President Reagan today praised Prime Minister Yasuhiro Nakasone for steps taken this year to open Japanese markets to foreign products but stressed that the problem is far from solved.
At a bilateral meeting between the two leaders prior to the opening of the economic summit meeting here, Reagan singled out telecommunications equipment as an area in which the Japanese market is being opened and forest products as one in which it is not.
This was the first meeting of the two leaders since they agreed Jan. 2 in Los Angeles that the Japanese should open their markets to more foreign products in an effort to cut America's record $123.3 billion trade deficit. Almost one-third of that deficit, $36.8 billion, comes from Japan.
The trade deficit unleashed a congressional firestorm, as both the House and Senate urged the president in nonbinding resolutions passed by overwhelming votes to retaliate against Japan for its protectionist practices.
A senior administration official briefing reporters after today's Reagan-Nakasone meeting said, "In the case of telecommunications we have now accomplished virtually everything that we had hoped to have done at this stage."
The official, who spoke on the condition that he not be identified, said negotiators reached agreement on April 19 that standards for telecommunications equipment used in Japan will be roughly equivalent to those in the United States -- "limited essentially to making sure that equipment plugged in does not damage the overall system."
The new regulations will be in place by June 1, the official said. At the request of the United States, the negotiations were rushed to completion before the summit meeting, he said. Other talks are continuing on medical equipment, pharmaceuticals, sophisticated electronics and forest products.
"In the area of medical products we felt again last week that we made very substantial progress, though a lot will depend on the implementation, which we are supposed to see sometime in late June or early July," he said.
Nakasone told the president that lowering tariffs on imported forest products such as plywood, as the United States is seeking, is particularly difficult. The Japanese forest products industry has about 100 companies in it, and about 30 of them would go bankrupt if the tariff were dropped immediately, the prime minister said.
The senior official briefing reporters said the administration is "aware that considerable efforts are being made in Japan to figure out how to restructure the industry so that they can effectively open up their market."
To preserve jobs in the forest-products industry, Japan imports logs and processes them, rather than buying cheaper finished-wood products from other countries. Forest-product companies in the United States are pushing for the Japanese tariff cut to boost their exports at the same time portions of U.S. industry are seeking some form of protection from rising imports from Canada.
Nakasone also raised, as the Japanese government has in the past, questions about the prohibition of exports of crude oil from Alaska to Japan. The administration would like to see the restriction lifted, but Congress has refused to go along. Reagan told Nakasone the issue is related to the health of the U.S. maritime industry.
With exports prohibited, Alaskan oil must be shipped to the lower 48 states or Hawaii. As a cargo moving between two American ports, it must be carried in American ships manned by American crews at a higher cost than if carried in foreign ships with lower-paid foreign crews. Because the oil received at a refinery must compete with crude being carried more cheaply from foreign countries, the higher shipping cost effectively holds down the value of the oil in Alaska. State officials also would like to see the export ban lifted because their severance taxes are levied on the value of the oil coming out of the ground.