Tokyo Fidgety as Japan Trade Surplus Soars : International commerce: Officials express fear that Clinton could move toward protectionism.
Fears are widespread in Japan that President-elect Bill Clinton may pursue protectionist trade policies, thus worsening Japan’s already tense economic relations with the United States.
The United States continues to run a huge trade deficit with Japan, and some Japanese fear that the continuing U.S. economic slowdown may force Clinton to impose sanctions on Japanese goods as a way to protect American jobs. Such fears were further fueled on Wednesday when Japan announced a record trade surplus--up 29.7% in the six months ended Sept. 30 to a new high of $66.27 billion.
“I hope the United States will uphold the principle of free trade and stand up firmly against rising protectionism,” Prime Minister Kiichi Miyazawa told parliament after speaking to Clinton by phone Friday morning, the Associated Press reported.
Miyazawa said he told Clinton that America’s speedy economic recovery is important because weakness in U.S. employment and productivity could increase pressures to limit imports and take other measures to protect U.S. industries from foreign competition.
Japan is taking heart from Clinton’s proposals to make the United States more competitive in world markets. Clinton’s program of boosting American competitiveness by promoting investment will “lessen tensions arising from the portrayal of Japan as the bad guy,” said Noboru Hatakeyama, vice minister of the Ministry of International Trade and Industry.
However, many here fear that Clinton will be pressured by his fellow Democrats to move toward protectionism when it becomes clear that the “competitiveness” program doesn’t immediately lead to greater American exports to Japan. Among Japan’s key concerns:
* The revival of the “Super 301” clause of the Omnibus Trade Act that requires an American President to retaliate against any nation with closed markets. President Bush let the act expire, but Clinton has expressed support for the Democrat-backed bill.
* Clinton’s talk of raising more taxes from foreign companies is a key concern of Japanese companies that insist they are making scant profits through their U.S. operations.
* There is concern that Clinton’s talk of cracking down on foreign lobbyists could spark a broader anti-Japanese mood.
* Renewed American pressure on China regarding human rights could slow China’s economic growth and interfere with Japanese efforts to forge closer economic ties with Beijing.
In the absence of more concrete information, Japan’s executives are crossing their fingers and hoping for the best.
“I hope that the new Administration will do its utmost to promote free trade through cooperation with other advanced democracies instead of leaning toward protectionist trade practices,” Akio Tanii, president of Matsushita Electric told Japanese reporters.
Japan’s business community has some knowledge of Clinton from reports of business leaders who came to know him when making investments in Arkansas. They give the governor high scores on business acumen, enthusiasm and knowledge about Japan.
“He is a man who listens first, then acts,” says Satoshi Iue, president of Sanyo Electric, which owns a television plant in Arkansas. Iue recalls taking Clinton to a video arcade in Osaka and then singing karaoke with him until 2 a.m. He says he has warm regard for the President-elect.
Matsuichi Nakamura, whose steel-pipe fencing company, Daiwa Steel Tube Industries, was one of the first Japanese companies to invest in Arkansas, counts Clinton as a close friend. “He will say what he thinks, he won’t be bound by traditional Democratic (protectionist) policies,” Nakamura says.
Japan will be looking closely at how the Clinton Administration deals with two key trade questions coming up early in his term. The first will be his stance on the upcoming Uruguay Round of GATT (General Agreement on Tariffs and Trade). Since Arkansas is a key rice-growing region, Japanese rice farmers worry that Clinton will step up pressure on Japan to allow rice imports.
The other issue is the U.S.-Japan semiconductor agreement. Japan has pledged to try to boost the foreign share of its chip market to 20% by the end of this year. Chip makers, however, now concede that this goal will be all but impossible to reach. They hope for an extension of the agreement.
