Japanese Must Look Beyond Export, Gingrich Tells Them

Firing a warning shot across its bow, House Speaker Newt Gingrich on Tuesday cautioned Japan against exporting its way to economic recovery and said the United States still wants action on opening Japanese markets.

“This is the most elegantly protectionist society in the world,” the Georgia Republican told the Japan National Press Club during the Tokyo leg of his Asian tour.

Japan’s trade surplus with the United States, which had been falling for two years, has risen for five consecutive months and posted a 12% surge in February. U.S. officials have been voicing concerns, but Gingrich’s comments about “predatory export policies” were the most pointed to date.

Coming from a Republican, the remarks are likely to carry special weight in Japan. During the Cold War, the GOP’s tendency to give Asian security precedence over the trade imbalance led many Japanese to view the Republicans as their chief defenders against Japan-bashing Democrats in Congress.

While praising Japan’s “exceptional cooperation on security issues,” Gingrich signaled that the good times may not last unless Japan pursues deregulation, which he sees as the only way to stimulate domestic demand without exacerbating Japan’s gaping budget deficit.

“In an economy led by export industries, driving up exports becomes a simple answer,” Gingrich said. “However, seeking stronger growth through predatory export policies and a restricted domestic market will not only fail to reinvigorate Japan’s economy--it also will inflame trade tensions between our two countries.”

Deregulation, which Prime Minister Ryutaro Hashimoto has made his priority, will not only spur the Japanese economy but also increase foreign firms’ access to the Japanese market, Gingrich said.

In his speech and in meetings earlier Tuesday with business leaders and with Shinji Sato, minister of international trade and industry, Gingrich and other members of Congress expressed concern over trade in automobiles, paper, aviation, telecommunications, photographic film and shipping.

Unless a dispute over alleged unfair Japanese port practices is resolved by April 14, the U.S. Federal Maritime Commission will begin imposing stiff fines on Japanese ships entering U.S. harbors. A quick solution is not expected. Meanwhile, a five-year agreement to boost Japanese purchases of U.S. paper products expires Friday, and Japan has no intention of renewing it.

Another area of concern to Washington is the weakness of the Japanese currency, which is propelling exports. Japanese auto makers, for example, are forecasting an increase in exports in 1997 for the first time in a decade.

At the press club, Gingrich drew sustained but slightly nervous laughter as he professed admiration for the Japanese art of pseudo-negotiation.

He mocked: “ ‘We’d love to buy something very soon, but we can’t quite figure out how to buy something, but we’re really glad you’re here and soon we’re going to actually make progress on something where you and we can agree, but we can’t quite explain yet, but we absolutely will in the not-very-distant future. We really are glad you’re here, and would you like some more tea?’

“I believe this is done with such elegance and charm that it has taken Americans almost 30 years to break the code,” Gingrich said. After his speech, his polite hosts asked him to come again.

Gingrich is leading a bipartisan delegation that has visited China, Hong Kong and South Korea and arrived in Taiwan early today. He spent part of his time in Tokyo explaining a statement he made in Beijing that the United States would defend Taiwan from any attack by China.

“We believe in a one-China policy,” Gingrich said, but stressed that “the process should be achieved voluntarily, through dialogue, and there should not be coercion.”

Beijing reacted sharply Tuesday.

“We don’t need any foreigner making indiscreet remarks on this question,” said Chinese Foreign Ministry spokesman Shen Guofang.