking other economic and legal steps, Li said.

Cultural Barriers

But the solution to improving America’s trade picture long term, he said, is for the United States, its exporters and its business students to focus on two additional goals: learning more about Asian culture and then learning more about selling in Asia.

“Put another way, a large proportion of the barriers American sellers face is cultural, rather than legal or political,” Li said. “One of the major national tasks of the next several decades is to bring about a new national consciousness about the Pacific.”

Li, 46, is president of the East-West Center, a Honolulu-based research organization that studies issues related to trade, population, agriculture and natural resources. The center is staffed by 300 graduate students--two-thirds from the Far East and one-third from the United States--and its $25-million annual budget is financed mostly by the U.S. government.

Li, who was born in China and whose parents brought him to the United States as a young boy, formerly was a professor of international law and East Asian studies at Stanford University. He has written extensively on trade and legal issues involving China, and also taught law at the University of Michigan and Columbia University, where he earned one of his two law degrees.

In an interview before his speech, Li said he did not mean to “downplay the importance of finance and technical issues” in trying to promote U.S. exports and otherwise lower the U.S. trade deficit. The shortfall reached a record $171.2 billion last year, up 9.6% from $156.2 billion in 1986, according to the Commerce Department.

Inequalities Noted

He also acknowledged the labor cost advantage many Asian countries enjoy over the United States, and he assigned blame to Japan and other Far East nations for being slow to lower their trade barriers.

“It’s clear that the other countries of Asia, not just Japan, have taken advantage of the rules that we helped set up in the 1940s” after World War II, he said. “We were willing to live with their barriers against imports, we were willing to open our markets in an unequal way.”

Those inequalities “do need to be adjusted because the world of the 1980s and ‘90s is not the world of the ‘50s, and that’s fair enough,” he said. “But if we expect in this country that fixing those trade rules and laws is going to solve this problem, we’re not only going to be badly disappointed, we’re going to be mad. And so will our trading partners.”

The United States is not dealing with the “underlying issue, which is the cultural issue,” and American companies and business students “need a large dose of understanding about Asia,” Li asserted.

“Especially in California, the chances that somebody--a business student here--will have some fairly significant dealing with Asia is pretty large,” Li said. “That does not mean everybody’s got to become an Asian specialist. But everybody needs some. Getting some is more than they’re getting now.”

However, “simply decreeing that everybody should teach about Asia won’t do it,” he said of U.S. schools. “You need to help teachers retrain, provide them with incentive to change their ways. If all one focuses on is the curriculum package, that doesn’t mean they will use it, or use it well or will use it for more than a year or two until the next fad comes along.”

Selling Once Was Easy

And after students learn more about Asian culture, they can use that knowledge to help American companies sell their products and services more effectively overseas, he said.

“We don’t work terribly hard at exporting,” Li complained. “In the immediate postwar period, we were so dominant economically and technologically that when we wanted to sell something abroad it wasn’t that hard. ‘Made in the U.S.A.’ was a thing of great value.”

But all that changed over the past three decades. Japanese businesses--which at first “did not know how to sell in the U.S.”--spent years studying the U.S. market to determine Americans’ tastes and then sold successfully, Li said.

“I don’t see either the effort of equivalent size by American companies abroad, nor do I see on the whole that degree of sophistication” in marketing that the Japanese possess, he said.

The United States, he added, “must quickly produce a generation of men and women of the new Pacific who can deal effectively with the region and work comfortably in the region.”