Stop the Fight, It’s Getting Ugly : Bilateral bashing of Tokyo is getting U.S. nowhere in trade talks

Once again the Clinton Administration has taken a battering-ram approach to open up the Japanese market. U.S. Trade Representative Mickey Kantor threatens to level punitive measures against Tokyo if, after a 60-day negotiating period, the Japanese government does not agree to buy a greater share of telecommunications and medical equipment from U.S. firms.

Kantor is right on the issue of expanding access to Japan. His frustration over the latest deadlock is understandable. For 15 years the United States and Japan have been unable resolve the fact that American suppliers have only a pathetic share of Japanese government purchases. Alas, Kantor’s blustery rhetoric may get Tokyo’s attention, but it sends the wrong signal from the United States, which is supposed to be a pacesetter in liberalizing international trade. Tokyo, meanwhile, has done a masterful PR job: By casting the United States as a villain pushing for “managed trade,” it has cynically won support from other nations.

Dare we risk a trade war? Weakening the specter of sanctions is the possibility that Kantor’s rhetoric may prove to be another empty threat from the Administration. Like it or not, U.S.-Japanese business interests--and the two economies--are inextricably joined at the hip. Meanwhile, U.S. leverage over Tokyo is in flux as Japan exports more to Asia than to the United States. Now Tokyo tells its Asian partners that if America gets away with “managed trade” with Japan, they will be treated the same.

The United States might do a lot better to resolve its trade complaints with Japan through a multilateral forum, drawing on the support from nations which share U.S. complaints about Japan. Tokyo might better yield to worldwide pressure from say the General Agreement on Tariffs and Trade or its successor, the World Trade Organization, or perhaps from the Asia-Pacific Economic Cooperation group.

The U.S.-Japan bilateral has become predictable--talks, threats, some unsatisfactory solution--then back to square one: Continuing obstacles to Japanese markets. When the Administration batters Tokyo, it undercuts the larger strategic relationship. A new approach is needed.