Share this story
Close X
Switch to Desktop Site

Japan trade: it may affect US security

By the 1990s, the US military could become dependent on Japanese ''high'' technology, Reagan administration officials warn. This concern about reliance on a foreign nation for such equipment as computer semiconductors reflects increasing American frustration over Japan's inability or unwillingness to allow more US products into the large Japanese market.

The US-Japan trade deficit will likely reach an unprecedented $50 billion by the end of the decade compared with $15 billion this year, says Lionel H. Olmer, the US Commerce Department undersecretary for international trade.

About these ads

''The trade imbalance is threatening the national security of the United States,'' warns Mr. Olmer, who went to Tokyo in October for official talks. US-Japanese trade relations are reaching ''crisis proportions,'' he adds.

The White House, meanwhile, is forming a special panel of technology experts to assess whether US supremacy in ''critical'' high technology is being eroded by trade barriers in other countries - most notably in Japan but also in the European Common Market. The panel, which may take several months to complete its study, will look into any ''competitive disadvantage'' for American exports in high technology.

Japan - with half the population of the United States - represents the second largest market in the world for high technology, says Olmer. Before joining the Reagan administration, he was director of international programs for Motorola Inc., which was the first major US high-technology firm to penetrate the Japanese public telecommunications market.

Only by being able to compete freely in Japanese and West European markets can the US high-technology industry hope to retain world supremacy, says Olmer.

Friction has grown between the world's two largest free-market economies as their trade has risen a spectacular 17 to 20 percent, mainly in Japanese exports to the US. American officials have sought ''reciprocal access'' to Japanese markets. But, Olmer says, it was recent European trade barriers on some Japanese products that created a stir in Japan.

Japanese officials have proposed ''emergency'' imports of about $5 billion of foreign goods - such as whiskey and chocolates - over the next few years to reduce the trade deficits. But US officials say they believe more fundamental bureaucratic and cultural barriers to foreign imports will need changing.

''The Japanese are an insular people,'' says Olmer. ''They are just beginning to become aware of the problems caused by huge trade deficits in other countries.''

About these ads

To convince Japan that it discriminates against US products, the US Department of Commerce has begun to collect data from willing US companies on their competitive stance in world markets compared with similar Japanese companies. The department will scan data from four business sectors - petrochemicals, pulp and paper, medical instruments, and soda ash - as examples of US competitiveness. The study may be expanded to the high-technology industry.

''American companies can have a 20-to-25 percent cost advantage on world markets, but hold only a 2-to-3 percent share of the Japanese market,'' he points out. ''Japan may not be convinced by the study, but there is some reason for optimism. What else can we do?'' Olmer asks.

''We are not out to get the Japanese. This is not a star chamber,'' he says, referring to the secret court trials of late medieval England.

US Commerce Secretary Malcolm Baldrige is concerned that too much US pressure on Japan could ''poison'' the relationship, and touch off a trade war, says Olmer.

But concern that the US Department of Defense may become dependent on the technical expertise of another country keeps US pressure on Japan.

Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.