Japan's government and steel exporters are cautiously optimistic that they will be able to live with the new U.S. steel import pricing plan.
They view it as the lesser of evils among the weapons the U.S. could use to restrict steel imports from Japan and hope it will replace the weapon they fear most, the anti-dumping law now aimed against them.
But they are preparing to insist on a voice in determining how and at what level the new "reference" prices are fixed and suggest that a period of hard bargaining on those prices lies ahead.
General agreement with the outlines of the U.S. plan represents a major shift by the top leaders of Japan's steel industry who until very recently had insisted on a system of voluntary export restraints which they could control and enforce among themselves.
They now realize that their own voluntary restrictions will not satisfy the U.S. Government and are reluctantly willing to try out the new system being developed by a treasury task force.
The plan would establish a set of, still not complete, has been relayed in general outline to the Japanese government whose officials express guarded optimism that will work.
The plan would establish a set of reference prices for steel being sold in the American market. Stiff duties would be imposed on products sold below those minimums. Imports from both Japan and the European Community countries would be affected.
The Japanese govenment's top steel negotiator, Naohiro Amaya, said in an interview yesterday that although the details are not yet clear, "In principle, I think the plan is agreeable because there is no other way to solve this very difficult problem."
The anti-dumping act invoked against several top Japanese steel makers is unfair and impractical, Amaya said. Amaya, director of the Ministry of International Trade and Industry's Basic Industries Bureau, in effect, said the reference price system is the only alternative.
The ministry long ago concluded that the U.S. could never accept the other alternative, voluntary restraints by Japan's companies. But the industry leaders had clung to the hope of imposing restraints to avert any stronger medicine from the U.S. government.
The industry's shift away from that position was underscored by its most powerful figure, Yoshihiro Inayama, chairman of the Japan Iron and Steel Federation. Inayama told reporters here, "The reference price system is the most preferable action we can have for the present situation."
However, other sources made it clear that general acceptance of the American plan does not mean agreement with the details of reference pricing. There is room for broad disagreement over just how the guideline prices are to be fixed and monitored.
The Japanese would like to see the reference prices set very low, giving them room to sell profitably in the U.S. at prices which would not incur penalties.
Zenzo Shima, executive director of the Japan Iron and Steel Exporters Association, said today the reference pricing agreement should emerge from negotiations in which Japan and Europe had a voice along with the U.S. Japan, he said, should have a voice in establishing the reference prices and in changing them to meet changing production and transportation costs.
Shima indicated he believes the U.S. wants to set those prices and monitor them unilaterally. That, he said, is what he has been told so far.
Shima also indicated that Japan's steel exporters have some rather definite ideas of where the prices ought to be fixed.
"We think that the reference prices should be lower than the actual domestic prices (at which U.S. companies sell products at home)," he said.
"How much lower? We would want reference prices to be set more than 100 per cent below actual domestic prices," Shima said. A 10 per cent gap would still permit a large export of steel to the U.S., he said. There would be no danger of Japanese exports being cut in half as some American sources have speculated, he said.