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Rules Sought for `Trade War'

Book spurs bid for law regulating foreign-trade lobbyists in US

FEW books prompt the introduction of legislation in Congress. But that is one result of political economist Pat Choate's new book, ``Agents of Influence: How Japan's Lobbyists in the United States Manipulate America's Political and Economic System'' (Alfred A. Knopf, New York, $22.95). The book has stirred up new concern about United States ``economic security'' in the news media and in Congress. It comes amid signs of growing dislike of Japan among Americans. In a survey taken by the Times Mirror Center for People and the Press last month, 56 percent of the respondents said they had a favorable opinion of Japan, down from 70 percent in 1987. Americans with an unfavorable opinion of Japan rose from 27 percent in 1987 to 39 percent.

Into this mix comes Mr. Choate's book. He charges in his polemical, often-repititious book that ``Japan is running an ongoing political campaign in America as if it were a third major political party. It is spending at least $100 million each year to hire hundreds of Washington, D.C., lobbyists, super-lawyers, former high-ranking public officials, public relations specialists, political advisers - even former presidents. It is spending another $300 million each year to shape American public opinion through its nationwide local political network.''

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Japan's campaign in America, he writes, is better financed, more extensive, and more effective than either US political party or any domestic industry, union, or special-interest group. By influencing the outcome of political decisions, Japan aims at benefiting its corporate and economic interests, with billions on the line.

View held `outlandish'

Wall Street economist Sam Nakagama holds Choate's view of Japan's lobbying success ``is so outlandish that hardly any sane person would believe it.''

But Choate's book has resonated with at least one Washington lawmaker - Sen. Ernest Hollings (D) of South Carolina. He held hearings last month on his ``Foreign Representation Act of 1990.'' The measure aims to tightening the Foreign Agent Registration Act of 1938 and the 1989 Ethics in Government Act. Although the legislation died with Congress's adjournment last weekend, the senator's aides say that he plans to reintroduce it next year.

The head of the Foreign Agent Registration Act (FARA) office in the Justice Department estimated in 1986 that as many as 60 percent of foreign agents have not registered under FARA. To encourage registration and the accompanying reports, the Hollings proposal aims to avoid the stigma attached to the words ``foreign agent'' and ``propaganda'' in the existing law by changing them to ``foreign representative'' and ``promotional material.''

Other provisions of the Hollings proposal include:

Shifting offenses from criminal to civil status, with fines ranging from $2,000 to $5,000. Hollings hopes thereby to encourage Justice Department action against violators.

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Extending the definition of foreign lobbyist under FARA to include not only US representatives of a foreign government but those of a US company that is more than 50 percent owned by foreigners.

Slowing the revolving door between government positions and high-paid jobs as foreign lobbyists. At present, an official must wait a year before representing a foreign government. Hollings's bill makes that a five-year ban on the president, the vice president, Cabinet members, and other high-level appointees - about 30 people altogether.

Other senior executive-branch officials and members of Congress would have to wait two years before representing foreigners for pay (about 1,500 officials). The one-year ban holds for lower-ranking officials. Further, the Hollings bill covers foreign-controlled companies as well as foreign governments.

Lawyer notes distortion

Choate, in his book, urges much tougher registration and revolving-door provisions than the Hollings bill does.

Lawyers involved in some of the trade issues cited by Choate say his book contains, as one put it, ``an awful lot of distortion.''

Choate almost always assumes that a Japanese position on a trade or economic issue is damaging to American interests, whereas, in fact, a lobbyist for Japan may have a good case in some instances.

Nonetheless, even a Washington trade consultant mentioned in the book, Harald Malmgren, agrees with Choate that the revolving door can create conflicts of interest.

``There has been unseemliness and unethical behavior,'' he says, and this problem requires remedial action. But that action should not overly discourage experts in trade, economics, monetary affairs, and finance from joining the federal government, he adds.

``We have had amateurs in the trade field. In negotiations they get eaten alive if they don't have expertise around them.''

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