Dealing With Japan: Steady but Careful : A headstrong Administration may be heading for trouble

The Clinton Administration is surely sincere in saying it wants to usher in a new era in U.S.-Japan relations, especially given the enormous asymmetry in trade that exists between the two nations. But the President must recognize--if recent bumblings by his staff in various matters haven’t already forced him to do so--that the process of initiating any change is as important, and tricky, as the goal itself.

This is especially true in dealing with Japan. Japan, which like most other nations is fiercely protective of its economic interests, also is extremely sensitive to protocol and nuances of behavior. So far the Clinton Administration’s moves have struck the Japanese as fingernails being drawn across a blackboard.

Consider that President Clinton put Tokyo on notice that his Administration is seeking “results” in reducing Japan’s $49-billion trade surplus with the United States. Fair enough: Japan’s other trading partners support the U.S. contention that Japan’s global trade surpluses are abnormal and unacceptable. But at the same time our Asian allies as well as some in the European Community are worried about Clinton’s blustery rhetoric--not to mention his icy manner in his first meeting with Japan’s prime minister--and about an approach that sometimes smacks of protectionist-managed trade.

They also question Clinton’s logic: How does he square his goal of a special trade arrangement with Japan with free trade? Last week U.S. officials outlined an overarching framework for a “basic bargain.” Japan would initiate fiscal policies to reduce, over a reasonable period, its global account surpluses to 2% of its gross domestic product from the current 3% to 3.5% of GDP.

Japan would also increase imports of manufactured goods, which as a share of its GDP is only about half that of other industrial countries. At the same time, Washington is concentrating on related issues, including compliance with prior accords.

ENTER MONDALE: Perhaps to soft-pedal the new line, the White House has named former Vice President Walter F. Mondale as ambassador to Japan. The appointment of a respected former vice president is likely to please the Japanese. They held in high esteem onetime Senate Majority Leader Mike Mansfield, who when he was ambassador hailed the U.S.-Japan alliance as America’s No. 1 relationship.

The Clinton Administration insists this still is the case. But in seeking to re-balance the economic relationship between Washington and Tokyo, the Administration sometimes resorts to playing the street-corner heavy, brandishing brass knuckles while insisting it is a free trader. U.S. Trade Representative Mickey Kantor and Commerce Secretary Ronald H. Brown deny this, insisting that the new approach toward Japan is not managed trade but “expanded trade.”

Maybe. Japan does present unique challenges to the United States: The economic systems of the two nations are fundamentally different. Earlier efforts to reconcile the systems frustrated Washington. Meanwhile, Japan’s economy has flourished and its trade surplus has grown.

During the Cold War the United States was willing to overlook the lopsided economic equation for security reasons. U.S.-Japan security ties remain strong and the two countries continue to cooperate on a host of global issues ranging from population to health. These are key areas of cooperation. That’s why strained economic ties require new solutions--but not managed trade, or stern threats.