Bush and Kaifu Meet on Trade, Economic Issues

President Bush and Japanese Prime Minister Toshiki Kaifu began two days of talks Friday designed to spur faltering trade and economic negotiations between the two countries and dampen rising resentment in the United States over growing Japanese economic power.

The meeting, suggested by Bush a week ago, started Friday afternoon with an introductory session and a private dinner. Today, a bevy of top Cabinet officers, including Secretary of State James A. Baker III, is expected to join in.

In one surprise development that could portend an agreement on how to get the economic talks off the ground, the Administration delegation at the summit included a team of high-level U.S. officials who had been serving as chief negotiators in the broader trade negotiations. Earlier, they had been expected to remain in Washington.

Bush greeted Kaifu in a brief--and wind-swept--arrival ceremony under sunny skies at the Palm Springs airport. The two then went by limousine to the Morningside Country Club in nearby Rancho Mirage for their initial round of talks.

Their dinner Friday night was at Sunnylands, the Rancho Mirage estate of former ambassador and publishing magnate Walter H. Annenberg. Bush had planned to spend the weekend on vacation as Annenberg’s guest until the meeting with Kaifu was scheduled.

Administration strategists say the White House has two goals in this weekend’s sessions: It is seeking a political commitment from Kaifu for more visible progress in the current trade talks. And it is hoping to deflect mounting tensions in Congress by spotlighting Japan’s role as a global partner.

Kaifu, speaking to reporters aboard his chartered jumbo jet en route from Tokyo, reiterated his strong support for the broad-scale trade and economic talks, calling them “very important” and pledging to “do my best to promote the talks.”

The meeting between the two leaders comes at a time of increasing trade frictions between the two countries and growing impatience in each country over perceptions that the other is not doing enough to resolve the situation. Americans view Japan as intransigent on opening its markets to imports, while Japanese believe that the United States is failing to cut its budget deficit and spur greater saving.

Moreover, unless Japan makes some concessions on current trade disputes, the Administration may be forced to “retaliate” against Tokyo under the 1988 Omnibus Trade Act by imposing tough sanctions restricting Japanese imports. The law sets a series of deadlines for such decisions over the next three months.

By mutual agreement, the agenda will not be limited to trade problems. Instead, the two men will discuss a wide variety of trade and economic issues, from security interests in Asia to the Western response to developments in Eastern Europe and how to deal with Third World debt.

A senior official of the Japanese Foreign Ministry, speaking aboard the Kaifu plane, told reporters that the two men would talk today about trade and economic issues and about heightening “the global partnership” between the two countries on issues such as narcotics, the environment and aid to Third World countries.

U.S. officials say the two sides plan to emphasize how well the two countries have worked as partners in each of these areas. Japan, for example, has pledged to contribute $10 billion to support the Administration’s Third World debt-reduction plan and has agreed to join in shouldering the burden of financing the emerging East European democracies.

However, U.S. officials say that while the two leaders are not expected to negotiate any detailed trade accords, Bush plans to press Kaifu to commit Japan publicly to being more “forthcoming” in the trade talks currently under way. And Kaifu, who was a virtual unknown in Japan only a few months ago, is seeking to bolster his political position at home after his party won a decisive victory in an election for the lower house of Parliament on Feb. 18.

The trade talks that U.S. officials say are faltering involve a series of separate negotiations on steps that each country can take to help reduce the huge $49-billion trade deficit that the United States has with Japan. Washington wants Tokyo to end bid-rigging and collusive business practices, revamp the country’s pricing system, eliminate barriers that foreigners face when they want to distribute their products in Japan and open up more farmland for urban use to help lower real estate prices.

Japan wants the United States to reduce its budget deficit, improve its education system, step up training for manufacturing jobs and do more to spur saving to provide capital to finance needed investment.

There also are separate negotiations aimed at resolving disputes involving trade in supercomputers, satellites, forest products, telecommunications equipment and ships.

U.S. Trade Representative Carla A. Hills, who also is attending this weekend’s meetings, has asked that Tokyo outline a “blueprint” by early April for the steps it plans to take under the broader talks. The negotiations end in June.

Bush arrived here Friday afternoon after a day and a half in Los Angeles, during which he delivered a series of crime and drug abuse speeches.

PRAISE BY PRESIDENT--Bush lauds TV use of cartoon heroes against drugs. A9