US, Japan fail to mend trade rift. Little progress on barriers to US firms, but some signs of currency cooperation
Washington — President Reagan and Japanese Prime Minister Noboru Takeshita have met, exchanged smiles, and accomplished little else. None of which seems to have surprised American and Japanese officials, who claim they have primarily viewed this week's meeting as an opportunity for the newly seated prime minister to introduce himself to Washington.
Both Mr. Reagan and Mr. Takeshita put on their best faces during parting remarks yesterday. Reagan said Japan was adopting ``satisfactory measures'' to resolve a bitter dispute over the ability of foreign construction companies to participate in Japanese public-works projects. Takeshita expressed his ``hope to mutually satisfy'' on the issue, then moved on to a discourse about the indispensability of stable currency exchange rates.
Private reaction was a different matter. ``We're not getting much,'' one White House official muttered.
Both sides harbored hopes this week of quelling frustration in Congress over Japan's trade policies. On this score, both sides have been disappointed.
Earlier this week, for example, Reagan administration officials said they expected the prime minister's visit to resolve the construction dispute, which has become a major thorn in relations between the two countries. Yet by yesterday morning, the same officials were backpedaling on their earlier predictions.
Japanese officials did not offer to open up their country's multibillion-dollar construction industry to foreign companies, as Congress and the administration had hoped. Instead, they offered to review the matter on a case-by-case basis, an approach that administration officials and lawmakers dismissed as a tepid and inadequate response to their demands.
After both leaders finished their remarks, a senior administration official, speaking on the condition of anonymity, announced that the administration was ``pleased with the new proposal.'' Others were less enthusiastic. ``Congress would die if it saw this proposal,'' said one administration trade official after reading the Japanese offer.
``It's no surprise,'' said Sen. Frank Murkowski (R) of Alaska, co-author of a measure to bar Japanese construction companies from participating in US public-works projects if their own markets remain closed to foreign companies. The Japanese proposal is ``a bid to keep talking, to keep negotiating - which we've been doing for the last two years.''
Even before Japan unveiled its public-works offer, relations had been aggravated anew over another trade dispute. On Monday, a major Japanese agricultural cooperative announced in Tokyo that it planned to cut imports of American grain by up to 1 million tons, because of what it called excessive US demands. A senior US official said the subject did not come up during Takeshita's meeting with Reagan. The move did register in Congress. ``The nerve of them,'' one senior House Democratic aide responded.
The administration did wrest one significant concession from Japan. Takeshita agreed to ``make efforts to'' allow Japanese interest rates to decline over the short term, thus continuing the current Japanese economic expansion.
In addition, the two nations made arrangements to ensure that the US Treasury had an adequate supply of yen to stabilize dollar-yen exchange rates. The Treasury has helped stabilize the falling dollar by selling yen and buying dollars on world currency markets.
Administration officials took pains to say that President and prime minister got along well. That fact is unlikely to mollify members of Mr. Reagan's own party who continue to smart at what they see as Japan's mercantilist policies.
Senator Murkowski calls for the US to take retaliatory action against Japan on the construction issue, saying that the Japanese offer does not satisfy the terms of his measure.
Meanwhile, as Reagan and Takeshita met in the Oval Office yesterday, the office of Sen. Pete Wilson (R) of California sent copies of a press release to news offices around Washington decrying some changes in food labeling the Japanese government is considering.
``Japan's many discriminatory trade policies are already cause for US retaliation,'' the release quoted Senator Wilson as saying.
Mr. Wilson's voice could just be part of a chorus by the time Takeshita leaves Washington at the end of the week. Takeshita projected that the Japanese trade surplus would fall by $10 billion in 1988. On Friday, however, the Commerce Department will release figures for December's trade deficit which some observers believe will break records and provoke new howls in Congress.