U.S., Japan Negotiators Reach Accord on Trade : Imports: The tentative agreement is a major step in resolving frictions and reducing America’s trade deficit.

U.S. and Japanese negotiators reached tentative agreement Wednesday on the major elements of a set of sweeping new measures to help reduce the $49-billion U.S. trade deficit with Japan--including significant concessions by Japan toward opening its market to more imports.

The 50-page document, which officials said still includes a few, relatively minor “loose ends,” was being quickly reviewed by the Japanese Cabinet in time for another, presumably final negotiating session today.

If Japan approves the proposals, the two sides expect to make the recommendations public sometime today. President Bush and Japanese Prime Minister Toshiki Kaifu are expected to welcome the accord as a major step toward resolving U.S.-Japanese trade frictions.

Officials familiar with the report say it contains some major concessions by Japan on many of the suggestions that the Bush Administration has made for fundamental changes in longstanding Japanese economic policies and business practices.

The proposals include:

Significant deregulation of Japan’s complex system of goods distribution to make it easier for foreigners to sell products in Japan. The move includes a gradual relaxation of current restrictions on the establishment of large retail stores--a law that has impeded sales of imported goods.

Stepped-up enforcement of antitrust laws and tougher penalties to discourage bid-rigging and collusive practices by corporations. U.S. officials say those practices have prevented foreigners from competing against domestic Japanese firms.

A “major commitment”--though apparently without a specific target figure--for sharply increased government spending for public works projects. Besides directly spurring purchases of U.S.-made equipment used in such projects, the resulting increase in overall economic activity is expected to help stimulate demand in Japan for other foreign goods.

A promise by Tokyo to require Japanese businesses to disclose publicly transactions that result from interlocking relationships among companies--known in Japanese as keiretsu --a practice that U.S. officials say shuts foreign firms out.

According to sources in Washington, the document also includes dozens of detailed proposals that, while less dramatic-sounding on the surface, are expected to have an important impact in opening the way for more sales by foreign firms.

One example is a proposed Japanese promise to speed the clearance of imports through the customs and distribution process--a move that could help reduce business costs for non-Japanese firms. Another is to provide more warehouses and airport facilities.

White House officials said Tokyo also proposed a possible solution for resolving a narrower trade dispute involving Japanese restrictions on the import of foreign-milled finished lumber products--one of three specific trade complaints that Washington filed one year ago.

The two sides already have agreed in principle on proposals for settling the two other narrow complaints, involving prohibitions on purchases by the Japanese government of foreign satellites and super-computers. Japan would face sanctions if these were unresolved.

U.S. officials emphasized that the agreement on the broader trade talks--even if ratified by Kaifu’s Cabinet--amount only to an “interim” report, designed to form the basis for still more proposals to be submitted by mid-July.

The talks, known formally as the Structural Impediments Initiative, were proposed by the United States last summer as a way to steer the debate over trade policy away from narrower--and often more-volatile--disputes toward more fundamental policy issues.

This week’s “interim” proposals, the result of several months of intense negotiations, are expected to be substantially more far-reaching and detailed than some critics had expected.

Japan also is expected to call for specific changes in U.S. economic policies, from reducing the federal budget deficit to spurring more saving and investment and overhauling corporate financing. Tokyo also wants the United States to improve its education system.

U.S. officials say it is virtually unprecedented for nations to suggest such sweeping changes in each other’s fundamental domestic economic policies and business practices. Traditionally, such issues are left politely to the home government.

Even so, policy-makers in Washington cautioned that most of the recommendations are longer-range in nature. They are expected to help gradually open Japan’s market, not necessarily to reduce the U.S. trade deficit with Japan overnight.

Analysts say that even more significant than the individual concessions Tokyo has made are increasing signs in Japan that the country finally has begun moving seriously to open its markets--as a result of domestic political pressures as well as U.S. prodding.

Recent polls have shown that Japanese businesses and consumers are both convinced that Japan should open its markets, to help improve Japan’s own living standards. And analysts say the Kaifu government now appears to have made a major commitment to market opening.