President Bush began trade talks with Japanese officials Wednesday only hours after the government of Prime Minister Kiichi Miyazawa unveiled what it billed as an initial package of market-opening gifts for the United States.
The Ministry of International Trade and Industry announced a series of proposals, including the creation of foreign access zones to cut red tape for businesses entering Japan, special tax breaks for acquiring land and starting up local businesses, and a beefed-up budget for promoting imports.
Ministry Vice Minister Noboru Hatakeyama also repeated pledges made last year by 88 major Japanese corporations that they would increase their purchases of foreign-made parts and components by 50 percent, to $26.4 billion, by 1994.
The vice minister stressed, however, that there would be no sanctions against Japanese companies if they fail to reach targets in what he called ”a moral campaign.”
Major initiatives on importing U.S.-built cars and auto parts will be announced Wednesday, government officials said.
In the last two weeks, a number of trial balloons have been floated, including lowering inspection barriers on foreign-made cars, opening the dealer networks of Japanese car manufacturing firms to America`s Big Three automakers and tax breaks for purchases of imported vehicles.
Nissan Motor Co. has said it would be willing to cooperate in selling Ford mini-vans and other cars and will increase purchases of U.S.-made auto parts. It said if Ford modifies vehicles for the Japanese market and sets a competitive price, annual sales could reach 3,000 units.
On Wednesday, Nissan Motor Co. announced plans to sell up to 3,000 Ford mini-vans and other autos a year in Japan and to increase purchases of U.S.-made auto parts. Other major Japanese automakers are expected to open their domestic dealerships to U.S. automakers.
Toyota Motor Co. announced it is setting a target of selling 5,000 General Motors cars a year at its Japanese dealerships and further boost purchases of U.S.-made auto parts. Hiroshi Hashimoto, a company official, said Toyota also may establish a parts-procurement center in the U.S.
Following Wednesday`s talks, U.S. national security adviser Brent Scowcroft said Bush told Miyazawa in their extensive, private meeting that Japan has a lot more to lose if the world`s open-trading system collapses.
”There are few, if any, other industrialized nations who depend so heavily on exports,” said Scowcroft. If that system was altered, the Japanese economy would have to change rapidly.
The two leaders discussed specific areas of trade in autos, auto parts, computers, financial services, glass and paper. Miyazawa said Japan was sensitive to current U.S. economic problems.
Though Scowcroft would not say what, if any, concessions the Japanese are willing to make, he said there was no reason for dismay after this first day of talks.
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”We`ve got to iron out these differences between us so we can go forward without tensions mounting and dividing up the world into trading blocs,” Bush said earlier in the day as he and Miyazawa dropped in on a meeting of the American business executives and their Japanese counterparts in a hall of Akasaka Palace.
”This is really a new world,” Japan`s prime minister told the businessmen.
Bush appeared enthusiastic: ”We`ve got to be specific, we`ve got to get as much as we can, get tables, times . . . I really believe we can move this process foward. It is in our interest, it is in your interest . . .”
Miyazawa told the audience that ”President Bush and I are working hard to advance our bilateral relations, including the economic relationship, not only for the sake of our two countries, but also for the rest of the world.” At the start of the first of four days of trade talks, it was a measure of the new world order that Bush-political leader of the only surviving superpower-now views his job to include cutting ribbons to open a new Toys
”R” Us outlet.
Bush`s symbolic stop at one of America`s more successful business exports, in a shopping area near Kyoto, showed how the currents of history are moving in surprising directions after the collapse of the USSR and the end of the Cold War.
Bush combined the sweeping grandeur of a state visit and talk of a
”global partnership” with Japan with the bottom-line realities of America`s $41 billion trade deficit with one of its main trading partners.
”There is much that we can do for the world based on a forward-looking global partnership between two great nations, two powerful economies and two resourceful innovative peoples,” Bush said before meeting with Miyazawa.
The mixed symbols were evident as well Tuesday when the president descended the steps of Air Force One trailing a line of American chief executives, including the heads of the Big Three auto companies, on his unprecedented trade mission.
Pressing Japan for more market access-not just piecemeal trade agreements-Bush is parlaying Japanese concerns about America`s continued presence in the region against the long-term need to promote more U.S. exports and boost the domestic economy.
Bush insists he does not want a handout, but only free and fair trade with the Japanese, allowing more U.S. financial services, agriculture and auto parts to compete in the Japanese markets.
But the U.S. auto executives said they want Bush to carry a big stick in dealing with Japan. They recommended the president give Tokyo five years to import more American goods and erase their trade surplus or face retaliation. ”It`s high time our government face up to their government . . . and say, `We can`t continue this way,` ” said Chrylser Chairman Lee Iacocca, who has become the most ardent spokesman for protective measures.
A senior administration official Wednesday rejected the automakers` view as protectionist, but he said the U.S. wants much more change in the way Japan systematically excludes foreign products.
”This isn`t going to end here,” the official said.
Cars and auto parts make up about 75 percent of the trade deficit with Japan, and in response to Bush`s visit, Japanese officials already have signaled a new drive to buy more American goods.
Next year Japan will increase its imports of American products by $10.2 billion, said a senior official of Japan`s Trade Ministry.
The increase won`t change the structural trade problems, but Japanese officials are concerned about their overall relationship with the U.S. and they fear a new wave of protectionism if Bush is not re-elected.
Even before beginning his talks with Miyazawa, Bush was fashioning a ”we won” message for voters back home. White House officials said the president will travel to at least five states next week, including New Hampshire, site of the first presidential primary. During his travels, Bush is expected to make the most of Japan`s trade promises.
In his meetings with officials in Japan, talks that form the centerpiece of his 12-day Pacific journey, Bush is delivering a message that links the continued U.S. military presence in the region with the need to have more open markets for U.S. goods.
”Having a security presence gives us a reason for being here and the only way these countries can reciprocate is on the economic side,” said an administration official traveling with the president.
In these talks, the administration also is asking other nations in the region to contribute a greater share of the cost of the military umbrella that has made the U.S. a Pacific power since World War II.
”No one was saying we`re bringing back 2 million jobs after two weeks, but in two years we might have something,” said the official. ”These countries are not stupid. They know they have to give something to have a relationship.”