Batten down the hatches, for we're off to an early start on the protectionist demagoguery that accompanies election years. Evidence that it's going to be hot and heavy in the 1984 campaign comes with a war of words between Washington and Tokyo on auto quotas.
It started at a breakfast meeting of the Japanese Automobile Manufacturers Association in Tokyo June 30 to meet Sosuke Uno, the new Japanese trade minister. Takashi Ishihara, president of the Nissan Motor Co. and head of the Japanese Automobile Manufacturers Association, rose and expressed the hope Japan would abandon "voluntary" restraints on car exports to the United States when they expire next year.
Uno was noncommittal. He said that his policy guidance still relates to the original announcement on quotas made in May 1981. At that time, Japan, under heavy pressure from the Reagan administration, agreed to an annual quota of 1.68 million cars a year for two years, with the possibility of an extension for a third year.
A few months ago, at the urging of trade ambassador Bill Brock, Japan agreed to the third year of quotas, running through March 1984, but rejected his suggestion for an early approval of a fourth year.
But Uno's remarks touched off a storm. News stories in American papers said flatly that the Japanese government had decided that the quota deal would be dead next year. Secretary of Commerce Malcolm Baldrige's interpretation was that the Japanese had said "they are not even going to negotiate for a fourth year."
Reliable sources suggest to me that all Uno was trying to say was that there was nothing automatic about extension of quotas next year. Almost certainly, the Nakasone government was not trying to signal there would be no negotiations. But the overreaction of American officials to a fragmentary news bulletin from Tokyo suggests how touchy this issue is going to be in a political year.
Michigan Democrat John D. Dingell, an influential congressman on trade issues, was also quick off the mark, telling Uno that he faces a protectionist backlash.
"This kind of practice is going to destroy the recovery," howled Dingell. "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."
But Dingell is more sophisticated than he sounds. As he knows, after three years of depression, the American car market is showing signs of life. And the Japanese manufacturers, a maverick group that doesn't easily knuckle under to government dictation, are demanding a share in an improved car business, if American consumers want to buy their cars.
In a presidential election year, an issue like automobile quotas isn't likely to be settled, as it should be, on the economic merits alone. What is likely to ensue now is a long and difficult negotiation that logically will wind up with some extension of the quota system--but perhaps with more generous numbers than a 1.68 million limit. The reason, as former assistant trade ambassador Steven R. Saunders pointed out in a perceptive speech to a Japanese audience a few months ago, is that "in the United States today, trade is politics and all politics is local."
The Reagan administration delivers a good quality of free-trade rhetoric, but as the president's decision this week to curb imports of some steel products shows, political pressures can push him into a protectionist stance: he's weakened not only on steel, but on motorcycles and textiles.
As for the Democrats, all of their leading presidential candidates, with the exception of Reubin Askew, have slipped into various degrees of protectionism.
"The danger exists," said Saunders, "that if U.S.-Japan trade relations become an attractive issue (in 1984), there is the risk that a U.S. president could be elected on a protectionist platform." Political polls have shown that despite the high popularity of Japanese products, and the general esteem that Americans have for Japanese people, there is an ambivalence caused by the recession.
All of this is well understood by Japanese Prime Minister Yasuhiro Nakasone. At a breakfast with Washington Post reporters Jan. 18-- the same one where he spoke of making Japan an "unsinkable aircraft carrier"--Nakasone said bluntly that some political limits would be placed on Japanese economic expansion.
"We will continue our efforts for economic growth," he said, "but without causing adverse repercussions on the rest of the world." Thus, it can safely be assumed that the Japanese car manufacturers' breakfast represented just the opening scene, not the final act, of a complicated Kabuki play.