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PAGE 12
PASTOR GENERAL'S REPORT, APRIL 11, 1985
The trade dispute is heavily laden in mythology. Is Japan most
responsible for America's widening trade deficit?
No.
Since
1982 the overall trade deficit has roughly tripled to $107 bil
lion in 1984. In the same period the trade deficit with Japan
only doubled. Three-quarters of the increase came elsewhere.
The main reasons have been the rapid economic growth in the
United States, which increases imports, and the high value of the
dollar, which make exports more expensive and imports cheaper••••
But the Japanese use American myths to justify their own. They
routinely argue that their markets are open and that the diffi
culties of Americans and others reflect either uncompetitive pro
ducts or lazy salesmanship. In fact, Japan heavily protects many
uncompetitive industries, like plywood and agriculture••••
Much of Japan's protectionism also reflects tradition•••• Com
mercial relationships are based more on trust and familiarity
than on contracts: "If a new company in the United States wants
to supply components to General Motors, if it can meet price and
quality, it can make a deal," [William Tanaka, a Washington at
torney who represents many Japanese firms] says.
Not so in
Japan; the company "not only has to beat the terms and conditions
of the current supplier" but also has "to develop a relationship
of trust."•••
At bottom, Americans and Japanese view trade differently. Even
when practicing protectionism, most Americans praise open
trade•••• There is little of this from Japan. Even rhetorically,
the Japanese show scant interest in the abstract virtues of im
porting for its own sake. Their interests lie in assuring essen
tial imports--foods, fuel and minerals--and maintaining their own
export markets. So the Japanese preoccupation is in soothing
"trade frictions." They will make concessions--grudgingly and
often of little value--to do this, but not to realize the gains
of larger two-way trade••••
We are fast approaching the limits of our messy way of dealing
with trade conflicts. The younger generation of Japanese lack
their elders' sense of gratitude to Americans for fostering the
country's postwar recovery. In tlie°United States, anti-Japanese
resentment is rising•••• It is an ill wind that blows no good.
Mr. Nakasone's chief adviser on the trade crisis is Saburo Okita, a former
foreign minister. Mr. Okita said rather glumly of the current situation:
"I am seriously concerned that there is too much emotion and impatience in
Congress, without due understanding of the situation. There is the concern
(here) that if we are pressed too much by a foreign government, it may
arouse nationalistic sentiment. This would really damage Japan. At the
same time•••if you have� nationalistic, unfriendly Japan in this part of
Asia, the whole U.S. policy would be upset."
Nothing could bring the U.S. economic recovery to a screeching halt faster
than a retaliatory trade war. It is estimated that one in every five jobs
in u.s. manufacturing is dependent on exports. Fully one-third of U.s.
farm produce is shipped overseas. The notorious Smoot-Hawley Act of 1930,
imposing stiff tariffs on imports, played a major role in turning the chaos