U.S. Ambassador Mike Mansfield proposed today that Japan abolish quotas and tariffs on all industrial and farm products to avoid retaliatory U.S. trade legislation.
"I have advocated it gently" with officials and business leaders here as a step that could convince the United States that Japan really wants to end its restrictions on imports, Mansfield said in an interview with The Washington Post.
"But I am going to do it more strongly with the passage of time," he continued. "Something drastic has to take place."
Although Mansfield, 82, commands immense respect in this country, his proposal is certain to draw strong opposition, especially from highly protected segments of the Japanese economy that to many Americans symbolize the closed nature of Japan's markets.
These sectors include lumber products, where 18 percent tariffs protect an inefficient Japanese industry, and beef and citrus. The United States already is the leading foreign supplier of beef and citrus to Japan, but quotas keep prices artificially high, and U.S. farmers see a great demand to be met. Those sectors, however, are politically potent within the ruling Liberal Democratic Party of Prime Minister Yasuhiro Nakasone.
"Frankly speaking, there is a limit to what the Japanese government can do," said Kazuo Nukazawa, director of the international economic affairs department of Japan's powerful and influential business association, Keidanren.
"What the Japanese government should do is what Ambassador Mansfield suggests," he continued. "That has the full concurrence of Keidanren."
Trade frictions between the United States and Japan, its foremost Asian ally, appear to have reached fever pitch. Senate Majority Leader Robert J. Dole (R-Kan.) warned during a visit here this week that Congress is almost certain to act against what it sees as Japan's protectionist trade policies with retaliatory legislation that is likely to pass with enough support to override a presidential veto.
Mansfield said Dole and other legislators who visited here this summer were honest in expressing congressional frustration with the United States' mounting trade deficit -- $123.3 billion worldwide last year, with Japan responsible for the largest share, $36.8 billion.
Mansfield said there is only a "long-shot possibility, a very long shot" of forestalling passage of retaliatory trade legislation soon after Congress goes back into session after Labor Day. This is partly because of "a strong feeling in the United States that Japan can do more but is holding back," he said.
"I think Japan is doing everything it possibly can under the leadership of Nakasone. The pace is slow. Nakasone has his difficulties. He can't wave a wand and get things done. But I am pleased with what he has been able to do -- but not satisfied."
While removing tariffs and quotas would help some products get into Japan, many U.S. businessmen say the major barriers to selling here are the complex regulations that surround many products and a distribution system that foreigners have trouble breaking into. Neither of these would be touched by the Mansfield proposal, although Nakasone is trying to simplify the regulations and encourage Japanese industrialists to buy foreign goods.
Mansfield said the U.S. trade deficit is global, and he urged Congress not to focus on Japan to the exclusion of other nations that have large trade surpluses with the United States. These include Canada, with a surplus of $20 billion; Latin America, once an area where American products commanded the market, $18 billion; Western Europe, where a U.S. surplus three years ago turned into a $17 billion deficit last year; Taiwan, $11 billion; and Korea, $4 billion.
"Japan has been the chief target because of the large size of the deficit," which is expected to reach as high as $50 billion this year, Mansfield said.
"The Japanese have an awful lot to do. They have got to open their markets much, much more."
But even if Japan opened its market completely, he said the overly strong dollar -- which pulls in imports and makes U.S. products more expensive abroad -- means at most that the Japanese trade surplus would decrease by between $10 billion and $12 billion.
Nonetheless, Mansfield said his proposal to abolish tariffs and quotas would ease the perception that Japan deliberately is blocking imports.
"I am just advancing an idea," Mansfield said. "I hope I am not impinging on Japanese sovereignty."
Nakasone announced an "action plan" to improve access over the next three years for foreign products in Japan, whose economy is the second-largest in the world behind that of the United States.
But the Nakasone plan was greeted coolly in Washington and other world capitals and described by Dole and other senators traveling with him as too little, too late.
"It isn't a case of mistrust," said Mansfield in explaining the reaction to the Nakasone plan.
"It is a case of the Japanese announcing a package and, when you open it, there is very little substance," Mansfield said. "But it doesn't mean progress has not been made. Progress has been made, but too slowly."