Japan to Import More From Asia : White Paper on Trade Also Calls for Better U.S. Products

The Japanese government promised Tuesday to import more of its Asian neighbors’ products and at the same time urged the United States to improve the quality of its products in an effort to become more competitive.

A white paper, or policy statement, on trade prepared by the Ministry of International Trade and Industry and approved by Prime Minister Noboru Takeshita’s Cabinet said some Asian countries have depended heavily on exports to the United States but that as the United States seeks to correct its trade imbalance “these countries will find it difficult to continue their reliance upon the American market.”

Japan, the white paper said, must fill the gap by absorbing more imports from its neighbors, offering them more technology and economic assistance, and introducing Japanese management skills through more direct investment to help transform Asia into a “growth center” for the world.

The paper warned that the decrease in the dollar’s value in relation to other currencies, a development that makes American goods less costly abroad, will not be enough to substantially reduce the U.S. trade deficit.

The United States, it said, must take steps to tighten domestic demand, to “expand its productive capacity and become more competitive in terms of quality and other aspects besides price.”

Japan must increase its imports, the paper said, particularly from other Asian countries, and must provide a stable supply of capital to debtor nations.

Atsushi Oi, director of the ministry’s trade research office, said: “What we especially want to emphasize is that, despite improvement in the U.S. trade imbalance, many problems still remain.”

The white paper described the problems in this way:

“Despite the dollar’s substantial depreciation, the United States has not yet recovered sufficient competitiveness in goods for which quality and other aspects beside price (are important).”

“Investments for expanding productive capacity have been inadequate.”

“It is essential for the United States to correct its economy’s structural tendency toward excessive demand, an important factor contributing to the trade imbalance.”

“Lack of an export mind.” American exports amounted to only 4.8% of the American gross national product last year, compared to 6% in 1980.

Oi cited passenger cars, electric machinery, office machinery, industrial equipment, metalworking machinery, farm machinery and power-generating machinery as fields in which American competitiveness had either declined or showed minimal gains in 1987.

The white paper singled out the “accumulation of U.S. foreign debt” as “the main factor contributing to unstable exchange rates.” The U.S. international debt problem, it said, must be “resolved promptly, along with the debt problems of developing countries.”

It said America’s “twin deficits,” in the government budget and in trade, were being transformed into a “triplet deficit” by a decline in savings that has produced red ink in private net savings.

Oi said the United States must lower its dependence upon imports. More supply capacity, he said, will be needed to raise exports as a percentage of the U.S. gross national product.

Although Japan’s global trade surplus set another record of $96.5 billion last year, the trade ministry expressed satisfaction that increased imports had already succeeded in turning Japan into a country that will continue to grow through demand at home, not abroad, as it has for the past two years.

Imports from the United States rose only 8.4% in 1987, but those from South Korea, Taiwan and Hong Kong rose by 50.3%, the report noted. Overall, manufactured goods accounted for a record 44.1% of total imports.