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PASTt.lt GENEftAL'S !tEPeftT, APftIL 11, 1�15
PAGE 7
0N THE W9RLII SCENE
TRADE WAR!--THE END OF A 40-YEAR HONEYMOON On April 9, the Japanese govern
ment, under U.S. Congressional pressure to reduce a $37 billion trade defi
cit with the United States, proposed a program to open the nation's markets
to foreign trade. And in an unprecedented nationwide televised "fireside
chat," Prime Minister Yasuhiro Nakasone pleaded with Japan's shoppers to
buy foreign goods. "I ask all of you to be on the lookout for foreign pro
ducts when you visit the supermarket or department store," Mr. Nakasone
said, backing up his appeal with charts and graphs illustrating the growing
U.S.-Japan trade and payments gap. "This is� life and death affair (that
could lead to)� terrible depression;-r-ii°akasone said in reference to pro
tectionist measures pending in Washington. "We won't be able to sell our
cars, our videos or our machines in the United States if Japan doesn't re
duce its massive American trade surplus," he continued. He bluntly told
his countrymen--using colloquial Japanese rather than the usual formal lan
guage customary to his office--that they must help avoid repeating "the
tragedy of World�
l! · "
At the same time, a 10-man advisory committee in Japan issued a long
awaited report reconunending that Japan open up its markets in stages over
the next three years.
Mr. Nakasone pledged that the government will
prepare the action plan "as soon as possible and seek its implementation
without delay." White House Chief of Staff Donald T. Regan said President
Reagan "was pleasantly surprised" by Nakasone's "unprecedented appeal to
the Japanese people to embark on the path to free trade." Critics, however,
said Nakasone's three-year plan to boost sales of U.S. products was totally
inadequate and would do little to halt growing sentiment for a U.S. trade
war against Japanese goods.
The Reagan Administration, while also stressing the need for results, took
a more conciliatory note. Vice President George Bush said the speech "took
a good deal of courage ••••" Bush warned that calls in Congress for import
tariffs and other retaliation to force increased
u.s.
exports would end up
hurting America. "Whatever walls we dream of building, it's not walls we'd
get if we started to live out a nightmare like that," Bush said. "It's a
cliff, and we'd find ourselves falling straight down into chaos."
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The latest--and by far most serious--trans-Pacific trade dispute started
shortly after President Reagan released the Japanese from another year of
"voluntary limits" on the export of Japanese autos to the U.S. The Japanese
instead kept a limit, but raised it about 25%--roughly 2.3 million vehicles
instead of 1.8 million. In response, a wave of protectionist fervor swept
through Congress demanding that Japan almost instantaneously (in 60-90
days) greatly reduce import barriers on u.s. goods, specifically in the
telecommunications, pharmaceutical and wood products industries. The Con
gressional mood was, frankly, ugly and extremely dangerous, with no small
amount of "Jap-bashing." Emotions threatened to overwhelm caution. Sena
tor Max Baucus of Montana charged: "I would like to leave this body with one
word, 'Bo-eki-sen.'
Just so everyone knows what that means, that is
Japanese for 'trade war.'"
Otherwise normally sound-minded officials seemed to be swept up in the
anti-Japanese rhetoric. "They are sucking the world dry" complained Repub
lican Senator from Missouri, John Danforth, one of the leading exponents of
trade retaliation against the Japanese. "In category after category they