Talking Trade as Adults
IN many ways, the standoff between the United States and Japan over their trade dispute can be a cause for celebration. Both countries, as Prime Minister Morihiro Hosokawa noted, have learned how to treat each other as adults.Skip to next paragraph
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In saying ``no'' to US trade requests at last week's summit, Japan has finally shed its often vague way of negotiating. Now the world knows where this economic giant stands. Japan will not set specific criteria for opening those markets considered closed by the US and will play tit for tat on any economic sanctions.
The US, too, stood up to Japan as an equal partner, not a country that needs special consideration. After World War II, the US granted special favors to Japan for economic recovery. To keep the Japanese in the anticommunist camp during the cold war, the US never pushed hard on trade or common rules of competition. Now the US clearly wants trade reciprocity from Japan.
In the name of expanding free trade, President Clinton is asking Japan's leaders to make up for past and present discrimination by arm-twisting industries and consumers into accepting foreign goods and services. He wants American goods to be able to command the same competitiveness in Japan that they do in world markets. The president's impatience with Japan may come partly from a concern that Americans could soon begin to ask why they must defend Japan with US troops even as the trade imbalance grows.
The Japanese try to paint Clinton as opposing free trade by asking for government intervention in markets. But Japanese bureaucrats still use a heavy hand in controlling domestic markets and guiding new export industries.
If Clinton can finally crack open a deep, xenophobic culture in Japan by demanding temporary market-meddling, he will have done much for global free trade. The two nations already command nearly 40 percent of the world's economy. They could command much more.
Japan and the US, and perhaps the world, may have to endure a short period of limited protectionism for the sake of the larger good of expanded free trade. In the end, though, more jobs and lower prices will come to both Japanese and Americans.
This trade standoff is not just about Japan. Most Asian nations, long dependent on a big US market without being forced to fully open theirs, could soon face the same stern message from Clinton.
We can thank both Clinton and Mr. Hosokawa for finally laying down a clear line over differences between the US and Japan. That, after all, is what adults should do. An honest assessment does not guarantee ultimate success in a trade accord, but without candor, an accord is impossible.