Japan Accuses U.S. of Unfair Trade Stance : Relations: Report criticizes Clinton’s reinstitution of a law allowing retaliation against imports.

In another indication of its continued tough stance toward American trade demands, Japan released a report Tuesday accusing the United States of unfair trade practices.

“The United States is without parallel in imposing measures that force its trading partners to abide by unilateral judgments, and shows no sign of abandoning this practice,” the 333-page report charges. It also summarizes what Japan sees as unfair practices by nine of its other major trading partners.

The report, prepared by an advisory committee of the Ministry of International Trade and Industry, harshly criticizes President Clinton’s reinstitution in March of the “Super 301” trade law, which allows U.S. retaliation against Japanese imports should Japan fail to further open its market to foreign goods.

“When the same country serves as both prosecutor and judge, one must assume that due process is lacking,” the report says.

It is the third year Japan has produced this kind of report, which serves as a counterattack on an annual U.S. report on foreign trade barriers. The U.S. report, released March 31, singled out Japan for the most severe criticism and could ultimately lead to sanctions. The Japanese report, in turn, lists more categories of unfair practices by the United States than by any other country.

Taken together, the two reports demonstrate how officials of the two countries largely continue to talk past each other when discussing trade.

The underlying theme of the Japanese report is that trade issues should be settled according to international rules as embodied in the General Agreement on Tariffs and Trade and its successor, the World Trade Organization. However, U.S. complaints about trade barriers in Japan primarily concern features of Japan’s economic structure that are not covered by GATT rules.

Tokyo and Washington agreed last week to resume trade talks that broke down in February, but basic conceptual disputes between the two sides remain. From the U.S. perspective, the purpose of the talks is to agree on ways to further open Japan’s market to reduce Japan’s $60-billion merchandise trade surplus with the United States and its $131-billion global surplus in trade of goods and services.

The Japanese report, however, dismisses core U.S. arguments in almost condescending terms. It is especially critical of demands to address detailed “microeconomic” issues as a means of redressing trade imbalances. In the trade “framework” talks now being resumed, a key American focus is on specific sectors, including automobiles and auto parts, insurance, and government procurement of telecommunications and medical equipment. These sectoral talks formally resume today with insurance negotiations in Tokyo; auto talks reopen Thursday in Washington.

But the Japanese report rejects the conceptual basis for these talks. “A quick perusal of almost any economics textbook will confirm that microeconomic policies for individual sectors are not effective means of resolving trade imbalances,” it says. The report also states that “in purely economic terms, there is no need to resolve . . . trade imbalances.”

The report’s charges of U.S. discrimination against foreign competitors run the gamut from unfair enforcement of anti-dumping actions to patent law.

Some complaints are remarkably detailed. For example, the report charges that U.S. restrictions on the export of logs cut from federal forests, imposed to protect the endangered spotted owl, are a violation of GATT rules. While log exports are restricted, lumber exports are encouraged, it charges, suggesting that WTO dispute settlement procedures could be invoked to demand a change.

“Conservation of spotted owls should be accomplished instead by restrictions on deforestation,” the report says. “The U.S. measures are actually . . . restrictions implemented to protect domestic lumber mills.”