Secretary of State George P. Shultz and Japanese Foreign Minister Shintaro Abe agreed yesterday to begin accelerated talks on reducing Japan's technical standards for telecommunications equipment "to a bare minimum" on Monday in Tokyo, in hopes of completing them prior to next month's economic summit.
The agreement, reached at a two-hour meeting here, was one of a series of steps cited by Shultz and Abe as evidence of "considerable headway" toward further opening Japan's markets to U.S. products and achieving the liberalized trade and tariff reductions promised Tuesday by Japanese Prime Minister Yasuhiro Nakasone.
Telecommunications is one of four areas where the United States wants to achieve greater access for American-made products. Shultz said that, in order to prevent cumbersome technical standards from blocking the sales of U.S. telecommunications equipment, Japan has promised to reduce them to "those needed to prevent harm to the network, harm to users or cross-talk."
But, while Shultz read a list of other "concrete and specific things" that he said show evidence of Japan's good faith, he also made clear that they are what a senior U.S. official later called "stages in a process," and not ends in themselves.
"We must begin to hear the cash registers ring," Shultz said in an implied warning that Japan must move quickly to reduce its burgeoning trade surpluses if it is to avoid a wave of protectionist reprisals from Congress that would imperil the U.S.-Japanese relationship.
"We are all threatened by protectionism," Shultz said when he and Abe appeared briefly before reporters. "Protectionism is not a cure for an illness. It is itself an illness, and one that can spread like a plague."
The senior official, who briefed reporters later on condition that he not be identified, stressed that the most important aspect of yesterday's meeting was not agreement on technical steps but Shultz's emphasis on "conveying directly to the foreign minister the strength of feeling in this country, particularly the feeling of the secretary of state himself."
"If he Shultz says he's worried, then they are certain to be more aware that time is running out and that we have got to speed up the process," the official said.
Still, the trade-liberalization promises made by Nakasone marked only the beginning of a long negotiating process that is expected to cause considerable friction. For that reason Shultz and Abe, in their public remarks, sought to emphasize the concrete steps discussed yesterday.
In the telecommunications area, Shultz said: "U.S. companies may certify, using their own test data, that their products meet Japanese standards, thus avoiding the potential market interference of cumbersome testing processes. Japan has stated that it will work with us promptly to reduce the number of standards to the bare minimum. The foreign minister told me that this effort would be based on reducing standards to those needed to prevent harm to the network, harm to users or cross-talk."
Shultz added that he and Abe "agreed that we would make every effort to complete this review, if possible, prior to the Bonn summit."
The senior official, while acknowledging that this is the goal, said that "it will put a very big burden on the negotiators." He indicated that the effort probably will take longer than the month remaining before the summit.
In addition to telecommunications, the other areas targeted for liberalization by President Reagan and Nakasone when they met Jan. 2 in Los Angeles are pharmaceuticals and medical equipment, sophisticated electronics such as satellites, and forest products.
Shultz said Abe had assured him that "good progress can be expected when talks resume" in the medical equipment and electronic areas. In regard to forest products, where the Japanese have strongly resisted lowering tariffs on U.S. imports, Shultz said that he was "heartened by the foreign minister's affirmation" that all issues, "including the important issue of tariffs," can be put on the table for discussion.
Shultz also warned that "trade-opening measures are not going to solve the trade deficit problem by themselves." Also involved, he argued, are such factors as U.S. economic growth in relation to other trading countries, the flow of funds into this country and their effect on the value of the dollar, and the imbalance between savings and investment in Japan.
In a speech on U.S. economic policy at Princeton University last Thursday, Shultz said that Japan should seek to boost investment and domestic consumption as a way to have full employment without having to maintain a large trade surplus. The senior official said today that Shultz had reiterated to Abe the U.S. view that Japan must address that problem by taking action to lower its high rate of domestic savings and encourage greater domestic investment.