Perhaps no one is in better position to assess the tension between the United States and Japan than Ambassador Mike Mansfield, the former senator from Montana who last month completed his eighth year in his post.
Many Japanese to whom I've talked over the past 10 days would prefer to believe that the present difficulties are deja vu, just another sparring round between U.S. and Japanese trade interests. Officials such as Makoto Kuroda, director of MITI's international trade policy bureau, despair that anything can be done about it. "The situation is in a sense unreasonably emotional, and we're worried," Kuroda said. "I can't see any solution to calming down these mounting frustrations."
Mansfield agreed. "This is the most serious and difficult period in our relationship," Mansfield warned. He looks beyond economic issues: "Remember, this is the most important bilateral relationship in the world. And we haven't had a better friend and ally than the Japanese."
The conventional wisdom among Reagan administration officials is that Prime Minister Yasuhiro Nakasone is doing the best he can to open up the Japanese market to greater imports but is being frustrated by the bureaucracy. But others well-clued into the process insist that Nakasone "is as good an actor" as Ronald Reagan, posing as a believer in open markets, but failing to demand support from his Liberal Democratic Party faction in the Diet. "Nakasone doesn't want to try too hard," says one observer. "He can't afford to alienate his rural supporters in the LDP."
Whatever the intricacies of Japanese party politics, it seems clear that against the huge U.S. trade deficit -- which has become a a sponge soaking up exports -- the highly touted "action program" Nakasone promised Reagan will be almost meaningless.
In any case, Mansfield doesn't welcome high- handed moves that would attempt to punish Japan. He recognizes Congress' frustrations but believes it has "become mesmerized by that $36 billion trade deficit of last year." They should pay more attention, he said, to the global nature of the problem: Last year's U.S. deficit with the world was almost double 1983's, at $123 billion.
Moreover, the latest proposed nostrum, a 20 percent American import surcharge, would be useless. As Kazuo Nukazawa, director of the international-affairs department of Japan's largest business federation, points out, a further depreciation of the yen against the dollar would soon wipe out the effect of the surcharge.
Mansfield accepts the view among economists here and in the United States that most of the problem can be attributed to the overvalued dollar. And that, in turn, is the consequence of too loose an American fiscal policy and too tight a Japanese fiscal policy.
Like his friend Kiichi Miyazawa of the ruling Liberal Democratic Party here, Mansfield would like to see Japan expand its spending at home for housing and public projects. Miyazawa is one of a short list of LDP leaders who may some day occupy the prime minister's office. He believes that for all of Japan's economic might -- at least in the foreigners' perspective -- Japanese families lack prosperity in a true sense. The foremost deficiency is adequate housing: Japanese bristle at Sir Roy Denman's denigrating description of their "rabbit hutches," but they admit it accurately describes many Japanese homes or apartments. Perhaps less than one-third of the homes in Tokyo have a direct sewer connection. Roads are in bad repair. Public park space in Tokyo is a pitiful one-twentieth per capita of what's available in Washington, D.C.
Investing more money at home, Miyazawa believes, is not only urgent to rebuild public "assets," but would stimulate economic growth, attract more imports and reduce capital outflows, thus ultimately strengthening the yen.
But the Nakasone government resists any new fiscal stimulus, citing the already large budget deficit, despite an inflation rate of only about 1 percent. "Just the words 'fiscal deficit' scare the hell out of the Japanese," says Keiko Atsumi, a journalist who has studied in the United States.
Alan Wolff, former deputy trade representative, put the issue neatly in a recent speech: The United States is on an overconsumption binge, and Japan is underconsuming to a like degree. "This is why there is no fundamental solution to U.S.-Japanese relations to be found in any specific list of tariff or nontariff barriers to be removed by Japan," Wolff said.
All this is not to say that Japan (which in fact has been opening its market some) shouldn't abandon remaining protectionist devices. "Most Japanese," says Atsumi, "have a hard time admitting that we do anything wrong."