Newspaper article St Louis Post-Dispatch (MO)

Clinton Takes Swing at Japan in Trade Talks

Newspaper article St Louis Post-Dispatch (MO)

Clinton Takes Swing at Japan in Trade Talks

Article excerpt

At least nobody vomited. That's the best that can be said about the recent trade talks between President Bill Clinton and Japanese Prime Minister Morihiro Hosokawa.

Like George Bush's flu-tainted trip to Tokyo two years ago, the talks were a failure. The difference was that this time, instead of papering over the failure, Clinton came out swinging.

His first blow was a U.S. ruling that Motorola Inc. had been unfairly prevented from competing in the Japanese cellular-telephone market.

The next blow may come in about a month, when U.S. Trade Representative Mickey Kantor is to announce which Japanese products will be hit with punitive tariffs.

Expect that list to include some popular consumer-electronics products. Kantor has vowed to make the sanctions hurt, as in hundreds of millions of dollars of pain.

Any pain felt by Sony or Hitachi, though, would be shared by U.S. consumers, who would pay higher prices for the electronic gadgets, and by U.S. wholesalers and retailers.

Then the Japanese might retaliate, although William R. Cline, a senior fellow at the Institute for International Economics, thinks they would probably do so through the world body known as GATT, the General Agreement on Tariffs and Trade. Such a process can last for years.

"The outcome would be uncertain, but it's somewhat more likely that Japan would win a GATT case over the U.S. sanctions," Cline said.

So, who has the high moral ground? Japan stands accused of unfair trade, but the United States is the vigilante who's ignoring international law.

The Clinton-Hosokawa talks broke down over Clinton's insistence on specific market-share targets for U.S. firms in auto parts, telecommunications and other industries.

Such demands anger not only the Japanese, but our other trading partners as well, says William H. Lash III, who recently resigned from St. Louis University's Law School to take an associate professorship at George Mason University. Even though France and Canada may have their own disputes - and their own trade deficits - with Japan, they aren't on our side in this one.

"The reason they're against us is because we're acting unilaterally and because we're demanding special treatment," Lash said. …

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