The Japanese government today announced its intention of continuing the voluntary restraints on auto exports to the United States for one more year at the level of 1.68 million cars.
Japanese Minister of International Trade and Industry Sadanori Yamanaka informed U.S. Trade Representative William Brock, who is visiting Japan, of the decision.
Japan agreed in 1981 to a two-year program of export restraints with option to renew for a third year. The two-year accord expires March 31, and Japan has now expressed willingness to extend it until March 31, 1984.
During a two-hour session this evening, Brock explained the difficult situation that the American auto industry now faces and strongly indicated that the Japanese self-restraint is desirable for another two years, until March 1985.
He explained that 1984 is not a good time to discuss the matter because of the presidential election.
"I am concerned what might happen next year, in the middle of presidential primaries," Brock told U.S. reporters before the meeting with Yamanaka.
In responding to Brock, Yamanaka said his intention is only to extend the program for one year.
"Regarding the initial understanding that the voluntary restraint applied only for three years, all I can talk about is fiscal 1983," said Yamanaka. The fiscal year ends March 31.
A ministry spokesman did not deny the possibility that the Japanese government may take some action for fiscal 1984. Observers think it is certain that this problem will heat up again before long.
"Japanese have their own election in the middle of this year and if they wanted to take a look later on, it would be a different political climate here," said Brock, expressing his strong wish that Japan take some measures later, if the U.S. auto industry still is suffering in 1984.
A U.S. Embassy spokesman here issued a statement welcoming the Japanese decision, saying, "Ambassador Brock expressed his appreciation for Japan's decision, which will provide the U.S. auto industry with additional time to recover. The U.S. industry has made good progress in the past two years, but present market conditions require more time to complete its recovery."
About 8 million autos were sold in the United States last year, far below the 10-million-cars-per-year level of several years ago.
In 1980, the year before the voluntary restraint was negotiated, Japanese auto exporters accounted for 17 percent of the U.S. market. By last year, they had captured 23 percent with a much smaller number of units because the market had shrunk.
In addition, the U.S.-Japanese trade gap showed further deterioration last year. The 1982 trade deficit with Japan amounted to about $18 billion and is expected to grow to between $20 billion and $24 billion this year. It amounts to between 35 percent and 40 percent of the U.S. total trade deficit.
A source in the Japanese trade ministry said that it had decided to extend the restraints because officials fear that proposed protectionist measures, such as the local-content bill now before Congress, may become reality.
The Japanese auto industry does not seem to be happy with the government's decision. An official of a major auto company, who asked to remain anonymous, said, "While we obediently limited our export of cheap cars, the percentage of European cars drastically increased in the U.S. market. That is not fair."
Takeo Arai, an executive of Nissan Motor Co., Ltd., said that personally he thought the decision to extend the ceiling was inevitable.
"I visited the United States last fall and saw how the auto workers are suffering from the unemployment. If the Japanese government were to push these restrictions on into 1984, it would be disastrous for us. But for 1983, we can go along with it," he said.