Senators push for new tack on trade with Japan
Although it does not have the emotional appeal of putting a sledgehammer to a Toshiba television set, Congress is beginning to consider if it should find a new way of resolving trade disputes with Japan. Majority leader Robert Byrd (D) of West Virginia is considering introducing an amendment next week that would require the Treasury and State Departments to begin a working study on new trade approaches with Japan. The study, which would also involve discussions with the Japanese, would have to be completed by March 1.
``We think there is an advantage to exploring this over the next five to six months when things will be waffling along during the transition period,'' a Byrd aide says.
This past January, Senator Byrd met with Japanese Prime Minister Noboru Takeshita and proposed that both sides begin independent studies on the advantages and disadvantages of a free-trade area (FTA). The Japanese, who are generally in favor of the idea, have completed a preliminary analysis.
The Byrd amendment will follow legislation introduced last month by Sen. Max Baucus (D) of Montana that would require the next president to begin negotiation with Japan over ``a more managed trade approach.''
At the same time, Byrd's office yesterday released copies of a study he had requested from the International Trade Commission on the possibility of a US-Japan free-trade agreement. The study, a compilation of the views of 122 government officials and trade experts, found that the current methods of handling disputes ``engender some degree of bitterness and frustration on both sides of the Pacific.''
The concept of a US-Japan FTA follows the congressional passage of the US-Canada Free Trade Agreement, which President Reagan is expected to sign next week. That agreement, if passed in Canada, will eventually remove most tariffs between the two countries.
But the Japanese already have low tariffs on most imports. Thus Senator Baucus's legislation specifies that the two countries should work closer on reducing trade imbalances, agree on specific levels for the yen-dollar exchange rates, and try to ``impose discipline'' on trade-related practices.
The practices he has in mind include Japanese targeting of industries for future development, the dumping of products below cost, and barriers to import distribution. Included in the legislation is a controversial call ``for burden sharing,'' trying to get the Japanese to pay more for the US military presense in Japan.
If FTA negotiations begin, they are likely to be long. The US-Canada FTA negotiations took two years. With the Japanese, who are excellent negotiators, they will likely take longer.