US-Japan tussle over public-works projects fits a troubling pattern. Tokyo gives an inch, Washington wants much more
One of Prime Minister Noboru Takeshita's major promises to President Reagan seems to be unraveling in an all-too-familiar pattern of talks between the United States and Japan. The Japanese announce they will open their market an inch or two for some product or service the US wants to provide. In this case, the subject is public works.
US officials react cautiously, saying they will have to look at the details. Talks take place. It turns out that the market-opening measure goes nowhere near as far as the Americans had expected. The Japanese say they have gone as far as they can, given powerful political pressures in their own country.
The US and Japan are allies with a deep common interest in security in the Pacific as well as many-faceted people-to-people ties. So public statements on both sides are reasonably circumspect. But behind the scenes, tempers are boiling.
Never far from the surface on the American side is the thought of Japan's nearly $60 billion trade surplus with the US, while the Japanese respond, sotto voce (and more and more in public), ``Why don't you put your own house in order?''
That is the background against which Mr. Takeshita, during his first US visit as prime minister, promised last month that the Japanese government would open six major public-works projects to American bidding. He also promised that, when considering US bids, Japan would take into account the construction experience the companies had outside of Japan.
Unlike the US, Japan has no open-bidding system, but designates eligible bidders from a list that ranks companies according to experiecnce and reliability. Since the only criterion is previous experience in Japan, there was no way US companies could get on the list.
The Takeshita promise did not change the Japanese bidding system. But it did at least make it possible for US companies to operate within that system.
US Commerce Secretary C. William Verity and US Special Trade Representative Clayton Yeutter reacted cautiously to the Takeshita promise. They agreed it was positive enough for the US to reopen public-works talks.
Public works have been a point of friction since the time of Takeshita's predecessor, Yasuhiro Nakasone. Japanese construction firms do several billion dollars worth of business, including public works, in the US each year. US presence in Japan in this field is miniscule.
To achieve a breakthrough, Washington decided to use the multimillion dollar Kansai International Airport now being built in Osaka Bay. Washington wanted to establish a principle: that Japanese public works projects would be open US American bidding in the same way American public works projects are open to all bidders.
The Japanese, however, wanted to proceed on a case-by-case basis. Washington compromised by suggesting that if all public works could not be opened up, a representative list of major public works could at least be made available to US bidding.
Takeshita's list of six projects was a response to this suggestion. Although much shorter than what the Americans had wanted, the list moved them to agree to come to Tokyo for discussions. Last week Michael Farren, deputy assistant secretary of commerce, led a US delegation to Tokyo.
The six projects offered by Takeshita were: the expansion of Tokyo's Haneda airport, a bridge and tunnel across Tokyo Bay, a portion of Yokohama's ambitious Minato Mirai (port of the future) project, expansion of Hiroshima airport, the Isa Bay expressway, and a bridge across Akashi Straits near Osaka.
On the very first day, said a US government source close to the talks, the delegation was startled to find that at Haneda only the runways and other earth-moving work would be open to American bidding. The design and management of the terminal building, telecommunications systems, radar, baggage-handling facilities, security systems - all the engineering work in which US firms are especially strong - would be off limits. Mr. Farren was told the terminal-building part of the project was being assigned to a private Japanese company over whose actions the government had no control.
Would the Japanese government at least give advice to this company to be fair? All American companies wanted was a fair chance to bid. But, said US goverment sources, the Japanese would not agree.
On this point, Japanese sources disagree. One source close to the talks insisted that the Japanese government was indeed ready to help American companies informally.
In Washington, the Farren delegation will report back to its superiors and to congressional aides. The House and Senate are trying to reconcile respective versions of an omnibus trade bill targeted at Japan and other countries that have perennial large trade surpluses with the US. What delegation members have to say will undoubtedly fuel demands for a ``tough'' law.
US government sources close to the recent talks say that the Japanese must open their public- works projects to American bidding in areas such as engineering, design, and systems management. Otherwise, they say, they cannot accept the list of six projects offered by Japan.