Japanese Critic Says U.S. Holds Trade-Gap Key

Shintaro Ishihara, author of the controversial book “The Japan That Can Say No,” has presented his own 109 demands for American economic reform and warned that opening the Japanese market, by itself, would not eliminate the trade imbalance between the two nations.

Ishihara told foreign correspondents Friday that he agrees with U.S. negotiators who are demanding that Japan dramatically increase spending on public works to improve living standards and pull in imports. Japan’s closed markets should also be opened to give Japanese consumers a better life, he added.

But he said that whatever reforms Japan promises to undertake in the yearlong Structural Impediments Initiative talks won’t be enough, by themselves, to reduce the United States’s $49-billion trade imbalance with Japan. The negotiations are designed to remove trade barriers.

“The United States must regain its competitiveness and make products in America that will sell. . . . The United States conducts 10 times the basic research, which is the foundation of technology, that Japan does but cannot turn that research into products. That is the fault of management,” Ishihara said.

“It’s also a fault of the U.S. political system. . . . The U.S. government must get more involved.’

Ishihara, known as a gadfly within Japan’s ruling Liberal Democratic Party, said the LDP, preferring to “leave everything to the bureaucrats,” had snubbed his list of proposed American reforms.

The novelist-turned-politician attracted wide attention last summer when “The Japan That Can Say No,” a book he co-authored with Sony Chairman Akio Morita, was translated into English without his permission. In the book, which stirred widespread resentment in Congress, he advocated that Japan use its technological prowess as a diplomatic weapon.

A sequel, written without Morita, called “Nevertheless, Japan Can Still Say No,” is No. 1 on the Asahi newspaper’s list of best-selling business books.

American and Japanese negotiators will meet here today and Tuesday to work on a final report on the Structural Impediments Initiative talks, which President Bush has made the focus of his economic policy toward Japan.

Ishihara pointed out Friday that American proposals for rejuvenating U.S. industry--the latest is “Made in America,” by the Massachusetts Institute of Technology--have been coming out one after another for more than five years. “But the U.S. Administration and Congress have done nothing to implement them,” he said.

Japanese proposals in the SII talks for American reforms, he complained, have been too moderate and lacked specifics.

Ishihara suggested that the United States spend 5% of its gross national product on education, carry out an “action program” to reduce consumption, enact a national sales tax and offer broad tax exemptions on personal savings--similar to those that Japan abandoned in April, 1988, to promote consumption.

Noting that the United States is demanding that Japanese banks operate their automated teller machines 24 hours a day to promote consumption, Ishihara said ATM operations in the United States should be curtailed to 12 hours a day to restrain consumption.

He also called for “dramatic” cuts in American nuclear weaponry and overseas bases.