Official Sets Modest Goals for U.S.-Japan Trade

U.S. Trade Representative Carla A. Hills said Saturday that the United States expects only a “blueprint” for reform and a “small down payment” in action when a yearlong set of negotiations to remove structural barriers to trade between Japan and the United States end next summer.

The so-called Structural Impediment Initiative, she told a breakfast meeting at the American Chamber of Commerce, is not aimed at getting “definitive action by spring or summer. It is rather to have a blueprint draft . . . and then perhaps to have a down payment to show some small steps to convince the American people and Japanese people that we’re moving in earnest.”

Later, she told a group of American reporters that “I would not dream that the macroeconomic factors (that contribute to the trade imbalance) we’re addressing in the Structural Impediments Initiative will be dramatically changed in the next nine months or 12 months.”

The “down payment” on reforms to be pledged in the negotiations, she said, is needed “to get away from the concern that (might be) expressed that ‘Is this just another report?’ ”

Hills said it might take “several years” to fully remove structural impediments to trade, which include such factors as Japan’s distribution system, business customs and the propensity to save. But she said reforms could bring a “geometric increase in prosperity” in “the next century.”

Her meetings with Japanese officials convinced her that “we can get our report out in time” to meet deadlines that have been set. An interim report is to be produced by March, with the final report due next summer.

Although she called her meetings here “constructive,” Hills admitted that an appointment with Justice Minister Masao Goto was canceled at the last minute. She said she did not know the reason for the cancellation, which was scheduled to discuss discrimination against American lawyers in Japan.

Cancellation of a meeting with a visiting American Cabinet member is extremely rare.

Hills, visiting Japan for the first time since joining the Bush Cabinet, told the American reporters that her visit gave her an opportunity to get to know officials she had not met before. But, when asked to enumerate substantive results, she offered none.

One businessman at the breakfast surprised Hills by telling her that the American Chamber of Commerce had surveyed its members on problems they found with Japan’s distribution system and that “65 of the 70 members who responded said there isn’t any problem with distribution in Japan.”

Hills replied by saying that “foreign companies that have located in a market that is regarded as relatively closed have less of an interest to open that market to newcomers. But our trade policy is that the market must be open to all comers.”

Hills also charged that the U.S.-Japanese semiconductor agreement that the Reagan Administration negotiated in 1986 amounted to “selling ourselves short” by setting a goal for American chip makers to win 20% of the Japanese market by 1991. Their present share is 11%.