Taking On (Japanese) Bureaucrats : Trade negotiator Kantor rails at resistance to serious trade liberalization

Fresh from the successful conclusion of seven long years of world trade talks and after winning passage of the North American Free Trade Agreement, the Clinton Administration now can focus on thorny U.S.-Japan trade issues, of which there are many. It may be that the greatest hurdle for U.S. trade aspirations lies ahead.

For years the United States has prodded, cajoled and pressured Japan to open its markets to American goods. True, many of Tokyo’s official trade barriers--most recently its ban on rice imports--have been lifted or eased; but a maze of official regulations and informal barriers remain, posing formidable obstacles to cracking the Japanese market.

Japan and the United States began talks this summer on a new bilateral trade framework. But the negotiations have not been going well. Venting the Administration’s frustration, U.S. Trade Representative Mickey Kantor has lashed out at Japanese bureaucrats, accusing them of blocking reforms in order to hold on to power. The fragile coalition of Prime Minister Morihiro Hosokawa, who backs deregulation and efforts to open markets, is struggling to survive.

In a letter to the Japanese newspaper Nihon Keizai Shimbun, Kantor singled out officials at the Ministry of International Trade and Industry, accusing them of fighting Hosokawa’s attempt to cut regulations and unwritten directives that have hurt the sales of American products in Japan.

The gross asymmetry in market access has produced what Japan expects will be a global trade surplus of $142.2 billion this year, of which about $56 billion is with the United States alone.

The Clinton Administration had wanted the Japanese to agree to target levels for U.S. imports. But this smacks of managed trade, not free trade. Instead the United States and Japan have agreed to establish “objective criteria” to “assess” progress toward free trade between the two nations. Beyond that, little progress has been made amid the biggest political changes to rock the Japanese government in 38 years.

It is well known that bureaucrats, not politicians, set policy in Japan. Those bureaucrats would be far better advised to play a constructive role in developing new trade policies that earn Japan respect in the United States and elsewhere.