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Chance of Trade War With Japan Overblown, Says Trade Official

THE prospect of a trade war between the United States and Japan is ``vastly overstated,'' says US Trade Representative (USTR) Mickey Kantor, who last week announced the threat of possible trade sanctions against Tokyo for blocking the flow of foreign goods and investments into its markets.

``We're trying to `unmanage' Japanese trade - to open it up and make sure foreign goods are treated fairly,'' Mr. Kantor told reporters at a Monitor breakfast yesterday.

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The USTR monitors the dollar amount of United States exports to specific Japanese markets ``as a measure of success, not to establish market share.'' Protected by trade barriers to non-Japanese production and government subsidies for domestic production, ``Their markets are sanctuaries for Japanese goods,'' he says.

``This has not been good for the Japanese people, it has not been good for the US, and it has not been good for world trade,'' he adds. Japan has the highest cost of living in the developed world, and its workers are among the highest paid. But the lack of competition has made goods costly for citizens, he says.

On China, Kantor says Beijing ``still has plenty of time'' - until the end of this month - to address US concerns about its human rights record and qualify for an extension of ``most favored nation'' trading status. With 1.2 billion consumers in the world's fastest-growing economy, China's industrial development needs are tremendous.

In the next decade, Kantor estimates, China will spend $500 billion to $1 trillion on infrastructure. From providing bulldozers to cellular telephones, he says, ``We have an enormous opportunity in China.''

President Clinton is very active in creating an ambitious trade agenda, Kantor says, and the unfolding Whitewater scandal has not diverted the president's attention. ``Anyone who followed the 1992 campaign knows'' Mr. Clinton does not lose focus due to ``extraneous political attacks.''

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