Newspaper article THE JOURNAL RECORD

U.S. Ready to Take Risk with Japan Trade Challenge

Newspaper article THE JOURNAL RECORD

U.S. Ready to Take Risk with Japan Trade Challenge

Article excerpt

Though President George Bush put Japan, Brazil and India on the ``hit list'' of countries charged with unfair trade practices, and named a score of other countries to the ``watch list,'' everyone knows, including the Japanese, that it is overwhelmingly the American grievance against Japan that lies at the root of his decision to start using the so-called Super 301 section of the 1988 U.S. trade law.

The Japanese say they will not negotiate under the threat of American sanctions. Sousuke Uno, the Japanese foreign minister who has been chosen to be the next prime minister, denounced the hit list as a ``symbol of unilateralism'' and a threat to ``the open multilateral trading system.''

Nevertheless, the hit list has certainly got Japan's attention, like hitting a mule over the head with a two-by-four.

In Paris this week, Japanese officials told their American counterparts that they would enter into broad discussions of what they vaguely called ``structural'' problems of Japan's retail and distribution system, provided the Americans were willing to discuss their structural problems, like the budget deficit.

The Japanese also insist that the United States has plenty of its own import restrictions, like quotas on automobiles, steel and sugar.

Carla A. Hills, the U.S. trade representative, says the United States is more than ready for bilateral talks, whether they are officially labeled ``301'' or not.

There is nothing vague about the American charges against Japan. They are in three specific areas - supercomputers, satellites and lumber. Many American businesses go further.

In a formal comment to the U.S. trade representative, dated March 24, 1989, the U.S. Chamber of Commerce provided a list of ``priority trade barriers and distortions,'' charging Japan with ``targeting'' a wide range of American industries through ``administrative guidance, public procurement and restrictive business practices.''

Japanese officials, the American business organization said, offer commercial ``suggestions'' and ``advice'' to businesses and public organizations over which they have regulatory jurisdiction.

Since the Japanese government possesses ``broad authority to provide or deny loans, grants, subsidies, licenses, tax breaks, government contracts, permission to import, and approval of cartel arrangements,'' those official suggestions, the chamber charged, constitute ``implied threats'' to deny government benefits or impose new restrictions on businesses or public organizations that do not accept the advice.

The chamber further charges that the Japanese government ``tolerates a variety of complex and systematic anti-competitive activities which allow Japanese companies to collude and which discriminate against foreign-made goods.''

Japanese discrimination against American agricultural products is well known, but Japan asserts that it is at least as open as any other country to imports of manufactures. …

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