VIEW FROM WASHINGTON / JAMES RISEN : Tyson’s Academic Tome Sets Tone for Clinton’s Stand on Japanese Trade

There is a great scene in the movie “Patton” that seems relevant today in the budding trade conflict between the United States and Japan. Early in the film, George C. Scott, playing Gen. George S. Patton Jr., triumphantly surveys the North African battlefield on which his U.S. troops have just wrecked the Afrika Korps of Germany’s military genius, Field Marshal Irwin Rommel.

“Rommel!” Patton shouts, “I read your book!”

Know your adversary. That’s one of the oldest rules of combat. So maybe Japan’s trade negotiators should read the collected works of one Laura D’Andrea Tyson.

Only rarely do academic publications have any impact on public policy. But Tyson, now the chairwoman of the Council of Economic Advisers, wrote a dry tome just before she joined the Clinton team that now reads eerily like a memo to the President on how to deal with Japan.

In her book, “Who’s Bashing Whom?”--published in November, 1992 (Institute for International Economics, $25 paperback), while she was still teaching at UC Berkeley--Tyson devoted most of one chapter to a case study of Motorola Inc.’s attempts to break into the Japanese cellular telephone market.

Funny, but that’s the very case the Clinton Administration has chosen to take a stand on in its new policy of brinkmanship with Japan.

Indeed, Tyson, who has been right in the middle of every key White House decision on Japan policy, acknowledged in an interview that the Administration is following the blueprint for aggressive action on Motorola that she laid out in her book.

“There has been a consensus on Japan policy that has developed that is very similar to what I wrote,” she said. “U.S. policy is now consistent with what I wrote.”

So what is Tyson’s bottom line on Motorola?

In documenting the long history of the case, which has been hanging fire since the Reagan years, Tyson argues in the volume that the key lesson to be learned is this: Only when the United States gets tough with Japan do the Japanese respond. What’s more, she says American policy-makers should drop their fear of appearing too tough and instead demand specific results and “trade outcomes” from Japan.

In the past, U.S. negotiators often forged legalistic trade agreements that resulted in superficial changes in Japanese trading procedures--but not in any real increase in Japanese purchases of U.S. goods. By contrast, Tyson says, the Motorola case teaches that American negotiators shouldn’t be afraid to get their hands dirty and push for specific trade gains for specific firms--especially if a U.S. corporation can make a good case that it has been wronged. “The Motorola story indicates that the distinction between trade management through establishing better rules and managed trade through establishing trade outcomes or results is overly simplistic and misleading,” she writes. “Paradoxically, in Japan’s heavily managed market, something akin to managed trade was needed to achieve something akin to market competition.”

As she describes the early years of the case, Tyson writes most admiringly of American policy-makers when they show flashes of steel. The Reagan Administration got results, she says, when it got tough and had Secretary of State George P. Schultz intervene with the Japanese on Motorola’s behalf.

“Unilateral pressure and bilateral negotiations were essential for the enforcement of negotiated agreements,” Tyson writes. “It took direct personal pressure from the U.S. secretary of state to compel” Japanese compliance with previously negotiated agreements on the cellular phone trade.

During the early days of the Bush Administration, Motorola once again got Japan’s attention, she says, by filing a so-called Super 301 trade complaint with the U.S. trade representative’s office. Such a complaint of unfair trading practices, if approved, requires American retaliation. Motorola’s case marked one of the first uses of what was dubbed the “nuclear bomb” in the U.S. trade arsenal.

In other words, Tyson argues, when dealing with Japan, it is best to carry a big stick.

Tyson sees the Motorola story as a model for policy-making for many of the same reasons the Clinton Administration has now selected it as a test case in its confrontation with Japan. Simply put, the Motorola case offers some of the best evidence that Japan is an unfair trading partner.

For years, Tyson writes, Motorola was a world leader in cellular phone technology, leapfrogging the best systems Japanese firms had to offer. Yet the Schaumburg, Ill., firm consistently was denied access to the Japanese market. Subtle, non-tariff barriers were thrown in its way both by Japanese corporations and the Japanese government. But the end result was almost the same as if Japan had imposed prohibitive tariffs or quotas on U.S. imports. In the mid-1980s, bureaucratic delays kept Motorola at bay long enough to give Japanese firms time to catch up with its technology.

“The telecommunications market in Japan . . . (is) heavily managed,” writes Tyson. “In this industry more than most, there was a close alliance between Japanese bureaucratic authorities and Japanese business interests, an alliance that worked to the disadvantage of outsiders.”

Even after the Japanese grudgingly began to open the market to Motorola under prodding from the Reagan and Bush administrations, the government and the Japanese telecommunications industry still sought to exclude the U.S. competitor from the lucrative Tokyo metropolitan market.

Indeed, the Clinton Administration’s charge that Japan has failed to live up to a 1989 agreement to open the Tokyo region to Motorola lies at the heart of the current trade dispute. In response to what it sees as Japanese intransigence on the Motorola case, the Administration is widely expected to announce later this month that it will slap roughly $300 million in sanctions on a variety of Japanese imports to the United States.

Ultimately, however, the Motorola case has been simply a convenient vehicle for the Administration as it seeks to send a broader message to Japan about trade. And for anyone who bothered to check, that message was clearly written by Laura Tyson nearly a year and a half ago.