U.S.-JAPAN TRADE ACCORD : Terms of the Deal .. and the Pitfalls

Wednesday’s complex agreement between the United States and Japan over auto production and auto parts leaves unclear who came out ahead in the deal. Here are the main points of the agreement and the pros and cons for the various parties.

The agreement: U.S. auto companies will gain greater access to auto dealerships in Japan. American negotiators predict U.S. auto companies will open 200 new outlets in Japan by 1996 and that the figure will rise to 1,000 by 2000.

The flip side: U.S. companies will face greater competition from increased production of Japanese cars in this country.

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The agreement: Japan’s five biggest auto makers released “voluntary plans” to increase production in the United States and increase their foreign parts purchases at home and abroad. The United States estimates the deal will increase Japanese purchases of U.S. car parts by almost $9 billion in three years, a 50% increase.

The flip side: Many Japanese auto makers say the increases were already in the works.

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The agreement: Both sides will meet regularly to document progress in the areas affected.

The flip side: The Japanese government, which has refused U.S. demands for numerical targets, said the array of promises involving Japanese dealerships, repair garages and purchase of American parts are estimates made by Washington--not pledges by the Japanese government or Japanese manufacturers.

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The agreement: President Clinton said it will be a windfall for U.S. workers.

The flip side: This might not do much for the United Auto Workers’ lagging membership. Most of the new jobs will probably go to employees of Japanese car companies in the United States, most of whom have rejected unionization.

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The agreement: The Japanese government agreed to loosen the rules governing repair work that is now done largely in a network of garages tied to the Japanese car makers.

The flip side: Good luck monitoring auto mechanics in Osaka.