Japan Says U.S. Is No Free Trader : Commerce: Apparently tired of being singled out, it issues a list of alleged American violations. It may mark a new political strategy.

Japan, apparently tired of being singled out as the “bad guy” of international trade, retaliated Monday in a report that accuses the United States of a range of unfair trade practices and violations of international trade rules.

The report, released by Japan’s Ministry of International Trade and Industry, accuses the United State of having restrictive trade policies in nine of 10 broad categories, contrasted with just six categories for South Korea and the European Community.

The report comes several months after President Bush’s trade mission to Japan focused attention on U.S. complaints about Japanese policy in the automobile and other industries.

The report, prepared by MITI’s Subcommittee on Unfair Trade Policies and Measures--composed of lawyers, economists, journalists and business executives--reflects a growing feeling here that Japan is being unfairly singled out as the biggest villain in international trade.

One U.S. official said that while the report did not appear to raise new complaints about American trade policy, it indicated an increasing assertiveness by the Japanese government on trade issues.

“It’s more a political attempt to balance things out rather than make a substantive argument,” said the official, who asked not to be named. “The Japanese have become over the last couple of years . . . more demanding of reciprocal treatment. They feel put upon when we come with trade complaints.” The 200-page report:

* Notes an increase in “Buy American” laws, which restrict government purchases to mostly U.S. goods and services. It also mentions import restrictions in the steel and auto industries, and the “abuse” of anti-dumping laws to block Japanese imports.

* Criticizes U.S. Department of Justice plans to broaden enforcement of antitrust legislation to foreign businesses that block access to their markets, announced in April of this year. The amended policy could hurt Japanese firms. Japan has argued that it is an “extraterritorial application of domestic laws, which is not permissible under international law.”

* Says the Los Angeles Transportation Commission’s decision to rescind a rail-car contract with a Japanese company--Sumitomo Corp. of America--and award it instead to an American firm--Morrison Knudsen Corp.--is an example of international trade discrimination.

* Notes that of the complaints brought before the General Agreement on Tariffs and Trade the past 12 years, 17 were brought against the United States, compared to just 12 against the European Community and eight against Japan.

* Criticizes the U.S. government’s “arbitrary” decision to reclassify sport utility vehicles as trucks rather than passenger cars. That decision boosted the import duty on the vehicles to 25% from 2.5%.

While Japan may have trade restrictions, “to some extent we are all sinners,” the report argues.

“Nobody is an exception when it comes to unfair trade,” says Masakazu Toyoda, director of MITI’s tariff division. Toyoda said MITI would use the report as a basis for filing complaints under the auspices of GATT, a set of international rules designed to promote open trade.

The report appears to reflect a new MITI tactic in the trade wars. Before, Japan has responded to criticism by announcing campaigns to import more goods.

Even this year, MITI is proposing that Japanese companies buy an additional $1 billion worth of products, mostly from the United States, to ward off election-year attacks on Japanese trade surpluses. Japanese executives recently agreed to accelerate purchases of U.S. semiconductors to defuse tension in that area.

But increasingly, those conciliatory measures contain a bitter undertone.

Although the MITI report purports to examine the trade infractions of its 10 largest trading partners, the bulk of the report focuses on American transgressions against Japan.

The report urges trading partners to use GATT’s dispute-settlement procedures rather than unilateral “retaliatory” actions of the kind that the United States frequently engages in. “A government that disregards the dispute-settlement mechanism mandated by the GATT and relies on unilateral action is assuming the dual role of prosecutor and judge,” the report complains.

The report does not discuss agricultural trade issues, the biggest obstacle to the completion of the Uruguay Round of GATT talks. Japan has resisted U.S. pressure to lift its virtual ban on rice imports.

The trade ministry official said the report excluded agricultural trade because there still is no basic agreement on international rules for that area.

The report suggests that “import restrictions should be prevented or redressed through strict application of the Japanese anti-monopoly law” rather than by applying U.S. anti-monopoly law. Yet, Japan’s Fair Trade Commission is widely recognized as being too weak to effectively impose tough antitrust actions.

Perhaps the most damning part of the report is its conclusion that while America imposes restrictions on some 27% of its trade with the rest of the world, in almost no case have those restrictions contributed to the competitiveness of U.S. industry.