Beef and Bitter Lemons

By William E. Smith

To sweeten sour ties, Nakasone pays a call and Shultz girds for Asia

Preoccupied of late with the problems of Europe and the Middle East, the Reagan Administration has taken little time to ponder the state of its relationships in Asia. Now with frictions increasing, the Administration is squarely facing its differences with the two principal powers of the East, Japan and China. Japanese Prime Minister Yasuhiro Nakasone paid a three-day visit to Washington last week, and late this week U.S. Secretary of State George Shultz leaves on a twelve-day trip to China, Japan and South Korea. Shultz's mission: to try to overcome some of the problems caused partly by diplomatic neglect but mostly by basic differences between the national interests of the U.S. and those of the giants of the Pacific.

In the case of Japan, the problems are both economic and military. The U.S., suffering from a deep recession, particularly in industries like automobiles and steel that have been pinched by Japanese imports, wants Japan to take significant steps in opening its borders to more American-made goods. That will help reduce the U.S.'s $17.5 billion unfavorable trade balance with Japan. The Administration also wants Tokyo to raise its defense spending, which currently accounts for less than 1% of the gross national product (vs. 6.3% in the U.S.). In the case of China, the differences concern trade, military and geopolitical matters and, notably, a feeling by Peking that the U.S. has not fulfilled some of its earlier promises to reduce its support for the Chinese Nationalist government on Taiwan.

Prime Minister Nakasone was a particularly welcome visitor to Washington. His willingness to make the trip scarcely eight weeks after he had assumed office was interpreted as a sign that the Japanese are anxious to preserve their 30-year friendship with the U.S. Two weeks ago, in preparation for the Prime Minister's tour, his government reduced nontariff barriers on a number of relatively unimportant U.S. imports. Nakasone also moved decisively to ease tensions over defense policy. He inserted a modest increase in defense spending into his otherwise austere national budget, and he ended a 15-year ban on Japan's sharing its military technology with the U.S.

Those moves set a favorable tone for the Nakasone visit. They also helped the Administration fend off criticism of Japanese policy emanating from Congress as well as from many business and labor leaders. Even as Nakasone was speeding along Pennsylvania Avenue on his way to the White House, President Reagan was receiving a delegation of U.S. industrialists and union officials, who asked him to take a firm stand with the Japanese Prime Minister. "The mood in the U.S. is to get tough with Japan," said Robert Delano, president of the American Farm Federation, whose members are upset about the protracted, and so far unsuccessful, U.S. efforts to reach a new and more favorable agreement on the sale of beef and lemons, oranges and other citrus products to Japan. "We have a discriminatory, unfair and unequal trade relationship," said United Auto Workers President Douglas Fraser. The U.S. auto industry is desperately trying to persuade Japan to renew its agreement to limit car exports to the U.S. to 1.68 million units a year. The current agreement expires in March.

The Reagan Administration was anxious to give Nakasone a chance to live up to his reputation as a personable, resolutely pro-American politician. So the strategy last week was to welcome him warmly while at the same time prodding him gently for further concessions. After three hours of private meetings during a two-day period, Reagan and Nakasone emerged with somewhat similar statements. Reagan noted that Japan's restrictions on U.S. products would "continue to weigh heavily" on relations, and called on the Japanese for "tangible progress."

Nakasone said that he had seen pictures of soup lines and old people sleeping in cars in the U.S., and emphasized his sympathy for the U.S.'s unemployment problem. But he asked Americans not to blame Japan for the lack of technical innovation in certain U.S. industries, and suggested that "more constructive efforts, like encouraging Japanese industries to locate in the U.S.," would be superior to imposing protectionist measures.

One development that cheered the Reagan Administration was Nakasone's readiness to strengthen Japan's defenses. In a sense, some U.S. analysts concluded, Nakasone was making a sort of trade-more on defense but less than the Reagan Administration wanted on increased access to the Japanese market. Indeed, he raised some protests among antimilitarists at home by asserting that he intended to make Japan "an unsinkable aircraft carrier" that would provide air defense against Soviet long-range Backfire bombers. He also said he would improve his country's defenses against Soviet submarines and surface ships. The Prime Minister stressed that these statements did not represent a new defense policy.

