President Plays Down U.S.-Japan Trade Deficit : Policy: After meeting with Prime Minister Murayama, Clinton shifts approach to issue, saying recent pacts have not had time to be effective.

WASHINGTON — In a pronounced shift from his approach at earlier White House meetings with Japanese leaders, President Clinton on Wednesday sought to play down the importance of Japan’s continuing, $60-billion-a-year trade surplus with the United States.

Emerging from a White House meeting with Japanese Prime Minister Tomiichi Murayama, Clinton admitted that the United States has not reduced its trade deficit with Japan. But he took credit for eight trade agreements that his Administration has reached with the Japanese in the last year.

“I don’t think you can over-read the figures from this year, because of the impact of the recession (in Japan) and because of the time delay in implementing the eight agreements we made in ’94 and their impact,” the President said.

It marked a considerable change for Clinton, who took office pledging to focus on results and the bottom line in dealing with Japan on trade issues.

Clinton Administration officials had repeatedly criticized their predecessors in the George Bush Administration for concentrating too much on the number of agreements signed with Japan rather than on their impact on the bilateral trade deficit, which is much larger than the United States’ imbalance with any other country.

Last February, after an icy White House session with then-Prime Minister Morihiro Hosokawa, Clinton told a Japanese reporter at a press conference: “America’s trade deficit with Japan is not very popular among the American people or the American government. It’s hard to explain it, year in and year out.”

Since that time, the deficit has continued at the same levels.

The turnabout reflected in part the mood of this week’s meeting, which was intended to show public cooperation between the United States and Japan at the beginning of an especially sensitive year. The 50th anniversaries of both the atomic bombing of Hiroshima and the end of World War II will occur this summer.

The change in tone also demonstrated that, midway through Clinton’s four-year term, Administration officials are no longer so eager to draw attention to the trade deficit with Japan because they are worried that they will not be able to bring it down much by the 1996 presidential election year.

Japanese officials were clearly delighted by the shift.

“Rather unfortunately, for the past two years we concentrated too much attention on resolving the trade issues,” Japanese Foreign Ministry spokesman Terusuke Terada told a press conference.

Asked when the existing trade deals might have some significant impact on the trade imbalance, the Japanese spokesman replied: “Not overnight, (but) over the mid-term period.” He defined “mid-term” as about four to six years.

Over the past year, the United States and Japan have reached new trade agreements covering construction, medical equipment, insurance, telecommunications, cellular phones, glass and intellectual property. And on Tuesday, on the eve of the summit, the two governments signed a new agreement on financial services that will give U.S. investment firms the right to manage Japanese pension funds.

“These agreements have just been reached, for all practical purposes,” U.S. Ambassador to Japan Walter F. Mondale said Wednesday. “I think, if you look at it, these are not insignificant.”

But none of the trade deals is as important for the trade deficit as the two big areas where the United States and Japan remain at odds: automobiles and auto parts. These two areas make up about two-thirds of the $60-billion deficit.

The two governments are scheduled to reopen talks on autos and auto parts later this month.

“We are clearly making progress, but not enough, and we have to move on auto parts and autos,” Clinton said Wednesday.

Clinton did not conduct a full-scale press conference with the Japanese leader, as he did after his last two White House meetings with Japanese prime ministers. Instead, the two leaders met only briefly with a small group of U.S. and Japanese reporters.

Clinton sought to reassure Japan about American goodwill on the 50th anniversary of the end of World War II.

“The last three leaders of Japan have expressed in the sincerest terms their regret about the war,” the President noted. “We have had a remarkable relationship, a partnership and a growing friendship with Japan, and I would hope that we could mark this year by saying this is something that civilized nations can never permit to occur again.”

Clinton’s decision to emphasize the trade deals that his Administration has signed, rather than the size of the deficit, sounded familiar to veterans of past administrations.

“They (Clinton Administration officials) are now saying many of the same things we did,” said Douglas Paal, director of Asian affairs for the National Security Council under Bush.