Next to taxes and Social Security, little attracts more attention in this city than foreign trade. Any time the House or Senate holds a hearing on import competition, scores of lobbyists line up in the corridors, ready to scramble for the few available seats.
Trade also will be one of the preoccupations this coming week at the Versailles summit, where heads of state usually sweet-talk each other about the need for avoiding protectionism. Nonetheless each is pressed by political forces to subsidize, exclude, or in other ways to give industry and labor at home more than an even break.
The underlying concerns are very basic--jobs and profits. And at a time of recession, feelings run deep. A main focus these days is whether Japan is taking unfair advantage of the relative openness of U.S. markets while refusing American and other foreign manufacturers equivalent access to its own very successful economy.
Japanese Prime Minister Zenko Suzuki at the weekend unveiled a plan for new trade liberalization measures for consideration at the summit in Paris, designed to soften some of the deep-seated criticism of his government's nontariff barriers. Welcome as these adjustments will be, they are not likely to dull the Japanese edge in this decade, or to narrow their trade surpluses.
One of the most significant--and underplayed--news stories of recent weeks was General Motors' decision to abandon plans for a new small car competitive with Japanese models, and to import--instead--200,000 subcompacts annually from Isuzu Motors beginning in 1984. That's probably good for GM, but in abandoning a struggle for this important sector of the auto market, it's a serious blow to workers in the U.S. auto and parts supply industries.
Not too long ago, angry Milwaukee workers--saying that the Japanese had "stolen" their jobs--hauled down a Japanese flag, run up as a courtesy to Japanese businessmen visiting a local engine plant. Some unions actively discourage purchases by their members of Japanese cars or other products. According to the New York Times, the United Auto Workers parking lot in Detroit posts a sign warning union members to "Park Your Import in Tokyo."
The battle rages on in Japan in similar emotional fashion. At the end of April, 8,000 Japanese farmers descended on Tokyo to protest any liberalization of import quotas on food products, as demanded not only by U.S. negotiators, but by Japanese industrialists seeking to appease American complaints.
Marching to the American Embassy in Tokyo, the farmers chanted, in English: "No more beef--no more oranges!"
The problem is--as everyone knows--that American agriculture is much more efficient than Japanese agriculture. American farms can produce a bale of rice--the staple of the Japanese diet--for about one-sixth of the cost in Japan.
Therefore, the Japanese agricultural lobby, a powerful influence on the ruling Liberal Democratic Party, resists more generous beef and citrus quotas, fearing that rice will be next. They were strong enough to keep any meaningful changes in those areas out of Suzuki's package.
Despite the high food prices Japanese consumers must pay as a consequence of this protection, there is almost no organized opposition to the powerful Japanese farm lobby. The LDP has discouraged a strong consumer movement--thus, there are no Japanese Ralph Naders.
Japan must continue to be pressured to drop remaining protectionist devices. It deserves credit for, and should be applauded for the market-opening steps it has taken so far. But as Sen. Paul E. Tsongas (D-Mass.) has observed, focusing exclusively on everything that Japan does wrong distracts us from the real issue: the loss of the American competitive instinct.
Tsongas notes that Japan now graduates more engineers--in absolute numbers, not merely per capita--than does the United States. (We produce more lawyers.) Overall, there is a declining U.S. commitment to higher education.
Tsongas also correctly points an accusing finger at the "American tradition of confrontation between management and labor." In Japan, as in West Germany, business and labor cooperate, and meet periodically with their national government to set realistic wage and price targets.
We also must move in this direction, putting aside irrational fears of long-range economic planning. Planning isn't socialism, it isn't regimentation. Planning is an exercise in self-preservation. Without it, the United States can become a second-rate industrial power.