Mosbacher Warns Japanese on Trade : Retaliation by Congress Possible, U.S. Aide Says

Commerce Secretary Robert A. Mosbacher warned Japan today that Congress may seek economic retaliation if Japan fails to make “measurable progress” in removing obstacles to open trade by next spring.

“If there isn’t progress, both of us, the Japanese government and the U.S. government, face a difficult situation with our Congress,” Mosbacher said.

“And I’m hoping we can work together to avoid these problems. I see no reason why there can’t be measurable progress by spring,” he said.

Mosbacher made the comments to Japanese and foreign journalists at the Japan National Press Club on the second day of a four-day visit to Japan focused on bilateral trade issues and the opening of markets in the high technology sector.

Crucial Trade Talks

His first trip to Japan followed by one week the start of a one-year round of crucial trade talks aimed at breaking down entrenched barriers to more open barter on both sides of the Pacific.

The United States claims that Japan is primarily to blame for a perennial $50-billion trade deficit with Tokyo because of economic practices that restrict the entry of U.S. goods and services into the Japanese market.

Japan argues that Washington shares responsibility for the huge trade imbalance because of its failures to cut its federal budget deficit and fuel its manufacturing industries with the money and expertise to remain competitive.

Under congressional pressure, President Bush last May named Japan as an unfair trading partner and is empowered under the 1988 Trade Act to impose economic sanctions against Tokyo if it fails to remove trade barriers.

‘Positive Results’

Although a final report on the trade talks--dubbed the Structural Impediments Initiative--is not due until next summer, Bush has said he expects Tokyo to provide “positive results” by next spring.

Mosbacher admitted during his meeting with journalists that the United States protects some of its own markets, limiting imports of steel, textiles, sugar and semiconductors.

“There are a few (protected industries), but these are exceptions rather than here (in Japan), where they are the rule.

“We are not only the largest, but the most open market in the world and unfortunately, Japan is among the most closed,” Mosbacher said.

He called for Japan to give its consumers “the same freedom of choice and the same benefits” enjoyed by consumers in the United States.

Price Differences Cited

“Why should the Japanese public have to pay over $600 million for a locally developed communication satellite when an American satellite can be purchased for less than half that amount?” he asked.

Mosbacher said a Ford Probe costs about $21,000 in Japan, about three times the purchase price in the United States. A round-trip plane ticket between Tokyo and Seattle also is triple the cost paid in America.

“Why should a Sanyo cordless telephone cost three times as much in Tokyo as it does in New York? It doesn’t make sense,” he said.