BUSINESS/ECONOMY

A U.S. attack on Tokyo

IAN AUSTEN April 15 1985
BUSINESS/ECONOMY

A U.S. attack on Tokyo

IAN AUSTEN April 15 1985

A U.S. attack on Tokyo

It was the kind of rhetoric usually reserved for less friendly partners.“We are going to give them an eye for an eye,” declared Senator Robert Packwood, the Republican head of the Senate’s finance committee. “That is all they understand.” Packwood’s message, aimed at the Japanese, was issued before his committee approved a bill calling for tough trade reprisals against the United States’ second-biggest trading partner. Angered by Tokyo’s refusal to open its markets to more American goods, the finance committee passed a bill which, if approved by the full Congress, would give President Ronald Reagan 90 days to either obtain concessions from Japan or take retaliatory protectionist action.

Concern in Congress about Japan’s increasing trade surplus—which last year provided Tokyo with a $37-billion surplus—has been growing for months. But protectionist sentiment reached a fever pitch on Capitol Hill last week. The current controversy erupted after Reagan announced on March 1 that he would not ask Japan to extend a fouryear-old system of import quotas on Japanese autos when it expired on March 31. Then, Tokyo declared that its car exports to the United States would rise to 2.3 million units in 1985 from 1.85 million units last year.

That decision angered many congressmen. They declared that the increase was too high, especially because of the slow pace of talks with Tokyo aimed at securing greater access for U.S.-made goods. In swift succession both the Senate and the House passed resolutions urging Reagan to erect barriers to Japanese imports. Then the Senate passed the trade bill, creating fears that a trade war was imminent.

The crisis provoked increased diplomatic activity between the two countries. But a resolution of the conflict is not expected before Reagan meets with Japanese Prime Minister Yasuhiro Nakasone at the Bonn economic summit, May 2 to 4. Indeed, some politicians said that the congressional actions are designed to strengthen Reagan’s hand. Outlining that strategy last week, Senate majority leader Robert Dole said that the tough bill passed by the finance committee will not be discussed by the full Senate until after the summit. Still, many congressmen claim that their actions are more than just diplomatic posturing. Added Democratic representative Beryl Anthony of Arkansas: “We are in a war, and this is only the first shot.” in Washington.

IAN AUSTEN