The long dispute over Japanese auto exports appeared settled today with a promised export reduction plan that U.S. trade representative William Brock said he expected would halt a congressional drive to impose quotas.
Brock's comments came before Sen. John Danforth (R-Mo.) announced in Washington that he did not intend to proceed with legislation to curb such exports.
After endorsing the plan in a final meeting with Japanese officials, Brock said the plan, which would cut exports this year by 7.7 percent, would almost certainly end chances of Congress passing restrictive legislation.
"The prospect of legislation passing Congress is just not acceptable to me.
I don't believe there is such a prospect," he said.
Brock told reporters that he based that judgment in part on a telephone conversation with Danforth, who introduced a quota bill that would clamp tighter restrictions on Japanese auto imports.
He left the impression Danforth agreed with his assessment, even though Brock acknowledged that the new Japanese plan is "far, far less" restrictive than the Senate bill.
The settlement represented a compromise in which the Japanese government, despite the objections of the auto industry, agreed to force auto makers to curtail exports for at least two years to avoid a worse fate in the form of a smaller quota fixed by Congress for three years.
It appeared to remove the sticky automobile issue from contention three days before Prime Minister Zenko Suzuki arrives in Washington for a state visit. He had wanted the issue settled to avert a troublesome summit. Only if Congress balked at the Japanese plan and pressed ahead with its own quota legislation would the issue crop up to mary Suzuki's state visit.
From the details made public by the Japanese today, it appeared that the substantial difference in export volume could be small. It could amount to a reduction of 140,000 cars from the volume Japan might have shipped anyway if the compromise had not bee adopted.
It calles for limiting Japan's car exports to 1.68 million for the next 12 months, down from the 1.82 million shipped last year. Auto makers already had offered to hold shipments to the 1.82 million level for another year.
In the second year, beginning next spring, Japan would observe the 1.82 million restraint but would be free to sell more in the United States if the American car market revives sufficiently. Using the U.S. government's projections for the market in that second year, Japan estimates it will be able to sell about 1.92 million cars in the United States, considerably above the level nominally fixed in the plan.
In the third year, the level of permissible exports would be reconsidered.
The result is that the certain reduction would amount only to the 140,000 fewer cars to be sold in the first year. How much actual reduction there would be in the second the third years is questionable because it would depend on the behavior of the American car market and the unknown quantity of how many Japanese cars would have been sold without the agreement. q
The Japanese auto industry denounced the agreement. Takashi Ishihara, president of the Japan automobile manufacturers' associaiton, said it was "deeply regrettable" the plan was not limited to restrainst for one year as the industry had proposed. He said it would weaken Japanese companies' dealer networks in the United States and warned it amounted to a "great sacrifice" for the Japanese parts-making industry.
An industry official siad the agreement probably would mean an increase in prices of Japanese cars sold in the United States but the amount of the price rise would be "prudent."
Ishihara siad the industry had no choice except to obey the government's instructions.
The package was formally approved this afternoon by Suzuki after a meeting with Rokusuke Tanaka, the minister of international trade and industry who negotiated the agreement. Tanaka also explained it to Brock, who said he did not come to Japan to negotiate an agreement but reportedly advised the Japanese on what chances their plan might have of forstalling congressional curbs.
Part of the formal written statement called on Americans to appreciate the restraint agreement and urged them to "moderate the protectionist trends" in the United States. Tanaka said he thinks the measure would block the Danforth bill and expressed a hope the "protectionist trend" would be reversed. Japan, he said, was "spending its blood" in making the agreement.
The Japanese government will monitor the cars shipments and ultimately might invoke its export control act to force the auto makers to observe the restrictions.
Brock radiated optimism today at a news conference where he told reporters the Japanese plan would please Congress. He said it would be "well-received by the United States and by Congress and there is no prospect of punitive or restrictive legislation being enacted by that body."
He said the Reagan administration had consistently opposed quota legislation as a violation of free trade principles.
Reagan had advised Japanese officials that although he opposed the Danforth bill he would find it very difficult to veto.
But Brock and other U.S. officials maintained throughout the auto dispute that the administration was not putting pressure on Japan and merely hoped the Japanese would react voluntarily to help fend off the quota legislation.
The U.S. trade officials also told reporters here that they were less concerned about the exact amount of export reduction that about the duration of Japan's restraint. They argued that a period of relief from Japanese popular exports was necessary to encourage banks to loan the American auto makers money to retool and prepare for production of smaller fuel-efficient cars.
Brock said today that the administration would have supported any decision the Japanese government made.
"We chose to not try the old tactics of negotiations but to ask the Japanese government to take its own action and we would support it," he said.
Japan's next worry is that the Common Market nations will ask for similar restraint and threaten to impose even stricter quotas than they now do. France limits Japanese cars to 3 percent of its market and Britain, under an unwritten understanding, permits only 10 or 11 percent of its market to go to the Japanese.
During 1980, Japanese cars averaged about 21 percent of the American market.
Brock said today he found it difficult to understand how Europe could demand more Japanese export restraint when those exports already are "severely restrained."
Brock's decision to endorse the Japanese proposal apparently was made overnight after several overseas telephone calls to congressmen and administrative officials in Washington.
U.S. trade officials told reporters late last night, after Brock's first conference here, that the Japanese proposals appeared disappointing and unlikely to dissuade Congress from adopting a quota.