A leading Japanese businessman said here yesterday that the degree of trade protection practiced in his country is not "so high as often portrayed in the United States."

Yoshizane Iwasa, chairman of the Japan-U.S. Economic Council, told an audience of government and business leaders that some criticism of Japan "may be warranted, but the U.S. also maintains orderly marketing agreements and similar arrangements covering shoes, specialty steels and trigger-price mechanisms on steel mill products."

Iwasa, a vice chairman of Keidanren, the Japanese counterpart of the National Association of Manufacturers, noted that after the new multilateral trade treaty is adopted, the average U.S. tariff level will be 4.3 percent, or higher than Japan's 3.0 percent.

Iwasa and other Keidanren colleagues are here on a brief visit, hoping to dampen protectionist sentiment in advance of the seven-nation economic summit in Tokyo at the end of June.

He did not mention emotional denuciation of Japan's trade policies, such as one made yesterday morning by former Texas Gov. John Connally to a Washington audience of independent businessmen. But Iwasa warned that neither Japan nor the U.S. should "get trapped into playing the dual role of being a prosecutor of the other country's trade policy and a judge of the adequacy of the other country's concession."

Connally, a candidate for the Republican Presidential nomination said if he were Jimmy Carter, "I would say to (Japanese) Prime Minister Masayoshi Ohiro, 'Unless you're prepared to take American goods and services, you'd better tell your people they'd better be ready to sit on the docks of Yokohama in their own Toyotas, watching their own television sets.'"

Iwasa said that Japan "should and will continue to open its market, not out of a sence of guilt for being more protectionistic than other countries, but to achieve a yet higher industrial structure and better economic welfare both globally and nationally."

One theme of Iwasa's address was that Japan must phase out labor-intensive activities in favor of "the developing economies (elsewhere in Asia) which need jobs and (need) to rise in the world." Failure to do so would undermine Japan's own security, he claimed.

He suggested that while the less developed countries are catching up, it is up to the governments of the industrial countries to support research and development efforts "leading to technological breakthroughs for yet higher dimensions of the world economy."

Although Iwasa was not explicit, this gets to the crux of the U.S. Japan argument over procurement by the Nippon Telephone and Telegraph Co.The U.S. had argued that Japan unfairly subsidizes research and development costs for advanced communications technology, putting its industry in a favorable competitive position.

Obliquely, Iwasa suggested that the U.S. does the same thing through the U.S. defense budget which "has provided ample funding . . . (that has) helped to facilitate the shift to a more sophisticated industrial structure."

Iwasa also said that differences in culture between Japan and the U.S. are "an important and latent" source of conflict. "Please do not dream that our market practices will assimilate American practices in a year or two," he said. "We have only lately adjusted to the market in your country. It is your turn to adjust to our market if you want to penetrate (it). Be assured we will help you do so."