Japan Rules Out Import Targets : Trade: Negotiators adamantly oppose U.S. demands that they boost sales of American products to specific levels .

Japanese trade negotiators, reflecting Tokyo’s toughened attitude toward the United States, are determined to refuse American demands to set specific targets for sales of U.S. goods in Japan.

Nonetheless, the two sides hope to forge a new framework for trade that will reduce the $49.6-billion U.S. trade deficit with Japan. They hope to have an agreement before leaders of the world’s seven richest industrial nations meet July 7-9 in Tokyo and before talks between President Clinton and Japanese Prime Minister Kiichi Miyazawa.

How much the two countries can agree upon remains to be seen. The Japanese have become increasingly strident over the last two months about U.S. proposals that Japan boost imports of certain goods to specific levels. The Japanese argue that such requirements are a form of “managed trade” that could increase protectionism around the globe.

“We have made our position abundantly clear,” Foreign Ministry spokesman Masamichi Hanabusa said Tuesday. “We are not accepting any targets which will turn into trade management.”

He said Japan’s total trade surplus of $136 billion is embarrassing but that the solution exists in allowing the free market to work things out.

Some observers say it is ironic that the United States, long seen as the champion of free trade, is now seen as promoting managed trade, while Japan, which built its powerful economy by astute trade management, is criticizing it.

“The Japanese cannot sit there and say, ‘We’ve never heard of managed trade,’ ” said Robert Orr, director of the Institute for Pacific Rim Studies at Temple University in Tokyo. “It’s an old Japanese custom.”

On Monday, the Clinton Administration gave Japan’s ambassador its proposals for the trade framework.

U.S. and Japanese officials declined to disclose specifics. However, major Japanese newspapers reported Tuesday, as U.S. officials have indicated in the past, that the United States wants Japan to cut its total trade surplus to 1% to 2% of its gross domestic product within three years, down from 3%.

Nihon Keizai Shimbun, a leading economic newspaper in Japan, said the United States also plans to press Japan to increase purchases of U.S. industrial products from 3% of GDP to 4%.

Washington also wants to set targets for Japanese imports of U.S. cars, auto parts and high-tech products; for U.S. penetration of Japan’s financial services market, and for Japanese government procurement of American products, the reports said.

The U.S. proposals do not include threats of automatic retaliation if the goals are not met, but they also do not rule out use of existing sanctions.