Japan Will Let U.S. Firms Bid on Construction Jobs
In an attempt to defuse an increasingly volatile trade issue, U.S. and Japanese officials Tuesday announced a plan that would allow American builders to bid for billions of dollars of construction work in Japan, including airports, roads, bridges and buildings.
The accord came after two years of on-and-off negotiations, prompted by growing White House protests that Japan was unfairly blocking U.S. firms from participating in more than a dozen major jobs involving $25 billion or more in contracts.
Only the broad outlines of the agreement were made available, but U.S. Trade Representative Clayton K. Yeutter told reporters in Washington that the pact represents a “fruitful conclusion” to prolonged and difficult talks between the two nations over U.S. access to lucrative Japanese government projects.
For awhile Tuesday the conclusion seemed uncertain, as Japanese negotiators delayed Yeutter’s news conference while they re-examined details for half an hour, prompting Yeutter to ad-lib that “it might take another two years.” In contrast to previous hitches, however, an agreement was reached.
“It is my great pleasure to see a settlement that is amicable, mutually satisfactory and fruitful,” declared Ochiro Ozawa, Japan’s chief negotiator.
The construction dispute has become increasingly significant in recent months as Japan has devoted growing amounts of money to large public works projects that have been off limits to experienced U.S. firms conducting business throughout the world. In particular, the Reagan Administration has argued for an American role in the Kansai airport being built near Osaka. Other projects specifically mentioned in Tuesday’s agreement include a causeway in Tokyo Bay, coastline development, a headquarters building for Nippon Telegraph and Telephone and a research center in the Osaka-Kobe area.
The agreement does not guarantee work for Americans but is supposed to make it easier for U.S. companies to make bids and compete for contracts alongside Japanese firms. “Our side feels fairly good about the outcome of these talks, but the real proof of access will be in the future,” Deputy Commerce Secretary W. Allen Moore said.
Moore added that Commerce Secretary C. William Verity Jr. plans to invite the heads of major American construction companies to Washington soon to “urge them to take advantage of what we sincerely believe is a real opportunity.”
Japan has been spending more money on large public works projects, partly to stimulate its own economy rather than depend on export sales. U.S. officials have applauded those efforts, which stand in marked contrast to the more cautious economic approach of West Germany and other European nations.
Al Donner, a spokesman for the Bechtel Group, a large construction and engineering firm based in San Francisco, said that according to industry estimates, Japanese spending on such projects could total from $60 billion to $200 billion in the next 10 years.
Donner said he was not ready to comment on Tuesday’s announcement. But he noted, “It (Japan) is obviously an important market, and we feel we have a lot of skills that we can bring into that market in various areas, such as power plant work and transportation work.”
Although Japanese firms are estimated to have had $3 billion in construction business in the United States last year, U.S. firms got only a negligible amount of work in Japan, according to American officials. The Japanese had maintained that U.S. firms lacked the experience needed to do construction in Japan.
Congress Retaliated
Unconvinced, Congress retaliated last December by passing a law that prohibited Japanese construction firms from bidding on projects financed by U.S. government funds.
More recently, Japan offered to allow Americans to bid on six projects. The United States rejected that offer earlier this month, however, and hinted of possible further retaliation against Japan. Last year it imposed punitive tariffs on Japanese personal computers, color television sets and hand-held power tools in response to alleged unfair trading practices involving semiconductors.
Robert M. Davidson, executive vice president of Parsons Corp., a large engineering and construction firm in Pasadena, said he awaited more details of Tuesday’s accord, but he emphasized the importance of Japan’s allowing American firms to compete in the engineering work as well as in building.
“It’s one thing to put down cement,” he said. “It’s another to design terminals, buildings, the baggage handling. We’re interested to see if the engineering side is going to be opened up.”
