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Japan Vital to Northwest States


`JAPAN-bashing'' makes the Northwest states somewhat edgy. That's because Oregon, Washington state, Idaho, and Alaska have become highly dependent on trade across the Pacific.

More than 70 percent of Alaskan exports, 47 percent of Oregon's, and 28 percent of Washington's go to Japan, contrasted with 12 percent for the US overall. Some 160 Japan-affiliated firms do business in Washington and about 100 in Oregon. Billions of dollars in Boeing jets, Idaho potatoes, and Oregon logs (every fourth truckload) head for Japan every year.

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``In the Pacific Northwest, the `Pacific Century' is not some idea on the horizon. It is reality right here and now,'' says US Senator Mark Hatfield (R) of Oregon. There is also concern that the new face of Europe could be particularly grim-visaged for both the US and Japan.

As a result, Many officials and experts are concerned by hardening attitudes on both sides of the Pacific. Polls show that most Americans believe Japan's trade and investment policies are more of a threat than Soviet military might, stimulating political ``Japan-bashing.'' Some Japanese leaders urge an uncharacteristically prickly ``just say no'' response to US trade demands.

For the Northwest, the relationship with Japan is the essence of United States foreign policy, as it has been for 30 years. Those peering into the 21st century look almost exclusively to the East.

``We're going to see a tendency in Europe to put up trade barriers which may well require that 60 to 70 percent of their goods be produced at home. This will cause a market standard that will be difficult for the US or Japan to penetrate,'' warns Oregon's other US Senator, Bob Packwood (R). ``Therefore, the US relationship with Japan is critical, not just in trade between the two countries, but in affecting our economic position with the rest of the world.'' Both senators were speaking to an unusual gathering of American and Japanese politicians, academics, and business officials last week at Pacific University near Portland, Ore. In general, the exchanges were polite.

Undercurrent of frustration

Yet there was an undercurrent of frustration at the fairly substantial gap remaining between the two country's fundamental positions on trade, at the continuing pattern of protectionism on both sides, and at the general failure to address the need for better cultural understanding.

To the discomfort of some Japanese participants, Harvard economist John Meyer traced a pattern of industrial, financial, and trade actions by Japan ``all adding up to an old-fashioned pattern of mercantilism.''

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Kevin Kelly, president of US National Bank of Oregon, described ``a real fear in this country that there is a hidden, long-term [Japanese] plan that we are not part of.''

Yoshinori Ohno, a Liberal Democratic Party member of the Japanese Diet (parliament) objected that Japan's tariff rate is the ``lowest of the industrialized nations.'' But he did not dispute an assertion that Japanese goods sell at home for 120 percent of the overseas price. (He later acknowledged privately that the actual figure has been as high as 160 percent - the basis of US charges of ``dumping.'')

While Americans emphasize the $50 billion-plus US trade deficit with Japan, Japanese officials point to the $30 billion drop in this figure from just two years ago - thanks largely to US exports to Japan jumping 34 percent in 1988 and 18 percent in 1989.

``I also want to point out that Japan's per capita imports from the United States amounted to $364 in 1989, much higher than [the European Community's] corresponding amount of $267,'' said Shinji Fukukawa, senior advior to the Ministry of International Trade and Industry. ``All these numbers indicate a distinct improvement in the external imbalances in the two countries.''

``If Japan continues to increase public investment in the social infrastructure by absorbing the accumulated savings to improve the living standard ... and the United States eliminates its budget deficit by 1993,'' Mr. Fukukawa added, ``the imbalances will be further reduced, and bilateral relations will take on a stable form of interdependence.'' Those are big ``ifs,'' however.

Pacific security issue

Beyond the trade issue are Pacific regional security and the post-war psychological relationship between two economic superpowers controlling 38 percent of the world's total output and 23 percent of its trade.

The Bush administration is talking about reducing US military spending and committment abroad, but that could have a destabilizing effect on Pacific Rim nations which - nearly 50 years after Pearl Harbor - fear a revitalized Japan.

Says Yoshiji Nogami of the Japan Institute of International Affairs: ``Whether people in the US would prefer it or not, the US continues to be the only power that the Asian states will accept to fulfill a role of stabilizer.'' -30-{et

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