America wants Japan to meet import targets for some American goods.An unwilling Janpan has decided to draw the line.
ONCE, when Japan pressure from abroad, it would either give in reluctantly or keep quiet and hope that the fuss would die down. No longer, it seems. The Clinton administration strongly believes in exerting such pressure. Its policy is to open some Japanese markets(which it deems to be closed) by setting miport targets-an approach to trade policy that supporters call "results-oriented". This ugly term this new thurst of American trad policy, Japan is taking a stand that could lead to a trans-Pacific confrontation.
Japan's government is deeply opposed to what America's trade representative, Mickey Kantor, has called a new policy geared to "quantifiable results" for some products. It fears that the demands and threats which are part of any such policy are bound to spread-both within product groups and new areas of trade. At the summit meeting last month between Bill Clinton and Japan's prime minister, Kiichi Miyazawa, America insisted tha Japan should come up with specific measures that would enable it to meet new imprt targets. Japan's government will refuse.
Instead, Janpan is undertaking a detailed defence of its record on trade. This will first appear in the annual white paper on trade developments, due to be published on May 21st by the Ministry of International Trade and Industry (MITI) - its definitive statement on trade matters. In addition to the customary dry analysis, this year's edition will put Japan's side of an argument that has, until now, been dominated by American and European critiques. It follows another MITI report, published this week, that takes America, the European Community and other large trading partners to task for their "unfair trading practices". Both rports argue for trade governed by multilateral rules and call for the completion of the Uruguay round of trade talks.
Besides making orthy free-trade noises, MITI's defence will also tackle American criticism head on. NaoyuHaraoka, director of MITI's international trade research office, is at pains to point out that Japan is in fact more poen than other countries. Japan's average tariff on mining and manufactured goods is 2.7%, compared with 4.2% in America and 4.6% in the European Community. The report will also reject the argument that Japan needs special trade sancitions because it poerates a different sortof capitalism. It will try to do so by explaining the nature and future of the country's trade surplus.
It is this persistent surplus, more than anything, that has provoked anger in Washington-and Mr Cliunton's remark that"the possibility of obtaining real, even access to the Japanese growing fast. Jesper Koll, a Tokyo-based economist at S.G. Warbury, estimates that Janpan's trade surplus could reach $200 billion if the yen stays an current levels. That is $68 billion more than last year's figure. Moreover, the bilateral surplus with America is also growing rapidly. Mr Koll reckons it will climb from $44 billion in 1992 to $78 billion this year, an all-time high. With the economy still barely growing, despite two fiscal packagtes in the past nine months, Japan's critics say that the country is noce more exporting its way out of recession.
One defence the ministry will make is that most trade statistics ignore services. MITI estimates, using date from the Bank of Japan, that if Japan's imports of services had been included in its trade statistics, then the trade surplus would have been $48 billion, $48 billion lower than reported. Exclusive attention to trade in goods is therefore misleading. MITI wants to see better collection of staistice for trade in services by international bodies such as the OECD.
