Kaifu Issues Appeal for Understanding on Reform : Japan: The prime minister acknowledges that ‘some pains’ will have to be borne to make the accord work.

With a major U.S.-Japanese trade agreement in hand, Prime Minister Toshiki Kaifu appealed to the Japanese people today for “understanding and cooperation” in carrying out sweeping changes in Japanese business practices.

Kaifu said at a nationally televised news conference that Japan has agreed to U.S. demands for a series of reforms in order to raise Japanese living standards and “maintain friendly relations” with the United States.

The agreement, announced simultaneously in Tokyo and Washington, averted a crisis in relations between the two countries and enabled Kaifu to survive a challenge second only to what he overcame in last February’s election.

Responding favorably to the announcement, both the yen and prices on the beleaguered Tokyo Stock Market spurted upward in early trading today.

Kaifu said the reforms must be carried out if Japan is to survive “as a member of international society.”

Asked how he intends to win enactment of reform legislation in the upper house of Parliament, in which his party lost its majority last July, Kaifu responded:

“You and I, all of us, are consumers. To think of consumers is to think of the people, the starting point of democracy. (These reforms) are not a matter of conflict of interest groups.”

Kaifu acknowledged, however, that “some pains” will have to be borne.

“But (these reforms) are needed to preserve our national interests and to carry out our duty to international society,” he said. Japan, he added, must bring itself into harmony with the rest of the world.

“As an international nation dependent upon trade and coexistence with other countries, Japan cannot survive in isolation,” he declared.

The unusual appeal underscored Kaifu’s own awareness of the problems that lie ahead. Referring to one of them, he promised that his government will carefully consider measures to aid small shopkeepers as a result of concessions to the United States.

Even before the Cabinet approved the agreement at an early morning session, Rokuro Ishikawa, chairman of the Japan Chamber of Commerce and Industry, condemned a decision to lift restrictions on the establishment of new supermarkets and department stores in large cities.

“The 1,620,000 small retailers in Japan . . . have built up traditional community societies throughout the country,” he said. “If large stores are established in a concentrated and disorderly fashion, tiny shopkeepers will be plunged into despair and confusion. Bankruptcies and abandonment of operations may occur.”

Ishikawa called revision of the Large Retail Store Law to remove “specific areas”--phrasing that was understood to mean mainly Tokyo, Osaka and Nagoya--from its application is a “problem.” He also condemned Kaifu’s promise to “review” the law in the future.

Katsuichi Yamamoto, head of a nationwide organization of neighborhood shopkeepers, Thursday reversed his organization’s earlier opposition to revision of the Retail Store Law and said it would not fight an exemption for supermarkets and department stores in the centers of Japan’s major cities.

Kabun Muto, minister of international trade and industry, and Ryutaro Hashimoto, minister of finance, told Parliament on Thursday that special measures will be proposed to aid small shopkeepers after the law is revised.

Naohiro Amaya, head of the Dentsu Research Institute and a former international trade and industry official, said he felt that the United States is placing excessive expectations on reform of the Large Retail Store Law. Japanese imports, he predicted, will not increase substantially as a result.