AMERICAN BUSINESSES' shrieks and groans over Japanese competition are growing more insistent. The Reagan administration knows that it is going to have to respond somehow, and is trying to find ways that promise the least damage to the principle of open markets. The rising protests have something to do with the recession, but the immediate cause is the declining price of the Japanese yen against the dollar. The Japanese are managing to run their economy with very low inflation and low interest rates. The low interest rates depress the yen. That's not so good for Japan's standard of living, but it reduces the prices of Japanese exports and makes them more ferociously competitive than ever.
William E. Brock, the U.S. trade representative, now says that the administration will pursue American access to foreign markets as a goal for negotiation. That's a sensible way to put it--and a great improvement over the concept of reciprocity that has suddenly become very popular in Congress. The trouble with the reciprocity rule is the implication that its supporters mean to use it less to open other countries' markets than to close this one.
It's quite true that Japan sells much more in the United States than it buys. It's also true that Japan, in many ways, discourages imports of manufactured goods and particularly consumer goods. Does that injure the United States? Not the country as a whole. While Americans buy more from Japan, they sell more to many other countries. American foreign accounts are nicely in balance. The pressure for better access to Japan comes mainly from the companies that want to sell there.
Better access is a good goal, but people in Congress need to keep the consequences clearly in mind. If Japanese consumers were persuaded to buy more American goods, the yen would drop even lower. That would make Japanese cars, steel and television sets even cheaper and more competitive here.
As trade expands, you can be sure that you will hear from the industries under pressure from the imports. When they lose, who gains? Not only the people directly employed in the export industries, but consumers generally. The imports give them a wider choice of goods to buy, and push prices down. That's why open trade increases American prosperity. Reciprocity, when it means retaliatory trade barriers, does not.