The Japanese government declared yesterday it would not extend its limits on auto exports to the United States past next March, sparking immediate cries for trade retaliation from Capitol Hill.
"The voluntary restraint will not be extended," International Trade and Industry Minister Sosuke Uno told leaders of Japan's auto industry at a Tokyo breakfast meeting.
The announcement appears to be a far more definitive answer than previous Japanese statements to U.S. Trade Representative William E. Brock's request that the export restrictions be continued for a fourth year.
The Japanese agreed in February to extend the restraints only for a third year, while leaving the possibility open for further action for 1984.
Brock had warned the Japanese that delaying a decision would place the issue of the fourth year of restraints squarely in the middle of the United States' presidential campaign. Trade is promising to become a major campaign issue, with Democratic candidates staking out a more protectionist stance than the Reagan administration.
Since April 1981 the Japanese have limited their auto exports to the United States to 1.68 million cars a year under an agreement set to last for two years with an extension for a third year subject to negotiations.
After three years of depressed sales, the U.S. auto market has begun to revive, with sales of American cars reaching an annual rate of nearly 7.4 million units in June, one million more than the May rate. Japanese carmakers don't want the voluntary restraints curbing their share of this recovery.
Congressmen from auto producing states replied to the Japanese announcement with renewed cries for protectionist legislation. The announcement appeared to give added impetus for passage of a domestic content bill by the House this session.
"This kind of practice is going to destroy the recovery. When the next recession comes, the Japanese will have 25 to 30 percent penetration of the U.S. auto market. That is exactly what the Japanese intended and just what those bunglers at the White House don't understand," said Rep. John D. Dingell (D-Mich.), the chairman of the House Energy and Commerce Committee.
He added that he plans to introduce legislation early in July setting quotas on Japanese auto and steel exports to the United States, "which I propose to push."
Dingell's blast was echoed by Sen. Donald W. Riegle Jr. (D-Mich.), who told the Michigan AFL-CIO convention in Detroit, "The time has come to close America's door to the flood of Japanese imported products.
"The continuing Japanese attack on our basic industries is another Pearl Harbor and by their narrow and selfish pursuit of blatantly unfair trade practices they have destroyed the jobs and homes of millions of Americans."
The Michigan congressman's committee passed in June a labor-supported domestic content bill that would require the largest selling brands of imported cars, all of which come from Japan, to be made in large part by American workers using U.S. parts. The bill did not appear to have as much support this year as last, when it passed the House in the waning days of the session, but yesterday's announcement from Tokyo was seen as injecting new vigor into the legislation.
Another member of Dingell's committee, Rep. James J. Florio (D-N.J.), challenged the Reagan administration to take action to help the American auto industry. "We can no longer rely on capricious concessions of our trading partners," he said in letters to Brock and Commerce Secretary Malcolm Baldrige.
Chairman John Danforth (R-Mo.) of the Senate Finance Committee's trade subcommittee said he doesn't take Uno's declaration as Japan's final word on extending auto export limits. "I believe a fourth year of restraints can be achieved," he said, recalling the Japanese balked at any restraints in 1981 until he and Sen Lloyd Bentsen (D-Tex.) introduced import quota legislation.
"The government of Japan must be sensitive to congressional determination to fashion a fair bilateral trade relationship," said Danforth, considered a moderate on trade issues.
"Certainly my expectations of a fourth year of restraints is consistent with what Prime Minister Nakasone indicated to me and other senators in January," he continued.
In an unconnected action, Brock's office announced yesterday it will file its first complaint with the General Agreement on Tariffs and Trade (GATT) over Japan's import restrictions on agriculture goods from the United States. The complaint covers 13 food products, but not the contentious issue of Japanese limits on imports of U.S. beef and citrus.