Trans-Pacific Candor

April 17, 1993

Rarely in the complicated American-Japanese relationship has there been such an open airing of differences as at the conclusion of President Clinton's White House meeting yesterday with Prime Minister Kiichi Miyazawa. They agreed on a "new framework" for negotiations on structural and sectoral problems that contribute to the huge U.S. trade deficit with Japan, but they were really far apart on fundamentals.

It was Mr. Miyazawa, and only Mr. Miyazawa, who spoke of "free trade" and denounced "managed trade" and [U.S.] "unilateralism" -- a breathtaking form of confrontation for a Japanese leader.

Mr. Clinton, saying he did not wish to "paper over" continuing disputes, insisted on greater access to Japanese markets and made it clear his administration is very much in the "managed trade" mode. Lauding the kind of agreement that has successfully goaded Japan to import 20 percent of the semiconductors it consumes, the president called for similar arrangements for autos, auto parts, supercomputers, electronics and agricultural products. This, despite Mr. Miyazawa's statement before leaving Tokyo that the semiconductor agreement was a "mistake" he did not intend to repeat.

Toward the end of a joint press conference, Mr. Clinton might have stretched propriety by quoting Mr. Miyazawa's private observation that the $116 billion stimulus package unveiled on the eve of his Washington trip might not be enough to correct the current trade imbalance. He also implied Mr. Miyazawa had accepted the Clinton concept that "we should examine these things sector by sector as well as some of the structural problems."

Behind this verbiage lies cavernous discord. When you talk of "structural" problems you are talking about Japanese habits that cause that nation to consume only 56 percent of its gross domestic product as compared to 68 percent in the United States. The Bush administration was ready to concede that trade tensions would remain intractable until this gap narrows appreciably. The "sector-by-sector" approach stressed by Mr. Clinton represents a definite switch of U.S. emphasis -- a readiness by the administration to select which industries should get special help to expand their exports, even if this opens it to charges of promoting a government-managed "industrial policy." Japan, at least until now, has philosophically opposed this approach -- as have free traders and economic conservatives in the United States.

So there is much to be "hashed out" (the president's phrase). Still, both leaders deserve credit for bringing trans-Pacific candor to a new high.

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