Despite growing concern over rising protectionist sentiment in Congress, Japan appears headed for a deliberate confrontation with the United States over the size of the Japanese trade surplus.
In a series of meetings this week in Washington, Japanese officials will argue that they have done just about all that can be expected to trim their country's surpluses. And the Japanese position -- as explained to reporters here last week -- is considerably less apologietic and defensive than it was a year ago.
Basically, the Japanese argue that the biggest problem with the balance of trade is the U.S. inflation rate and not Japan's exports.
Unlike last year, when the government of then Prime Minister Takeo Fukuda was making extravagant pledges to stimulate the economy and reduce his nation's trade surplus, no similar grandiose statements are coming this year from the new government of Prime Minister Masayoshi Ohire.
The exchanges get underway today with a visit to Washington by Takeshi Yasukawa, the new government's chief trade negotiator. A former ambassador to the United States, Yasukawa is a close friend of Ohira and is known to closely reflect the prime minister's views, which he will express in meetings with administration officials and members of Congress.
Other Japanese officials will follow across the Pacific, and leading Carter administration officials -- including Treasury Secretary W. Michael Blumenthal and Special Trade Representative Robert Strauss -- will make their points during visits to Tokyo.
In a briefing last week, Yasukawa told reporters Ohira is determined to prevent the current "irritations" from becoming a full-blown confrontation with the United States. The latest "irritations" stem from disclosure of year-end trade figures showing that the U.S. had a $11.5 billion deficit with Japan in 1978 compared with a $8.1 billion deficit the year before.
However, the Japanese case outlined by Yasukawa does not promise dramatic initiatives, and in general contends that the necessary steps already have been taken.
Japanese exports to the United States such as steel, color television sets and textiles already are declining as a result of export-limiting agreements reached in the past, he said.
"There are no grounds for the United States to complain that Japan is exporting unemployment (to the (U.S.)," Yasukawa said.
On other export items such as automobiles, the outcome will depend less on Japan's behavior than on the Carter administration's ability to control inflation, he said. If American prices rise, Japan's products will become more competitive and exports will increase.
But all of those traditional trade issues are overshadowed this year by strong American pressure on Japan to stimulate its domestic economy to a level that will increase domestic demand and create a larger market for foreign imports.
The issue came to the fore last month when President Carter sent what the Japanese press described as a letter of criticism to Ohira. Specifically it accused Ohira of backing away from the old Fukuda government promise to stimulate the economy to an extent that would provide a 7 percent growth rate in the Japanese fiscal year that ends March 31.
Soon after taking office, Ohira re-established the goal at 6.3 percent, and many economists believe it will actually be lower than that. His aides last week insisted Americans had misinterpreted Ohira's move. Ohira had not "abandoned" the 7 percent target, but merely had adopted a more realistic estimate of what the final statistics would show, one official said.
However, a lower level of economic growth is a cornerstone of Ohira's overall social policy. It is perhaps his most persistent theme. He argues that Japan's high-growth days are past and that the quality of life is now more important than the soaring growth rate of the 1960s and early 1970s. His lowering of sights for this fiscal year is not just a temporary re-evaluation but a signal of what his policies will produce in the years to come, his American critics contend.
Yasukawa acknowledged last week that economic stimulation has now become the major issue between the two governments and said he is prepared to defend energetically what the Ohira government is doing. He said Ohira's new budget calls for a 14 to 15 percent increase in total expenditures, including a 20 percent rate of increase in public works spending.
"We are aware that the United States expects Japan to do its utmost to stimulate our domestic demand..." he said. "And the new cabinet has formulated a budget which is in line with that expectation."