Back Once More from the Brink

June 29, 1995

It was grand campaign crisis management. President Clinton's resolute stand averted the damaging trade war with Japan that he had threatened. Having talked tough, he claimed a "great victory" yesterday. The terms appear to open the Japanese market somewhat and to increase the American labor component of cars sold in America. Mr. Clinton stole Ross Perot's third-party thunder. If only the election were this year.

By next year, the pattern of going to the brink with Japan in all manner of trade negotiations and resolving them by showy compromise at the final hour will be remembered, while this particular episode may have been forgotten in the general blur of subsequent events.

Japan's politically ambitious trade minister, Ryutaro Hashimoto, persuaded the United States not to slap 100-percent tariffs on 13 makes of luxury car, the immediate victims of which would have been Americans employed in their sales and servicing. In return, U.S. trade negotiator Mickey Kantor maneuvered the Japanese out of taking the U.S. into the first test case of World Trade Organization dispute-resolution machinery.

The U.S. managed to avoid taking an action that its European trading partners all said, with no sympathy whatever, undermined the WTO, which the U.S. had negotiated so hard to create.

President Clinton was able to assure the American people the agreement was "measurable," while Japanese officials swear that Prime Minister Tomiichi Murayama avoided "numerical targets." Each side is able to let the other claim victory.

One difficulty in the negotiations was that Mr. Murayama's coalition government is so weak, so patched together by transparent tape, that it could not make a meaningful concession, especially when hanging tough was such good politics for each side. From that impasse came the possibility that the loudly made threats might have to be carried through, to everyone's detriment.

But the Japanese had the answer to that. Their government did not make the concessions; the private auto manufacturing companies did. On cue, Toyota, Nissan, Honda, Mazda and Mitsubishi announced their increases in North American production of parts and vehicles, including new plants. Despite some ambiguity, it all sounded suspiciously numerical (but that is Mr. Murayama's problem).

It was a satisfactory conclusion to a contrived crisis. The movement toward greater world trade, in everyone's interest, is not thrown in reverse. All's well that ends well.

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