Acting U.S. Trade Representative Michael B. Smith said yesterday that while the United States has made substantial progress in negotiating telecommunications trade with the Japanese, discussions in other areas are moving at a "glacial pace."
Smith gave the Joint Economic Committee his latest assessment of talks between Japan and the United States in the areas of telecommunications, forest products, pharmaceuticals and telecommunications. The talks, held regularly in the last few months, grew out of an agreement between President Reagan and Japanese Prime Minister Yasuhiro Nakasone last January to open up Japanese markets to U.S. goods.
"I guess I'm just a frustrated trade negotiator," Smith said, noting the slow pace of progress.
Although talks on telecommunications have "made substantial progress," discussions on trade in some electronics equipment, such as cellular radio telephones, have just begun. The United States already has settled some telecommunications issues related to the privatization of Japan's major telecommunications company.
Smith said that he has asserted the U.S. position that discussions on radios should "not have to go through the whole process again" -- covering the same ground that was covered in talks on telecommunications.
Discussions on forest products, on which the United States is attempting to have tariffs removed, has been the "slowest of all," Smith said. Talks on medicine and pharmaceuticals had just started when he left Tokyo this weekend, Smith said. He said he hoped to make good progress on that front.
Smith also discussed the effects of the partial lifting of the voluntary restraint agreement on exports of Japanese cars to the United States. The voluntary restraints "were intended to assist the U.S. companies but paradoxically have also increased the profits of their Japanese competitors, which in turn were plowed back into more innovation and productivity-increasing investments that enhance the long-term competitiveness of the Japanese industry."
The bulk of Japanese auto industry profits during the four years of restraint came directly from sales to the U.S. market, Smith said. Under the restraints, a larger share of Japanese imports were higher-priced cars with higher profit margins. About half of the profits of some Japanese car companies were put back into research and development of better vehicles, he said.
For the long-run, the restraints will have only a transitory effect on the competitive position of American firms, Smith said.
Meanwhile, former U.S. Trade Representative Robert S. Strauss and former congressman Barber B. Conable (R-N.Y.) yesterday said they were forming a private trade group called the Council on U.S. International Trade Policy to disseminate information about trade issues.
"The American public really isn't informed on trade issues," Strauss said. "There's a good deal more emotion than fact, a good deal more heat than light."
Strauss said President Reagan should use his personal popularity to push for difficult trade policies. "It's too bad the last seven-nation economic summit wasn't used to deal with this in a global way," Strauss said.