Kaifu Promises Bush Serious Action on Trade

President Bush and Japanese Prime Minister Toshiki Kaifu agreed Friday that the United States and Japan should resolve their trade and economic problems quickly so that they can build a “global partnership.”

At the start of two days of talks in Rancho Mirage, near Palm Springs, Bush urged Japan to be more forthcoming in a series of trade and economic negotiations designed to eliminate “structural impediments,” and also in talks over trade disputes involving forest products, satellites and supercomputers.

Kaifu responded by saying, “I will tackle (these cases) seriously,” Japanese officials said.

Although Kaifu did not provide any details of what concessions Tokyo might offer, his response was the most forthcoming by any Japanese official since the United States threatened retaliation over the three products almost a year ago.

Washington has contended that Japan has been acting unfairly by restricting purchases of U.S.-made satellites and supercomputers and forest products.

Until now, Japanese officials have refused to recognize the three trade complaints as legal, and they have declined to negotiate formally over them. Talks that have occurred were carried on under the guise of “discussions.”

Japan has said the United States was acting unilaterally in threatening to retaliate if the negotiations failed. Presumably, Kaifu’s public promise to tackle the issues “seriously” could help move the talks forward.

Japanese officials said Kaifu’s pledge to deal with U.S.-Japanese trade problems seriously also would extend to the broader so-called “structural impediments” talks now going on. Those talks are aimed at correcting economic problems in each country that are worsening the trade imbalance.

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

Washington wants Japan to end bid-rigging and collusive business practices, revamp its pricing system, eliminate barriers that foreigners face when they want to distribute their products in Japan and open up more farmland in urban areas to help reduce real estate prices.

Japan, in turn, wants the United States to reduce its budget deficit, do more to spur savings and investment, improve its education system and step up training for manufacturing jobs.

U.S. Trade Representative Carla A. Hills, who joined a dinner that Bush hosted for Kaifu, has asked that Tokyo outline a “blueprint” by early April for the steps it plans to take under the structural talks. The negotiations are to end in July.

The meeting between the two leaders comes at a time of increasing trade frictions between the countries. Americans view Japan as intransigent on opening its markets to imports, while Japanese believe the United States is failing to cut its budget deficit and spur more savings.

Moreover, unless Japan makes some concessions on current trade disputes, the Administration may be forced, under the 1988 Omnibus Trade Act, to impose restrictions on Japanese imports. The law sets a series of deadlines for such decisions over the next three months.

The meeting, suggested by Bush a week ago, started Friday afternoon with an introductory session and a private dinner that included top officials from both sides.

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 Rancho Mirage for their initial round of talks.

Their dinner Friday night was at the Sunnylands, the home of former ambassador to Britain 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.

The White House said Friday that Bush told Kaifu that the summit should “lay the conceptual framework through which the two countries could realize the full potential of the already close bilateral relationship.”

In a mutual effort to stress positive aspects of U.S.-Japanese relations, the agenda will not be limited to trade problems. Instead, the two men will discuss a wide variety of issues, including security interests in Asia, 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 Kaifu’s plane, told reporters the two men will 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 help shoulder the burden of financing the emerging East European democracies.

However, U.S. officials say that although 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.

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