Promises, Promises

By Janice Castro

For the second time in four months, Prime Minister Yasuhiro Nakasone appeared on Japanese national television last week to address his country's most pressing issue: a $44 billion trade surplus that is stirring increasing resentment around the globe. Announcing a package of measures designed to lower trade barriers, Nakasone pledged to make Japan the freest market in the world. Said he: "I personally will hold myself responsible that enough will be done to satisfy international complaints that Japan is unfair in the trade area. We have taken very bold steps. We have done our best."

The program calls for tariffs to be reduced or eliminated on 1,853 products, including telecommunications equipment, auto parts and plywood. In addition the government will make a fresh start at dismantling the maze of regulations that hamper efforts by foreign companies to sell in Japan. Imported cars, for example, will no longer have to be inspected at the Ministry of Transport, though they will still be looked over by dealers. Companies that sell foreign-made nail polish will not have to get government approval for each new color. Importers of pharmaceuticals will not need a license from the Health and Welfare Ministry for each shipment.

On the day after Nakasone's speech, Japan announced another step that may set a precedent for its dealings with foreign companies. The government agreed to give IBM access to Japanese patents covering several computer-related inventions. That may help the American company to market more of its advanced computers in Japan.

As sweeping as Nakasone's program sounds, it may not be enough to satisfy Japan's trading partners. They are concerned that the new measures will be phased in slowly over a three-year period and that many import restrictions were untouched. Quotas will remain on imports of 22 agricultural items. Examples: beef and citrus fruits and juices.

Japan's moves did not impress Washington. Said White House Spokesman Larry Speakes: "It is difficult to determine from the announcement whether the program will remove the bulk of the barriers in a timely fashion." Congress was even more skeptical. "Japan has announced five previous market-opening initiatives in the past four years," said Republican Senator John Heinz of Pennsylvania. "None of them has worked. That's the reason for this sixth initiative. I doubt this will do much good either."

The U.S. has good reason to be impatient. The Commerce Department reported last week that the American trade deficit in June was $13.4 billion, the second highest monthly total in history. More than a third of that shortfall resulted from a $4.6 billion deficit with Japan, which matched a record set in July 1984. Most alarming was a 42% rise in Japanese auto shipments to the U.S. between May and June. That jump followed a controversial decision last March by Japan to ease its voluntary quotas on car exports.

Since April Nakasone has been urging his countrymen to buy more foreign products. He hopes the new initiatives to make more of those goods available will reduce his country's burgeoning surplus with the U.S. But if the program fails to show quick results, Japan may face retaliation. Congress has before it a stack of protectionist bills, including a measure to add a 20% across-the-board tariff to imports. --By Janice Castro. Reported by Gisela Bolte/Washington and Edwin M. Reingold/Tokyo

With reporting by Reported by Gisela Bolte/Washington, Edwin M. Reingold/Tokyo