A Commerce Department official yesterday said that Japan refuses to allow foreign companies to bid on its big construction and engineering projects but its firms get major jobs in the United States.
"It's very clear that the Japanese want to protect their own industry. At the same time, they want to participate in our open market. Mr. Chairman, that just ain't fair," Assistant Secretary of Commerce H. P. Goldfield told the Senate Foreign Relations Committee's East Asian and Pacific affairs subcommittee.
He said Japan has blocked U.S. and other foreign companies from participating in one of its largest public works projects, the building and design of the $8 billion Kansai International Airport in Osaka, "despite its international responsibility and its commitment to an open market."
While American firms can't do work in Japan, Goldfield said, 18 Japanese companies have won $1.7 billion in construction business in the United States. The American subsidiary of a Japanese firm, moreover, won a $20 million government contract to build the U.S. Embassy in Cairo with a bid that was just 1 percent lower than one by a wholly owned U.S. company.
Sen. Frank H. Murkowski (R-Alaska) pushed Goldfield to intensify pressure by high administration officials so highly competitive U.S. service industries -- such as construction, engineering, banking, insurance and securities -- can have equal access in Japan.
Raymond J. Hodge, senior partner in the U.S. engineering firm of Tippets-Abbett-McCarthy-Stratton (TAMS), went even further in testimony on behalf of the International Engineering & Construction Industries Council.
"It is my opinion that the best solution for getting the attention of the Japanese government is to impose trade restrictions on the Japanese in undertaking contracts in the United States or with U.S. funds," he said.
Yesterday's testimony spotlighted a new trade dispute between the rest of the world and Japan that senior Japanese diplomats acknowledge is hard for them to defend. Britain, for instance, won equal treatment for its banks last year only by denying licenses to Japanese banks and security firms to operate in London.
And some American lawyers are complaining that a law passed last month by the Diet (Japanese parliament) to allow foreign lawyers to practice in Japan actually will close the country to attorneys who want to help U.S. businesses. Hawaiian attorney Richard S. Kanter said only lawyers for Japanese companies will be able to open Tokyo offices, while attorneys for U.S. companies who want to do business there still will be barred.
In his Senate testimony, Goldfield said Reagan administration trade officials have tried without success to get Japan to open the Osaka airport project to international bids. Pressure to open up the project also has come from Britain, France, Italy and South Korea.
One Commerce official, Assistant Secretary Joseph Dennin, was told by airport officials in Osaka "that the project was a 'political' matter, which could only be decided in Tokyo," Goldfield said. "In Tokyo, officials insisted it was purely a 'commercial' matter to be settled in Osaka," he said. "The messsage was clear: There would not be international bidding for the design and construction phases of the project.
"The Japanese government continues to insist that open bidding is not appropriate because of the technical difficulties involved in the project. We will continue to apply pressure through all available channels at each and every opportunity," Goldfield said.
Hodge said his company believes "it would be a waste of our financial and manpower resources to pursue the matter of the airport in Osaka with the Japanese. It is our opinion, based on our experience, that they do not intend to award any of this project to U.S. engineering or construction firms."