Tempers Rising over Trade

Washington insists that Japan open up its market to foreigners

Last year the battle was over automobiles and trucks. Now Japan and the other major industrial countries are heading for an even more serious collision. At issue this time is whether or not Japan's byzantine web of nontariff import barriers is really just disguised protectionism, and, if so, what should be done about it.

Two weeks ago high-level trade officials from the U.S., Canada, the European Community and Japan held two days of meetings in Key Biscayne, Fla. One of the messages of the session was a warning to Japan's Minister of Trade and Industry, Shintaro Abe, that his country must open its market to more imports. Abe replied that Japan would take "drastic" action before the end of the month to make it easier for the U.S. and other countries to sell their products in Japan.

Last week Abe jetted to Washington, where he heard the same story from President Reagan, Secretary of State Alexander Haig, U.S. Trade Representative William Brock and other top Administration officials. According to American estimates, the value of Japanese exports to the U.S. grew last year by 23%, to $37.7 billion, in part because of the strength of the U.S. dollar, which encouraged imports and discouraged exports. Indeed, American exports to Japan increased by only about 4%, to $21.5 billion.

Since taking office a year ago, the Administration has struggled to convince Japan that it must open up its domestic market to more foreign imports if it wants to head off tit-for-tat protectionism in the U.S. Progress has come slowly. With the U.S. economy now in a deepening recession that is sending unemployment leaping, calls for retaliation are rising just as the Administration had warned. Says Deputy U.S. Trade Representative David MacDonald: "I see a crisis in late spring or summer. The problem is the closed Japanese market itself. We are not talking about the Japanese restraining exports, we are talking about them opening up their own domestic market."

The complaints against Japan are also coming from the industrial nations of Western Europe, which have found their own trade with Japan tilting increasingly in Tokyo's favor. Says a top Common Market official in Brussels: "Of course the Japanese sense that something has to be done. But getting them to open up their markets is like starting a car with a flat battery on a cold winter's day. It grinds for a while, and then it just stops."

What angers U.S. and European officials is not the marketing prowess of Japanese exporters, but the complex regulations that hamper foreign businessmen in Japan. Examples abound. An American maker of aluminum baseball bats was developing a good market for his product until the Japanese softball association ruled that his bats could not be used in tournament play. Reason: the label stamped on them supposedly made them defective. Companies selling products in aerosol spray cans complain that their cans must be 25% thicker in Japan than anywhere else in the world. Moreover, the outfit that inspects the incoming aerosol products is a prime Japanese spray-can maker.