The Japanese leadership is "on the verge of a possible breakthrough" in opening its market to the United States, but Washington needs to lay out more clearly the consequences of failing to do so, according to Singapore's Prime Minister Lee Kuan Yew.
Japanese leaders "are fearful of the political costs that they will carry at home," he said in an interview last week. "So you've got to help them bring the gravity of the situtation home to their constituents."
In the next few months, he said, the Reagan administration should take advantage of the "sense of crisis" in the United States and give the Japanese "all the reasons why they can tell their voters how unpleasant it is" if Japan does not open its market.
Opening the markets, Lee said, "is a lot less unpleasant than the alternatives."
Lee, 62, the only prime minister Singapore has had, left Washington Friday after a four-day visit. The island nation's economic growth in the past 25 years and its active political role in Southeast Asia, particularly Cambodia, have given it a weight in international affairs that far exceeds its size. In an interview Friday and public comments during the week, Lee was characteristically blunt in his assessment of the trade difficulties, the political consequences of protectionist legislation and the growing world debt.
"What is at stake," he told reporters at the National Press Club, "is the issue of war and peace and not the simple preservation of jobs in plants that are no longer competitive internationally.
"People now accept as commonplace the resurgence of the dynamic German and Japanese economies without military expansionism . . . . Without free trade, we can imagine what would have happened had the energies of the German and the Japanese people in their quest for a better life been frustrated."
The Japanese, he said in the interview, do not make Sonys, Mazdas and computer chips "for the amusement of the world." They do it "in order that they will have a better life. And if they can't get a better life that way, they've got to find some way to have it."
Lee predicted that the Japanese would not be able to find a comparable market to the United States unless other "countries are co-opted involuntarily into a new bloc," similar to the different monetary blocs that arose when the world financial system was thrown into chaos in the 1930s.
The United States needs to keep the pressure on, Lee said, because so far, ". . . constant and insistent pressures have brought the Japanese around to dismantle quite a number of their obscure customs, regulations and other nontariff barriers."
After Japan recently introduced a series of market-opening measures, Lee said, Tokyo sent out a "very high-ranking official" from the ruling Liberal Democratic Party to the Southeast Asian countries in anticipation of the reaction "and lo and behold, boneless chicken exports from Thailand to Japan, which used to meet with an impenetrable barrier, also became possible; bananas from the Philippines became possible, and there was something for the Indonesians and something for the Malaysians."
Lee told reporters that "we are on the verge of a possible breakthrough. They the Japanese understand that this is an extremely difficult situation . . . . Something must give, so they are either going to face barriers or bring down their own. They are not unintelligent people. They will do the right thing."
In Tokyo, officials today, Japan time, introduced a range of consumer incentives to boost domestic spending and divert pressure from exports in response to Japan's growing trade surpluses. By spending more money on improving the Japanese environment, the government hopes to draw resources away from export industries, Reuter reported.
Lee was skeptical about U.S. Treasury Secretary James A. Baker III's plan to reduce the world debt by having governments and multinational lending institutions take a more active role.
Sooner or later, he said, there will be a realization that "the money has been spent and, in some cases, cannot be repaid because the money has not been put into investments that can repay these loans, . . . which means the taxpayer in many of the creditor countries will have to take a deep breath."