Bush Keeps Japan Off ‘Hit List’ : Trade: The President points to recent agreements by Tokyo to open the market to American products. India is the only country on the Administration’s list of those with unfair trading practices.

President Bush, ignoring congressional pressure, announced Friday that he has decided not to place Japan on a “hit list” of countries with the worst trade barriers against U.S. products.

India is the only country his Administration has decided to keep on its list of nations targeted for unfair trading practices, Bush said in a statement.

Bush hailed what he said was recent progress in easing U.S.-Japanese trade frictions.

“Promoting a vibrant, open trading relationship with Japan remains a key trade priority of the Administration,” Bush said.

A recent agreement with Japan that included Japanese concessions on opening its markets to more U.S. goods was a “promising start,” he said.

At the same time, Bush said, he was under no illusion that the agreement alone would “lead to an immediate improvement” in this nation’s $49-billion trade deficit with Japan.

But, he said, he was persuaded that Japanese Prime Minister Toshiki Kaifu and other Japanese leaders “share my commitment to ensuring that trade strengthens, rather than undermines, the friendship between our nations.”

A year ago, the Administration named Japan, Brazil and India as the countries with the most offensive barriers to American trade.

Japan and Brazil have won praise from the Administration for making significant concessions during negotiations aimed at opening their markets to American products.

But India, which was cited last year for a ban on operations of foreign private insurance companies and for controls on foreign investment that distort trade, has refused to make concessions.

U.S. Trade Representative Carla Anderson Hills said that India was targeted again because it has the most trade barriers of any non-communist country, and negotiations over the last year had made no progress.

Several members of Congress had warned the Administration that it would be making a serious mistake if it failed to target Japan once more as a way of keeping pressure on the country to honor its market-opening commitments.

But Hills rejected these arguments, saying that the Administration needed flexibility in its negotiating efforts with other countries.

“We believe we have made enormous progress with Japan in the last few months,” she told reporters.

Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.) said he was glad that the Administration had at least issued a new Super 301 list, although he was disappointed that Japan was not included. The 1988 trade law is known as Super 301.

“There has been little improvement in our trade deficit with that country, and I am a bit of a skeptic as to whether the recent agreements will make much of a difference,” Bentsen said in a statement.

The 1988 trade law required the Administration to issue a target list of countries with the most offensive trade barriers in 1989 and 1990.

“Let there be no mistake,” Bush said. “This Administration is committed to free and fair trade. We want open markets and fair treatment for our products, services, investment and ideas.”

Bush said he had also directed Hills to “give her highest priority” to seeking a conclusion by December of international trade liberalization talks now under way in Geneva.

Sources said India’s refusal to seek a negotiated settlement of last year’s trade case prompted the Administration to cite India again.

While the designation of India was likely to meet with approval on Capitol Hill, the refusal to cite Japan was certain to raise heavy protests.

Many members of Congress said that a failure to cite Japan would indicate that the Administration is not interested in carrying out the requirements of the toughest section of the 1988 trade law. The law provides a tight timetable for negotiating away barriers and provides for economic sanctions if the talks prove unsuccessful.

They said Super 301 was written with Japan in mind and that Japan needed to be targeted again to ensure that it lived up to its new-found willingness to lower trade barriers.

In the days before the decision was announced, Hills lavished praise on both Japan and Brazil for their willingness to negotiate in good faith and said that citing Japan again could provoke a backlash in Tokyo, where the Kaifu government has been pushing to change Japan’s trading practices.

In Japan’s case, there has been a flurry of trade agreements over the last month. Japanese negotiators agreed to open their markets for the sale of U.S.-made satellites, supercomputers and forest products--the three product areas cited in last year’s Super 301 case.

In addition, Japan and the United States earlier this month completed an interim agreement designed to attack broad-based structural barriers that are preventing American and other foreign companies from doing business in Japan.

Hills praised Brazil for undertaking a “fantastic change in policy” under newly elected President Fernando Collor de Mellor.

Brazil has agreed to cut protectionist barriers and submit for international settlement the licensing restrictions on imports cited by the United States in last year’s complaint.