Two sides to the trade story. Ambassador to Japan says problem of US trade deficit not just made in Japan
A storm of unprecedented severity in United States-Japanese relations is ``just about upon us,'' US Ambassador to Japan Mike M. Mansfield warns. The immediate and highly visible cause is Japan's huge trade surplus with the US -- $37 billion last year and continuing to surge this year.
Both nations are responsible for the crisis and both must work hard to find a solution, the ambassador said in a recent interview. In speech after speech the broad-shouldered, straight-backed Mr. Mansfield has been telling Japanese audiences that they must open their markets wider to the world, perhaps even abolish all tariffs and quotas on industrial and agricultural imports.
But in an interview with this correspondent, the former Senate majority leader seemed mostly concerned with putting trade tension in perspective for Congress and a wider American audience.
``What Congress is losing sight of,'' he said, ``isn't just the $37 billion deficit we have with Japan. It's the $20 billion deficit with Canada, the $18 billion deficit with Western Europe, the $17 billion deficit with Latin America, the $11 billion deficit with Taiwan.
``What we're facing is not a bilateral problem with Japan but a global problem with much of the rest of the world.
``If the Japanese did everything we want them to do, they'd still have a sizable surplus with us.''
Mansfield noted that in his last days as President Reagan's special trade representative, William E. Brock III (now labor secretary) said the responsibility for two-thirds to three-quarters of the US trade deficit ``was ours.'' He noted that Mr. Brock's successor, Clayton Yeutter, laid the blame ``squarely on the overvalued dollar.''
``These are things which we have to face up to, which no one else is responsible for. These are difficulties of our own making and will be cured by ourselves entirely if they are to be cured.''
High on Mansfield's list of action to be taken is reducing the ``tremendous budget deficit -- about which we've begun to do more talking -- and a little action. . . . But bills reported out of Congress, while moving in the right direction [amounting to about $56 billion], are not enough.''
The budget deficit, Mansfield said, is being financed largely by an inflow of capital from Japan and Western Europe attracted by high interest rates.
``Two months ago the US became a debtor country for the first time in many years, and we'll be in the red by $100 billion or more this year. You begin to see the magnitude of the problem.''
As US ambassador to Japan for the past eight years, Mansfield is thoroughly familiar with the repeated ups and downs of trade relations between Tokyo and Washington. He has a long list of specific actions he would like the Japanese to take, from reduction of nontariff barriers such as complex standards and certification measures to abolition of quotas on beef and citrus fruits.
``The key word is access,'' he said, pressing his fingertips together. ``Access,'' he repeated. And again, ``Access . . . I think [Prime Minister Yasuhiro] Nakasone is making every possible effort he can. But he can't just wave a wand and get it done, he faces difficulties in the Diet [parliament], and in his own party.''
The ambassador remarked how struck he was by the similarities between Congress and the Japanese Diet. Both were bodies responsible to their constituents, and both reflected the pressures coming at them from local as well as perceived national interests. The principal danger he saw -- one that ``deeply concerned him,'' he said, was the possibility of protectionist legislation by Congress featuring a 25 percent surcharge on imports from Japan. Tokyo has announced a series of market-opening measures ranging from tariff cuts on 1,700 items to simplification of import and related procedures. None of these has been sufficient to blunt Congress's sense of frustration over the snowballing trade gap.
``All these people introducing these [protectionist] bills are basically free traders. But they're frustrated and looking for targets to lash out at, and they're not paying attention to the difficulties which confront us at home.''
The 25 percent surcharge, if enacted, would ``increase costs for American consumers and would stifle competition, which is the backbone of the free enterprise capitalistic system which I believe in. It would bring about retaliatory measures, and create a situation which would be dangerous to all of us and beneficial to none.''
If Japan seemed to be the problem today, he says, there were already other countries with Japan-like economic dynamism which would be increasingly perceived as threats tomorrow -- South Korea, Taiwan, Hong Kong, Singapore, and eventually huge China.