U.S. needs to boost trade with Japan but how?

SUNDAY OUTLOOK

April 24, 1994|By John E. Woodruff

Record-breaking U.S. trade deficits with Japan have sparked new threats of retaliation from Washington. In Tokyo, the prime minister's resignation has raised questions about negotiations that got started only last summer. Is it time to consider sanctions against Japan? What can U.S. policy makers do?

I. M. Destler

Professor and director, Center for International and Security Studies, University of Maryland

Record-breaking U.S. trade deficits with Japan essentially reflect the weakness of Japan's economy, which has kept purchases of United States products from growing significantly since 1990. By comparison, from 1986 to 1990, when the Japanese economy was booming, Japan's purchases from the United States doubled, and the U.S. deficit fell sharply.

Basically, persistence on a combination of sectoral and broader economic questions is the right approach. If one change is needed, it is to de-emphasize the demand for quantitative targets. That has become a cause celebre in Japan and has united Japanese proponents of more open markets with the opponents. We should place more emphasis on Japan's high prices, which are a strong indicator of a closed market.

The Japanese cabinet that is now forming seems committed to political reforms already begun. A more open and competitive political system should lead to a more open and competitive market. Where there is a good case, like Motorola a few months ago, it can be useful to talk about specific unilateral sanctions. But there is no reason to search out cases.

Rodney Trump

President, Local 239, United Auto Workers, Baltimore

The first thing is for Americans to buy American. That's the best way to bring down the trade deficit.

Since the government in Japan is run by bureaucrats, our government should be dealing with bureaucrats there.

Once you get a level playing field, the American worker will compete. If there were fair trade, the Japanese consumer, too, would be far better off.

I would like to think the two nations could resolve things, but sometimes common sense does not prevail. In those situations, I would not oppose unilateral actions by the United States. Given the astronomical trade deficit, we may have waited too long.

Barry Brownstein

Associate Professor of Economics and Finance, University of Baltimore

The whole Clinton administration Japan policy is to threaten a trade war, and that is a disaster for the U.S. consumer. In the 1980s, each job saved in the steel industry through trade restrictions cost U.S. consumers $800,000 annually.

The best way is to set an example, is to show the world the great advantages of a policy of free trade.

Only special-interest groups benefit from trade sanctions. A national trade deficit with Japan matters no more than if Maryland has a trade deficit with, say, Kansas.

Several studies have shown that the U.S. has about the same overall level of trade barriers as Japan. Barriers against sugar require American consumers to pay four times the world price.

I don't sanction or condone trade barriers by any country, but if the Japanese use trade barriers, it makes no sense for us to shoot ourselves in the foot by doing the same.

Andrew Gordon

Director, Office of International Trade Maryland Department of Economic and Employment Development

Japan is Maryland's No. 4 export market. Our exports to Japan grew nearly 27 percent in 1993, so we're doing better with Japan than with some other countries.

Do Japanese markets need to be opened further? Of course. We applaud what the U.S. government is doing to open markets, but meanwhile we're doing all we can and we're meeting with some success.

We have a new corporate entry program that helps companies find marketing partners in Japan. One software company already has a partner and another is close. We require each company to send a team to Japan the first year to see just how tough that market is.

We spend more time and money helping companies find partners in Japan than in other markets, and our companies have to make a greater commitment there. But except where there is some obvious trade impediment, it eventually pays off.

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