Nonetheless, the Soviet Union seized on Nakasone's comments to launch a small-scale propaganda attack of its own. Such moves by the Japanese, said the Soviet news agency TASS, would "make Japan a likely target for a retaliatory strike" and thus could lead it to "a national disaster more serious than the one that befell it 37 years ago," when U.S. planes dropped atom bombs on Hiroshima and Nagasaki.

During the talks President Reagan avoided going into detail on the most contentious issues, such as U.S. beef and citrus exports and Japanese auto imports. Instead, he emphasized the political pressure he faces to gain more trade concessions from Japan. Similarly, Nakasone described the resistance he must contend with in moving faster on trade. He indicated that the negotiations over beef and citrus products would have to wait for a "cooler" period.

Nakasone's subsequent talks on Capitol Hill went better than he had expected. Legislators gave him some blunt talk about U.S.-Japanese relations, but most seemed impressed by his desire to be accommodating. As Democratic Congressman Samuel Stratton of New York put it, "We think he is trying to do more than anybody has done before."

Nakasone's sympathetic attitude will unquestionably help smooth the way for Secretary Shultz's trip to Japan. Shultz is expected to avoid getting specific on trade issues, and instead will emphasize that the U.S. realizes that any changes in Japan's import policies will take time and require difficult adjustments by Japanese society. Some U.S. officials believe that Japan's leadership is getting the message. Says one: "We think they are beginning to appreciate that what is at stake is the future of the open, free international trade system that has benefited them so much."

Shultz has an even tougher task facing him when he reaches Peking a few days later. Because of President Reagan's long-standing sympathy for Taiwan, the Chinese have never really trusted his Administration. In all likelihood Shultz will say as little as possible about Taiwan during his China visit, if only because at the moment the U.S. has nothing more to give. In the Shanghai II communique of last August, Peking affirmed its pursuit of the "peaceful reunification" of Taiwan with China, while the U.S. declared that it would hold its arms sales to Taiwan to existing levels and in time would reduce them. The Administration feels that this agreement should have reassured the Chinese, but the distrust lingers.

The hope in Washington is that the Chinese will be willing to concentrate on economic and cultural issues. The Chinese complain that they have received few if any of the U.S. technological benefits promised them in the late 1970s. U.S. officials disagree and argue that the transfer of technology from the U.S. to China has actually risen steadily in the past several years.

The latest flap between the two countries concerns textiles, which accounted for $800 million of China's $2 billion in exports to the U.S. last year. The Chinese were angered this month when the Reagan Administration failed to grant special concessions permitting them to sell more textiles to the U.S. The Peking government retaliated by banning the importation of U.S. cotton, soybeans and chemical fibers. The Chinese were obviously intent on making a political point, but the gesture was not as serious as it would have been if the ban had affected a big trade item like U.S. wheat, which last year accounted for $1 billion of America's $2.7 billion in exports to China.

Before he leaves Peking, Shultz hopes to gain some insight into the current state of China's relations with the Soviet Union. There have been rumors, for instance, that the two Communist superpowers have discussed a possible settlement of their four-year-old dispute over Kampuchea. The agreement reportedly would involve a withdrawal of Soviet-backed Vietnamese troops from Kampuchea, presumably opening the way to an improvement of ties between China and Viet Nam. Any lessening of tension between Moscow and Peking could lead to a reduction in Peking's need for better relations with the West. But the U.S. believes that China's top boss, Deng Xiaoping, is as committed as ever to the economic development of his country. If that is true, then closer ties with the U.S. will remain in China's best interest.

Only in South Korea, the third stop on his Asian tour, is Shultz likely to find the going easy. In the past year there has been a slight improvement in the Seoul government's human rights record, as shown by its release in December of jailed Opposition Leader Kim Dae Jung. The South Koreans have already been reassured that the U.S. has no present intention of reducing its troop commitment there, a subject of controversy during the Carter Administration. In contrast with Tokyo and Peking, where ticklish work faces the Secretary of State, South Korea will be what one of his aides describes as a "classic goodwill stop." By that time, Shultz will presumably need one. --By William E. Smith. Reported by Johanna McGeary and Edwin M. Reingold/Washington

With reporting by Johanna McGeary, Edwin M. Reingold This file is automatically generated by a robot program, so viewer discretion is required.