U.S. Firms Prefer Open Door in Japan Over Protectionism

American business leaders told a Senate panel Monday that they are interested in opening up Japanese markets--not protecting American markets.

Business leaders also told the Senate Finance Committee’s international trade subcommittee that changes are needed on both sides of the Pacific to solve the U.S.-Japanese trade imbalance.

The hearing was called just as negotiators were to resume talks in Washington on removing structural impediments or barriers to trade and investment between the two countries.

“Japan’s systems for buying and distributing goods are the biggest obstacle facing U.S. manufacturers who export or do business in Japan,” said R. K. Morris, director of international trade policy for the National Assn. of Manufacturers.

He and other witnesses complained about Japan’s distribution system under which firms purchase parts and supplies almost exclusively from long-term business partners and companies either make their own supplies or keep a tight rein over their suppliers.

But Morris, who just returned from a monthlong trip to Japan, added: “We should not kid ourselves. We cannot expect real help from the Japanese in reducing their surplus or our deficit unless we in the United States can demonstrate the very great importance we attach to constructive change in this area.”

Mitchell E. Kertzman, speaking for the American Electronics Assn., said: “We believe the imbalance in commercial relations between the U.S. and Japan will destroy the international trading system unless it is effectively addressed.”

He said U.S. electronics exports to Japan are only $6.3 billion a year, compared to $26.8 billion of U.S. electronics imports from Japan.

He also said there must be changes in this country.

A harder line was taken by Texas oilman and sometime corporate raider T. Boone Pickens Jr., who called corporate Japan “a closed shop.”

He said the “most damaging” structural barrier to free trade was Japan’s “cartel-like system of interlocking corporate ownership.”

Because of that, Pickens claimed, “a relatively small group of insiders dictate corporate policy.

He cited his own problems with Koito Manufacturing Co., a Japanese auto headlight maker, are “symbolic of the current trade relations between the United States and Japan.”