AFTERMATH OF THE BUSH TRIP : NEWS ANALYSIS : Disappointment on Both Sides : Neither U.S. Nor Japan Came Away With What It Wanted

The summit between President Bush and Prime Minister Kiichi Miyazawa was originally meant to be a warm and fuzzy affair, an affirmation of common interests, global leadership roles and other soaring concepts that are the stuff of presidential declarations.

But in many ways, what ultimately deteriorated into a testy trade standoff only illustrated the deep, growing differences between the world’s two largest economic powers.

Despite attempts by both sides to put a positive spin on the outcome, with Bush praising the visit as a “success,” it is clear that neither the Americans nor the Japanese got much of what they wanted.

Bush and the American business delegation did not get the sweeping trade agreements that they could say would create jobs and reduce the nettlesome $41-billion trade deficit with Japan. And their tough talk ultimately ended up looking empty because of the widespread perception that they failed to win what they wanted.

The Japanese originally pushed the summit as a way to boost their image as a global player in the wake of the Gulf War, in which they were heavily criticized for not assuming enough responsibility. And so Miyazawa and other leaders hoped to focus on the Tokyo Declaration, which set out a “global partnership” on many issues, and various cooperative efforts.

But Japan’s declaration was all but ignored in the furor over the perceived lack of Japanese concessions in the trade agreements. And that perception, whether fair or not, may reignite calls for retaliatory legislation, an outcome the Japanese had worked to avoid.

“We don’t see an adequate response from Japan to do what we believe is a very logical need for Japan to change its cultural bias” against foreign products, said Dexter A. Baker, chairman of the National Assn. of Manufacturers.

An exhausted Foreign Ministry official, meanwhile, spoke of “lots of frustration” among Japanese for seeing what was supposed to be a friendship mission suddenly turn into a trade showdown. “Some Japanese are not happy to see the results, believing it’s a concession to the U.S. out of pressure,” the official said.

Not all was negative, of course. Real gains were made in several fields of trade, notably auto standards and computer procurement.

Still, the perception that the President’s visit was ill-conceived and poorly concluded is likely to dog both sides and perhaps weaken the relationship it was meant to cement.

The auto issue--which commanded attention because of the Big Three auto executives accompanying Bush and because that industry accounts for three-quarters of the U.S. trade deficit--ended up as the biggest disappointment.

“Close to . . . embarrassingly low” is the way one auto executive described the voluntary agreements by Japan’s five major auto makers to double their purchases of foreign auto parts to $19 billion, as well as to import 19,700 finished cars to sell through domestic dealerships.

In addition, the five major Japanese auto makers, in a press conference Thursday, made it clear that they could not guarantee that the purchases would come from “traditional” U.S. suppliers, as opposed to Japanese-owned subsidiaries in the United States.

Nissan Motors President Yutaka Kume acknowledged that the purchase targets would be “difficult to achieve.” Saying it would be a “lie” to feign happiness over the auto accords, Kume warned U.S. firms that poor quality would not be tolerated.

Detroit executives said they were most upset with Japan’s refusal to adopt any deficit-reduction targets, such as their proposal to pare it over five years, beginning with a 20% decrease.

The distribution commitment “doesn’t sound like a lot of cars,” Chrysler Chairman Lee A. Iacocca said. Ford Motor Co. Chairman Harold A. Poling, asked if he saw anything significant in the accord, said, “Not what I’ve seen so far.”

But the business and government leaders said they were pleased with agreements over certification and standards of auto imports, which should speed up entry of foreign vehicles into the market.

For many Japanese, the Americans’ carping about the auto agreements was particularly upsetting since they see the dearth of American cars in the market as largely the failure of U.S. manufacturers.

Beyond the specifics announced in Tokyo, American auto makers, analysts said, have more fundamental problems in Japan, including their failure to develop a distribution network and their reputation as providers of poor quality cars ill suited to the Japanese market.

“Quite frankly I wonder if U.S. car manufacturers have done serious research on Japanese consumer preferences,” said Kenichiro Ueno, president of the Japan Automobile Dealers Assn.

About half the cars sold in Japan are subcompact and mini-cars--designed to accommodate Japan’s high gasoline prices and the high cost of land for parking lots--that U.S. manufacturers don’t produce, said Richard Recchia, chief operating officer at Mitsubishi Motor Sales of America Inc.

On other issues, U.S. officials were also disappointed by the failure to obtain a specific Japanese commitment to help finance the Texas-based supercollider project. Instead, Bush had to settle for the formation of a “working group” to hammer out a consensus by the year’s end.

Other vague commitments by Americans included Japanese pledges to “reinvigorate” the Structural Impediments Initiative, a process of removing obstructionist business practices and other impediments to free trade. No areas of focus are identified, however.

The same is true for the agreement on paper products, a market divided among a small number of Japanese competitors, with imports having only a 3.7% share. The two sides agreed to find an agreement on how to open the market by the end of March.

On the glass industry, dominated by three suppliers, a Japanese official said the Americans indicated a desire for a “specific objective” for market access similar to the auto accord. They failed to win that target, but they did gain a pledge from the Ministry of International Trade and Industry to encourage foreign glass imports and “facilitate efforts” to increase sales.

But the computer industry was one satisfied exception. The American Electronics Assn. said the computer-procurement agreement would “significantly increase” U.S. access to the $6-billion Japanese government computer market. The Japanese agreed to give foreign suppliers equal access to bids, limit sole-source bidding and keep specifications neutral among all suppliers.

Still, a senior Administration official was unable to point to one concession that would translate into the “jobs, jobs, jobs” Bush had publicly sought.

And even the innocuous Tokyo Declaration disturbed some Japanese officials because of its reference to “economic friction” in a document meant to emphasize cooperation.

Among other things, the document declares that the two sides, as the two largest market economies, “accept a special responsibility for shaping the new era.” It pledges to strengthen the multilateral trading system (a pledge some believed is violated by the auto accords to give preference to U.S. parts and aim for a 70% local content of Japanese autos built in the United States).

Despite the cooperation, officials on both sides say that the U.S.-Japan relationship is destined for permanent change.

Differences between the two countries, while they have always existed, may not be so easily papered over as in the past. For one thing, the Cold War has robbed the two sides of a common enemy, a Foreign Ministry official said. “It is easy to unite against something; it is not easy to unite for something,” he said.

Times staff writers Leslie Helm in Tokyo and Donald Woutat in Detroit also contributed to this report.

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