Bush to Demand Firm Trade Steps by Japan

President Bush, described as disappointed over Japanese intransigence on trade issues, will demand that Tokyo commit itself to substantial new market-opening steps when he meets with Prime Minister Toshiki Kaifu this weekend, U.S. officials said Sunday.

Although the two leaders are not expected to negotiate any detailed trade accords, U.S. officials said Bush will call on Kaifu to deliver on the kind of market-opening measures that they say Tokyo has been hinting would come after the Feb. 18 Japanese elections.

The two men also will discuss a broad range of national security issues, from how far the United States should go in providing a security umbrella for Japan to how much more Japan should spend on its own to help guarantee the security of Asia.

U.S. officials said the invitation for the talks, proffered hastily by Bush in a telephone call late Friday, is designed to underscore the urgency with which Washington views the deterioration in U.S.-Japanese relations that has occurred in recent months.

They said Bush had been left “enormously disappointed” after a meeting he had with Kaifu on Labor Day, in which they said the Japanese leader seemed to “dance around” U.S. demands that Japan take more steps to reduce trade friction between the two countries.

The session between the two will come at a potentially volatile point in the domestic political climate here. Resentment over Japanese sluggishness in eliminating trade impediments has fueled anti-Japanese sentiment in Congress, raising the prospect of tough new legislation.

Over the next few weeks, the Administration is facing a spate of congressionally mandated deadlines that virtually require it to resolve outstanding trade disputes or else launch new, unfair-trade-practice cases against Japan. In some instances, it would be forced to impose retaliatory sanctions.

At the same time, opinion polls in Japan show that Japanese also are becoming increasingly impatient with the United States, particularly with America’s failure to put its own economic house in order. Many analysts say they fear that the two countries are on a collision course.

U.S. exasperation with Japan was heightened last week at the latest installment of high-level economic talks between the two governments, when Japan failed to deliver as promised serious proposals to meet American demands for more market-opening measures.

Adding to Washington’s anger was that, at Tokyo’s request, the Bush Administration had been holding its fire on trade issues in recent weeks, agreeing to avoid any new pressures that might hurt Kaifu’s party in the Feb. 18 election.

Senior Administration officials said then they had been told by their Japanese counterparts that if the ruling Liberal Democratic Party won a clear enough majority, Japan would proffer some serious proposals to meet U.S. demands in the trade and economic talks.

The high-level economic talks, known formally as the Structural Impediments Initiative, also were postponed until after the Feb. 18 election. Instead, the negotiators met last Thursday and Friday after the Liberal Democratic Party won a 257-seat majority.

“We had been fairly tolerant of their domestic situation,” a senior U.S. official said Sunday.

As it turned out, however, Japanese negotiators offered only modest proposals at last week’s bargaining session, dismissing most U.S. demands as unrealistic and leaving U.S. officials disappointed and angry.

It was then that Bush telephoned Kaifu to ask that the Japanese prime minister meet him in Palm Springs next weekend. Bush had been planning to go there, anyway, for a weekend as the guest of publishing magnate Walter H. Annenberg, but he had not planned to work there.

Strategists said top Administration officials will be meeting throughout this week to help map plans for the summit, which was set up too hastily for the President’s advisers to prepare a detailed agenda.

Among other items, Washington wants Tokyo to alter Japan’s closed-door product-distribution system, end bid-rigging and other collusive practices and overhaul its pricing practices. It also wants Japan to speed up land-reform efforts and boost spending on public works.

In the same talks, Tokyo has called on the United States to spur more saving and investment and to reduce the federal budget deficit--prescriptions that U.S. officials agree are keys to reducing the nation’s trade deficit--and to improve America’s education system.

Besides the broad talks, the two countries also are involved in negotiations over several long-pending U.S. trade complaints, involving Japan’s refusal to buy U.S.-made satellites, supercomputers, forest products, telecommunications equipment and ships.

U.S. Trade Representative Carla A. Hills has said she wants to see Japan unveil a “blueprint” by mid-April outlining whatever policy changes it is planning under the Structural Impediments Initiative talks, and take the first actual steps by late June.

In addition, under the 1988 Omnibus Trade Act, the Administration must decide by April 30 whether to impose retaliatory sanctions against Japan if Tokyo fails to resolve the disputes involving satellites, supercomputers and forest products.

It also must launch a new series of unfair-trade-practices proceedings by that date on additional trade disputes that it has not been able to resolve before--a move that, for political reasons, if nothing else, is likely to include some involving Japan.

And it must issue a report March 31 listing the trade barriers maintained by all the United States’ current trading partners, including Japan--a compendium that is almost certain to help intensify anti-Japanese sentiment in Congress.

“It would just be a whole lot easier for them to do something before all that,” an Administration official said Sunday.

At the same time, Kaifu has hinted he may reshuffle his own Cabinet--a step that is almost certain to affect the talks.

BACKGROUND (Southland Edition) The Bush-Kaifu meeting will come amid anti-Japanese sentiment in Congress and Japanese impatience with U.S. economic problems. Among other items, Washington wants Tokyo to alter its closed-door product-distribution system, end bid-rigging, speed up land reform and boost spending on public works. Tokyo wants the United States to promote more saving and investment, reduce the federal budget deficit and improve its education system. Also in dispute is Japan’s refusal to buy U.S.-made satellites, supercomputers, forest products, telecommunications equipment and ships.