US, Japan Dispute Over Auto Parts Goes Bumper to Bumper
IF attitudes voiced yesterday by US and Japanese officials in Tokyo are any guide, the two countries are indeed heading for one of their most bitter trade confrontations yet.
Negotiators from the two countries met last week to work out measures to make it easier for foreign companies to sell automobiles to the Japanese and auto parts to Japanese carmakers, but the talks ended in failure.
The US and Japan have had a troubled and sometimes-acrimonious trade relationship since the early 1970s, when the United States realized that Japan was selling vastly more products to US consumers than vice versa. Previous negotiations have included difficult junctures, but this time the US is considering the imposition of tariffs worth billions of dollars, and the Japanese are promising to drag the US before the World Trade Organization for arbitration.
President Clinton is expected to announce how the US will react to the breakdown in the negotiations this week. There are reports that the Americans may institute nontariff trade barriers, such as limits on the expansion of Japanese car dealerships in the US, suggesting that Washington may be striking a Japanese approach in its dealings with Tokyo.
Nonetheless, says a US official here who spoke on condition of anonymity, American diplomats are anything but panicked. ''I would say the mood inside the embassy is 'Thank goodness we've finally gotten to the point of saying ... We're getting nowhere and now there is a cost that will be imposed on Japan.' ''
The official's comments indicate frustrations that have resulted from US efforts to open markets here. Japan had a $130 billion trade surplus with the rest of the world last year. Its surplus with the US was $66 billion, of which 60 percent was in the automobile and auto-parts industries.
With rare exceptions, bilateral trade deals have been characterized by vague Japanese promises to deregulate parts of their economy or otherwise make it easier for foreign companies to do business here. The Clinton administration came into office vowing to negotiate more concrete deals that would boost the US economy by expanding exports to Japan. The Japanese vigorously criticized US negotiators for attempting to ''manage'' trade, accusing the US of demanding quotas of improved foreign sales in Japan.