The industrial policy talks between Japan and the United States are not going very well, and the central reason seems to be a collision in negotiating styles. The Americans start off by arguing that the Japanese government is guilty of wrongdoing, in the moral and legal sense, in helping its exporters. The Japanese rebut the charge, sometimes with a good deal of heat. And nothing happens. It's a formula for deadlock.
The Americans' accusatory style is, as a Japanese anthropologist might say, a cultural matter. Before proceeding to a remedy, the American tradition of politics and law likes to begin by establishing who has misbehaved and how. That habit of mind is particularly strong in the present administration, with its firm belief in the merit of open competition. Government intervention is justifiable only if one competitor can be shown to have used unfair tactics--right?
One ostensible purpose of the talks is to develop accurate information on the way the two countries' industrial policies work in practice. That may turn into a useful exercise, in view of the present confusion over the meaning of the term. But the American negotiators want mainly to talk about Japan's industrial policy, since, they claim, the United States doesn't have one.
It is rarely good negotiating practice to deny the obvious, and it is particularly foolish to maintain -- as the American delegation did here when the talks opened last week--that the U.S. government is not deliberately and vigorously supporting the development of the American computer industry. Back in Washington, there is very little hesitation among officials at the Defense Department, NASA, the Energy Department or the National Science Foundation to talk about that interesting subject.
The indictment of Japanese industrial policy in its most sweeping form--by American machine tool makers, for example--charges that it involves cartelized research and development with direct financial support for private companies from the government. Meanwhile, a dozen American microchip manufacturers have obtained a conditional antitrust waiver from the Justice Department and are organizing joint research through the new Microelectronics and Computer Technology Corp. As for financial support, the U.S. Defense Department alone intends to put as much money into advanced computers over the next several years as the Japanese government is allocating for its fifth-generation computer project.
It's quite true that much of the American research money will be spent through grants to universities. But it is also true that public funding for universities and their laboratories has always been the most important route of government subsidization of American industrial technology.
Since American government agencies are actively working to maintain the superiority of American technology in crucial fields, it is difficult for Japanese officials to see why they shouldn't do the same thing. They tend to shrug off American complaints of illicit trade tactics as posturing in a negotiation the ultimate purpose of which is not clear to the Japanese-- or, they suspect, to the Americans themselves.
These industrial policy talks were initiated by the White House after President Reagan turned down a machine tool manufacturer's demand for protection from the Japanese. The debate within the administration had swayed back and forth for months at the Cabinet level, and the talks have the aspect of a consolation prize for the aggrieved machine tool industry. But the basic issues in the machine tool case remain unresolved among the Americans, and the Japanese are sharply aware of it. As one Japanese official put it, no one on Earth has a finer sense of this kind of infighting than a Japanese bureaucrat.
The Japanese are well aware of the internal quarrel within the Reagan administration over the reorganization of the Commerce Department, and the struggle over turf between Commerce and the office of the president's trade representative. They are well informed on the debate within the administration over the conflicting goals of controlling high-technology exports and promoting them. These continuing disputes make it easy for the Japanese to dismiss American positions as mere responses to domestic political pressure.
It might be more productive for American trade negotiators to stop treating the Japanese government like the defendant in a lawsuit. Why not try to work out a no-fault consensus in the Japanese manner? But before that happens, the Reagan administration would have to arrive in the Japanese manner at its own internal consensus on industrial policies for the United States.