U.S. Makes Nice, but Trade Troubles With Japan Still Exist
In his previous role as the Clinton administration’s top trade negotiator, Commerce Secretary-designate Mickey Kantor built a reputation as an abrasive fighter battling to open foreign markets to American goods.
So Hiroshi Araki, president of Tokyo Electric Power Co., was surprised during President Clinton’s just-completed Tokyo summit to discover that Kantor was a pleasant man.
“I told him my impression that he was a soft, warm and mild person,” Araki said. “And his response to me was: ‘Be careful.’ ”
Araki had nothing to fear, however. Kantor handed Araki a certificate of appreciation for buying U.S. equipment. Kantor’s next stop was to deliver similar thanks to hospital executives for their American purchases.
Kantor’s atypical role of spotlighting U.S. successes in Japan, rather than complaining about barriers, reflected the stress placed by Clinton on making the three-day summit a festival of friendship mainly marked by renewed endorsements of the U.S.-Japan security relationship.
But the change in trade atmospherics has much more to do with geopolitical issues and the U.S. presidential campaign than it does with any sudden change in the ease or difficulty of exporting to Japan. For many years now, Japan has slowly become more open to imports but retains many barriers.
Shortly before departing for Russia on Thursday afternoon, Clinton visited a Chrysler dealership in a Tokyo suburb to promote U.S. car sales--and perhaps more important for his reelection prospects, to call attention to those sales’ rapid growth. Sales here of U.S.-made cars are rising sharply in terms of percentage growth but remain tiny compared to Japan’s total market.
Particularly contentious trade issues, including film, semiconductors and insurance--though mentioned in passing by Clinton during his meetings with Prime Minister Ryutaro Hashimoto--were basically left for other negotiators to handle in coming weeks, well away from the summit spotlight.
“We’re in an election year. It’s sort of logical. If the administration came in here roaring about trade issues at this point . . , then it would make it appear as though what they’d been doing for the past three years had been a waste of time,” said Robert M. Orr Jr., a senior research fellow at Temple University here and a board member of the American Chamber of Commerce in Japan. “They can’t allow that to happen. So I think they’re making a conscious effort to put the best face on what has happened in the past couple of years.”
Asked to comment on the view that his new, soft tone was election-related, Kantor replied: “We have a lot of accomplishments to stress.”
He noted that U.S. exports to Japan are increasing, in percentage terms, five times faster than Japan’s exports to the United States.
Kantor also maintained that toning down the harshness of U.S. rhetoric will not undercut Washington’s negotiating position with Tokyo. “The fact is we can walk and chew gum at the same time,” Kantor said. “We can cooperate together. We can also continue to demand that Japan open its markets and not protect its sanctuaries.”
The Clinton administration has been claiming success for its trade policy with Japan, but Orr stressed that a key issue for the next few years will be monitoring of the 21 trade-related agreements reached between Washington and Tokyo since Clinton took office.
“Many of the agreements reached were very good, some of them were not as good,” Orr said. “I think that the real proof of the pudding is going to be how we monitor these agreements. So I don’t think the scorecard is really totally in.”
Indeed, some observers say that U.S. negotiating leverage with Japan has been eroding for a decade or more, with market-opening progress becoming increasingly difficult because the United States has been too reluctant to impose sanctions and too ready to accept agreements that are ambiguous. Nothing has happened under Clinton to reverse that, these observers say.
“The fundamental problem is there is so much continuity and institutional memory on the Japanese side, and, in contrast, on the U.S. side, a new team comes in every two or three years,” said a U.S. businessman in Tokyo who spoke on condition he not be further identified.
Tokyo’s refusal to consider renewal of a semiconductor agreement that expires in July and its insistence that complaints by Kodak about access to Japan’s film market are not a legitimate subject for government-to-government negotiations reflect an increasingly confident and tough Japanese stance, he said.
“Ten years ago . . . there was no question that if there was an economic problem, the Japanese government and the U.S. government should negotiate to try to resolve the problem,” he said. “Now, with all the erosion of leverage and credibility, the Japanese side can say: ‘Get lost. It’s not our role. It’s the private sector; don’t come to us.’ ”
But after Kantor and U.S. Secretary of State Warren Christopher met privately Thursday with Chamber of Commerce members over breakfast, chamber President Bill Beagles said he believes that “the U.S. will keep the pressure on Japan.”
“I think there may have been a bit of a softer tone, less rhetoric, and I think that’s the way it should be,” Beagles said. “I think we recognize the maturity of the Japanese market and the friendship that we have with the Japanese, that not only are we competitors but we’re also friends.”
After several years of bruising trade negotiations, the new tone--even if it proves to be temporary--is very much welcomed by the Japanese.
“It is unnatural to focus only on the problems and forget everything else,” said a Japanese official who spoke on condition of anonymity. “There are no winners or losers. But for the Japanese side, this kind of cooperative summit is very welcome.”
Hilary E. MacGregor of The Times’ Tokyo bureau contributed to this report.
