Business: Slowing the Juggernaut

The U.S. begins to reduce the chronic trade deficit with Japan

As the sleek white vessel nosed into Tokyo harbor last week, the Japanese markings were clearly visible on the superstructure. The crew of the 13,000-ton vessel was Japanese too, from the ship's captain to the deckhands. But emblazoned on the hull in red, white and blue letters was a most un-Japanese name: Boutique America. Below deck the contrast was even greater. The cargo area was an entire department store of U.S. consumer goods, ranging from golf clubs and fishing gear to pots and pans, jewelry, evening dresses and even slabs of sirloin steak. Displayed at specially constructed counters were some 8,000 items of U.S. goods from 145 companies. For the next two months, Boatique America will be a floating U.S. trade fair as it visits 13 different Japanese ports, selling a cornucopia of wares at prices that are bargain-basement by Japanese standards. The goal is not so much to make a quick killing as to introduce American goods to the Japanese people.

For U.S. businessmen and officials accustomed to a flood of manufactured goods coming out of Japan, the Japanese trade tour, organized by the Department of Commerce, is aptly timed. Last week on both sides of the Pacific, there were signs that the chill in Washington-Tokyo relations caused by the U.S.'s chronic and massive trade deficit with Japan was beginning to dissipate. Said Mike Mansfield, U.S. Ambassador to Japan: "It's been a good summer. I haven't heard the word protectionism for months." By contrast, he said, the previous two years had been "among the most difficult in the U.S.-Japanese relationship since the end of World War II." In Washington, even Congress's Joint Economic Committee stopped growling. Texas Senator Lloyd Bentsen, committee chairman, conceded that Japan, under U.S. pressure, had "begun to peel away" the cocoon of import regulations it had spun to protect its domestic industry from foreign competition.

Although the U.S. still has far to go to reach parity with Japan, the new mood was based on encouraging statistics. Says Mansfield: "In the first half of 1979, our exports to Japan were up 46% compared with a year ago. Our imports from Japan were up too, but only by 8.8%." Last year the U.S. ran an $11.6 billion deficit in its trade with Japan; in 1979 the figure is expected to drop to about $9 billion, a 25% decrease.