Presidential aide Robert S. Strauss yesterday delivered a thinly veiled warning that the United States will respond to what it considers a "Buy Japan" policy for that government's purchasing with a "Buy American" approach of its own.
That would cut Japan off, it was learned, from bidding on $12.5 billion annually of U.S. government business. In addition, according to Rep. James R. Jones (D-Okla.), sentiment is growing on Capitol Hill for even stiffer retaliation in the form of a 15 percent surcharge on all Japanese imports.
Jones is chairman of a House Ways and Means Committee task force on U.S. Japanese trade. The Jones panel has been urging a reduction in Japan's huge trade surplus with the United States- $13 billion last year-without reverting to openly protectionist measures such as import surcharges. But yesterday, Jones said such steps may not be avoidable.
The current impasse stems from a dispute between the two countries over the extent to which government (and in Japan's case, so-called public corporation) buying should be opened to competitive bidding, as part of the multilateral trade negotiations. The MTN proposals will be considered by Congress shortly.
Prime Minister Masayoshi Ohira, who will meet with President Carter in Washington next week on a variety of bilateral issues, told reporters in Tokyo on Wednesday that Japan would not yield further to U.S. pressures relating to puchases by the giant Nippon Telephone and Telegraph Co.
Japanese negotiators had agreed, as part of the MTN package, to open up $7 billion worth of NT&T purchases to all bidders, including foreign suppliers. But Strauss complained that sophisticated technology items, including telecommunications equipment, switching gear, and computers were not included.
In testimony yesterday before the House Ways and Means Committee Strauss said that the United States had reached an accord with Japan "on almost every aspect" of the MTN except the NT&T orders.
"But they haven't met our minimum requirements on government procurement, which are reasonable," Strauss said, adding that the United States "will resolve or deal with the problem [by] reciprocity here at home in the implementing [MTN] LEGISLATION."
IN A PRIVATE CONVERSATION, STRAUSS MORE POINTEDLY SAID THAT "THE JAPANESE ARE MISREADING THE SITUATION. THEY SEEM TO FEEL THAT IF I STEP OUT OF THE [TRADE NEGOTIATING] PICTURE, THEY WILL HAVE SOMEONE EASIER TO DEAL WITH. BUT CONGRESS WILL BE EVEN TOUGHER ON THEM."
STRAUSS EARLIER THIS WEEK WAS NAMED BY PRESIDENT CARTER TO BE HIS SPECIAL AMBASSADOR TO HELP EGYPT AND ISRAEL NEGOTIATE SELF-RULE FOR THE PALESTINIANS. BUT STRAUSS SAID YESTERDAY HE WILL STAY IN THE TRADE JOB UNTIL CONGRESS ACTS ON IT, PRESUMABLY THIS SUMMER."WILD HORSES COULDN'T PULL ME AWAY," STRAUSS SAID.
THE ISSUE OF NT & T procurement is symbolic of the U.S. belief that Japan must open its markets more fully to imported manufactured goods. And beyond the symbolism, there are substantial dollar volumes of goods involved.
Jones pointed out that Japan sells the United States about $300 million annually in telecommunications equipment. But with NT & T as the largest Japanese purchaser of such goods effectively shutting its doors, imports from the United States last year were only $17 million.
"They have a 'Buy Japan' policy," Jones said. "If we could get only 10 percent of NT & T's $5 billion annual market, that would be a big step."
Strauss aides said that for the moment they were seeking the addition of less that $1 billion of NT & T procurement opened up. "But this is a growth market for the future, and it's an area where American manufacturers can be and are competitive," an official said.
The tenseness on both sides casts something of a pall over the Ohira visit, inasmuch as an effort had been made to get the problem resolved in advance. U.S. officials said that the talks were for the moment suspended, but did not rule out the possibility that there might be some breakthrough while Ohira is here.
In his testimony yesterday, which may be his last formal appearance before the Ways and Means Committee on the MTN legislation, Stauss admitted it had some "shortcomings", but on the whole contains "concrete benefits" for industry, labor, farmers, and consumers. CAPTION: Picture, Stauss: "The Japanese are misreading the situation . . . Congress will be tougher." By James K. W. Atherton-The Washington Post