Japan to U.S.: Be Competitive, Produce More

Japan, in an annual government report issued today, blamed the U.S. trade and budget deficits for dampening world trade and investment and called on Americans to be more competitive and produce more goods.

The 1988 White Paper on International Trade, submitted to Prime Minister Noboru Takeshita’s Cabinet, also urged Japan to break with its past strategy of emphasizing market share in foreign markets and concentrate on domestic markets.

After the Cabinet meeting, Finance Minister Kiichi Miyazawa said Japan should reduce its dependency on the United States as a market for its exports.

U.S. Imbalances Cited

Miyazawa said sales to the United States should drop to between 25% and 30% of Japan’s total exports, instead of the present 40%, to improve the U.S. $59-billion trade deficit with Japan in 1987.

“International imbalances, especially the internal and external imbalances of the United States, are having a dampening influence on trade and investment by causing exchange rate fluctuations and destabilizing market prices,” the report said.

It suggested that the United States reduce government spending, expand productive capacity and become more competitive in quality and other aspects besides price.

‘Export-Minded Approach’

The United States, burdened with a foreign trade deficit in 1987 of $171.2 billion, “lacks an export-minded approach,” the paper said.

The report calls on Japan to import more from Asian countries and provide economic and technical assistance to the region. It said Asian economies are too dependent on exports to the United States and lack sufficient funds for investment.