Angry Yeutter Threatens Japan With Retaliation in Farm Trade Dispute

Angered by Japan’s refusal to allow unfettered imports of American beef and citrus products, U.S. Special Trade Representative Clayton K. Yeutter on Wednesday threatened retaliation if the dispute cannot be settled quickly by an international trade panel where both sides have agreed to seek a ruling.

“My patience as a negotiator has come to an end,” Yeutter told a news conference one day after the two nations broke off talks on opening Japanese markets to more U.S. beef and citrus.

The United States, which sells about $600 million worth of the two products to Japan each year, sought open markets, which it believes would boost sales to $1.1 billion.

Instead, Japan offered merely to phase out market restrictions. But the increase next year under the Japanese formula would come to just one Big Mac, one quarter-pounder and two six-ounce glasses of orange juice for each resident of Japan, U.S. trade officials said.

Experts Will Decide

If the United States had proposed to Japan a similarly restrictive plan for automobiles, Yeutter said, “the entire nation of Japan would be inflamed and infuriated.”

Japan has agreed to submit the dispute to a panel of experts in Geneva under the General Agreement on Tariffs and Trade, the international system for regulating trade. Yeutter hopes that the GATT panel will direct Japan to liberalize its market restrictions.

If Japan does not accept the panel’s directives, it will be required by GATT regulations to compensate the United States for the value of lost export sales or suffer trade retaliation.

“We will not tolerate stalling” by Japan in dealing with the GATT inquiry, Yeutter said. “We do not want (the dispute) to spill into the next Administration.”

He did not indicate precisely what the United States might do, but the suggestion was unmistakable that action could be forthcoming against Japanese products sold in the United States.

A four-year agreement regulating beef and citrus quotas expired March 31, and the United States insisted that all import restrictions by Japan should be abolished after that date.

Offers Considered Weak

“We are firm in our position that the import quotas on beef and citrus products and related measures that restrict consumer access to imports be removed,” Agriculture Secretary Richard E. Lyng said in a statement issued Wednesday. “Both Ambassador Yeutter and I have repeatedly told the Japanese that we will not negotiate a new agreement that does not provide for complete liberalization.”

For citrus products, Yeutter said, the Japanese offered to eliminate quotas on citrus over five years, and that, he added, is “far too long for a program that should have been phased out on April 1.”

For beef, the Japanese promised to end quotas in three years. However, Yeutter said the Japanese proposed a complex new program that would be “just as onerous” as the current system.

The new program would include a variable tax that would keep American beef priced so high, Yeutter said, that Japanese consumers would not buy it. He described the Japanese plan as the kind “you are likely to see in lesser-developed countries where the government is trying to constrain imports.”

Under the Japanese plan, Yeutter said, “U.S. exporters and Japanese consumers would continue to bear the cost and burden of Japan’s insistence on constraining agricultural imports.”

Although Yeutter had harsh words for Japan on the beef and citrus issues, he was sanguine about the friendship between the trading partners. “I am still very comfortable with the state of Japanese-American trading relations,” he said.

Yeutter said South Korea, which has banned beef imports for two years, has also agreed to accept a GATT panel to settle its disagreement with the United States, which seeks access to the South Korean market.