Japan's voluntary limit on car exports will ultimately benefit American consumers, restore thousands of jobs in the U.S. auto industry and have no adverse effect on prices and availability of foreign and domestic vehicles, U.S. Trade Representative Bill Brock said yesterday.
Consumer groups have contended that the limits would create a scarcity of small, fuel-efficient cars and drive the cost of foreign and domestic vehicles up as much as $400 each at a time the administration is trying to cut inflation.
In a news conference yesterday, Brock sought to counter that prediction by hailing the Japanese decision as a "very positive step" that, in the final analysis, will leave the American consumer "far better off."
Brock suggested that the benefits for the auto industry are much closer at hand. He said that U.S. auto makers, which have complained about the popular Japanese imports for more than a year, will feel the effects of the limits as early as Monday, when banks will be more willing to lend them the $12 billion to $14 billion they say they need to retool and become more competitive with the Japanese.
The limits also should provide "many, many thousands of jobs" for persons laid off in the auto industry, he said. In return for a gesture that he acknowledged was "obviously not easy," the Japanese will preserve free and expansive trade and forestall the possibility of congressionally mandated import quotas, Brock said.
The Japanese decision appeared to mark the end of a politically sensitive issue that threatened to mar talks between Prime Minister Zenko Suzuki and President Reagan on Thursday and Friday.
The two heads of government, however, will still have to deal with the issues of Japan's defense budget, the sinking of a Japanese freighter by a U.S. submarine last month and Japan's complaint that U.S. officials didn't consult them before lifting the grain embargo against the Soviet Union.
It was still unclear yesterday how the Japanese will decide how many cars each Japanese auto maker can ship, Brock said. The Japanese will announce later their plans to reduce shipments of four-wheel-drive trucks to the United States and shipments of vehicles to Puerto Rico, which totaled about 65,000 last year.
Brock said overall auto prices will not increase much because auto prices have followed a pattern of rising less than the rate of inflation and the manufacturers have pledged to use price restraint.
Brock also said that Japan's decision Friday to reduce its exports by 7.7 percent from April 1 this year through March 30, 1982, won't mean many fewer foreign cars available for sale here. Japan shipped 1.82 million cars to the United States last year, and would ship 1.68 million cars under a 7.7 percent decrease.
Shipments could increase in the second year of the plan, depending on how much the car market had grown. In the third year, Japan said it would consider whether restraint was necessary.
The import limit is the culmination of a fight waged first by the United Auto Workers union last summer when it asked the International Trade Commission to find that Japanese imports were the major cause of the auto industry's problems. The union was later joined by the Ford Motor Co., but the ITC blamed domestic economic conditions, not imports, for Detroit's difficulties.
The union and Ford then took their fight to Capitol Hill. Last January, after unsuccessful attempts to persuade President Carter to ask for import limits, different bills were introduced in Congress to reduce Japanese imports to between 1.2 million and 1.6 million cars. That pressure led the Japanese to select on Friday what they considered the lesser of two evils.