U.S. Sees Encouraging Signals in Japan

The Bush Administration was optimistic Wednesday over signs that the Japanese government may be moving decisively to ease growing U.S.-Japanese trade frictions, but officials here declined to speculate about what concessions, if any, Tokyo might offer.

Washington’s heightened hopes followed reports from Tokyo early Wednesday that Prime Minister Toshiki Kaifu had summoned his finance, trade and foreign ministers for emergency consultations on how to respond to U.S. demands.

The Administration has been mounting an intensive campaign to persuade Japan that mounting resentment in America to Japan’s trade policies and business practices could sour broader U.S.-Japanese relations and that Tokyo must open its markets more fully for its own good.

Bush warned Kaifu at their summit in Palm Springs earlier this month that Washington would have to retaliate if Japan continued to stall in current negotiations, and he reiterated the message to Kaifu’s political mentor, Noboru Takeshita, who visited here on Monday.

Bush sought a political commitment from Kaifu that Japan would be more forthcoming in responding to U.S. demands--including repealing a law that limits the opening of big retail stores, improving antitrust enforcement and spending more on public works.

The United States also has demanded that Japan ease restrictions on Japanese purchases of U.S.-made satellites, supercomputers and forest products. Negotiations on those issues, which are being handled in separate talks, are continuing here this week.

The meeting Kaifu called on Wednesday included his government’s three top diplomatic and economic officials--Foreign Minister Taro Nakayama, Finance Minister Ryutaro Hashimoto and Trade Minister Kabun Muto. Such sessions are unusual except in serious emergencies.

Both U.S. and Japanese analysts said the move appeared to reflect a recognition by Kaifu and other Japanese leaders that some response was required--and urgently. On Tuesday, Kaifu called a meeting of the full Cabinet to debate the U.S. demand for trade concessions.

The sessions followed a flurry of other developments that appeared designed to pave the way for a possible shift in Japanese public sentiment, which previously has viewed the U.S. demands as unwarranted and evidence that America was slipping as an economic power.

In a significant turnabout, the Keidanren--Japan’s most influential business group--published a report that strongly endorses the kinds of changes that the United States is seeking in Japan’s own domestic market, saying they bolstered the Keidanren’s own call for deregulation.

And Wednesday, Kaifu was quoted as having told his Cabinet, “We should do (what the Americans are suggesting) for our own interests”--the first time that notion has been underscored so prominently by Japanese officials.

Nakayama warned separately that trade frictions between the two countries were “in a hair-trigger situation.

Deterioration of sentiment toward Japan appears to be spreading nationwide,” he said. “We should recognize this as a matter of crisis control.”

U.S. Commerce Secretary Robert A. Mosbacher is in Tokyo this week to bolster the U.S. campaign to get Japan to overhaul its economic and business practices. Mosbacher also signed a U.S.-Japanese accord designed to promote more U.S. imports there.

Meanwhile, the lower-level talks here involving trade in satellites apparently hit an impasse Wednesday, raising the possibility that the United States may have to impose retaliatory sanctions unless the two sides can reach agreement later this month.

The Administration is facing a series of such deadlines over the next few weeks under the Omnibus Trade Act that Congress enacted in 1988. It also is trying to wrap up broader-scale economic talks, known as the Structural Impediments Initiative, by midsummer.