Former Senate Republican leader Howard H. Baker Jr. today warned Prime Minister Yasuhiro Nakasone that Congress is likely to pass protectionist legislation unless Japan makes major efforts to correct its trade imbalance with the United States.
Baker also delivered a letter from President Reagan to Nakasone, which Baker said "speaks very frankly" to the trade conflict between the two countries. He declined to disclose its full contents, however.
Baker met for 25 minutes with Nakasone and senior advisors at the prime minister's official residence this evening. "I gave them an honest appraisal of the situation," Baker said after the meeting. U.S. Ambassador Mike Mansfield, a former Senate colleague, also was present.
Japanese officials said Nakasone responded that he was working hard on the problem, but was riding a "wild horse." He also said the United States needs to act against high interest rates, which the Japanese and many Americans see as a major cause of the trade imbalance.
Baker, who has been practicing law since his retirement from the Senate, was making a private visit to Japan. But he was accorded the honors and access of an important government leader by the Japanese, who are aware of speculation in Washington that he might emerge as a presidential candidate.
Baker also took his message on the danger of protectionist legislation, which he said could be passed this year, to Foreign Minister Shintaro Abe, Finance Minister Noboru Takeshita and to the American Chamber of Commerce in Japan and the Tokyo Stock Exchange.
Baker's visit here came as trade tensions with the United States, which had reached the boiling point this spring, cooled off. Congressional leaders have said they will delay action on a variety of protectionist bills to give Japan time to make good on promises to open its market.
At a press conference, Baker spoke positively of a proposal circulating here that Japan head off protectionist laws in the United States by imposing a surcharge of its own on exports, a form of voluntary restraint of foreign sales.
The Japanese, meanwhile, plan to announce tariff cuts on a series of high-visibility individual items later this month and unveil a more far-reaching package of market-opening measures in July.
In another related development, the Ministry of International Trade and Industry (MITI) announced today that 60 major Japanese companies have devised import promotion plans that will take their purchases of foreign goods about $2.5 billion higher than would have been the case otherwise.
Executives from the group, which includes giants like Toshiba, Nissan and Kobe Steel, were given "They have decided they will give preference to imported items where conditions like price, quality and delivery are equal." -- Japanese trade official Toshikazu Nasu a pep talk at the ministry in April and asked to draft and implement detailed plans for increasing foreign purchases. This is intended to help reduce Japan's trade surplus, which reached $37 billion with the United States last year.
MITI import division director Toshikazu Nasu told foreign journalists today that 13 of the companies plan to tilt toward foreign goods. "They have decided they will give preference to imported items where conditions like price, quality and delivery are equal," he said.
When routine expansion of imports is included, the 60 companies' foreign purchases will rise by about $5 billion, or 5 percent in the year that began April 1, Nasu said.
Nasu said he did not have figures for how much the companies' exports will rise in the same period. But he said the important point was that companies that do well in the export trade are making an effort to help out on imports, too.