An influential council of senior American businessmen has warned that proposed Japanese laws could worsen trade frictions between the United States and Japan by placing barriers to U.S. sales of telecommunications equipment and other high-technology products.
The warning was contained in a 22-page report by the Advisory Council on Japan-U.S. Economic Relations. The report has not been released, but is being circulated within the Reagan administration and on Capitol Hill. A copy was made available to The Washington Post.
The report was described as "a preventive strike" by the council to head off potential trade problems before they become set in legislative stone. The council is composed of 75 American business executives headed by Honeywell Inc. Chairman Edson W. Spencer.
The document conveys a high level of concern by American businessmen that Japan is repeating its past practices of successfully protecting industries from foreign competition in fields of high technology, where the United States still retains an edge.
It remains unclear, however, how the upper echelons of the Japanese government will react to these new pressures, which come as Prime Minister Yasuhiro Nakasone prepares for a California meeting early next month with President Reagan.
Senior U.S. officials brought up the same issues in meetings late last month in Japan and reportedly received "a very negative" response from Japanese bureaucrats despite the prime minister's publicly expressed concern that the U.S. trade deficit with Japan -- expected to reach $35 billion this year -- is becoming a major irritant in relations between the two countries.
The council said that proposed laws could bar U.S. firms from equal access to Japan's markets and give the Japanese an edge in selling high technology to third countries. The laws would ease government controls over Japan's telecommunications industry; depart from a world-recognized system of providing copyright protection for computer software, and promote Japanese high-technology industries.
"The potential impact of these proposed changes can be of tremendous significance to the U.S. and other foreign companies engaged in business with Japan," the council said. The businessmen said they are concerned that the restructuring of Nippon Telegraph and Telephone (NTT) from a government enterprise to a private corporation could limit American participation in Japan's fast-growing, $5 billion telecommunications market. American companies' ability to sell to NTT, the report said, will be determined by the way the laws are interpreted and administered.
"The AT&T divestiture has led to a very open U.S. market for Japanese competition. It is hoped that Japanese bills will lead to a more open Japanese market for the U.S.," the report said.
Unless American companies are allowed to sell more in Japan, the businessmen said, the United States' growing, $1.2 billion trade deficit in telecommunications "will be the cause of major trade frictions for years to come."
The Americans chided Japan for refusing to buy U.S. satellites in an effort to build its own infant space industry and indicated this protection of its home market could give Japan an unfair advantage when it begins to export space satellites.
The businessmen said an attempt by Japan's Minstry of International Trade and Industry to substitute patents for the generally recognized copyright protection for software would impede world trade in high technology.