Arrogance Has No Place In US-Japan Talks

Clinton uses double standard by preaching free trade but demanding import targets

THE Japanese bureaucrat: An arrogant, unyielding fellow pulling the strings behind the politicians, including the prime minister, who make up the facade of Japan, Inc. That seems to be a prevailing perception among Washington officials - a perception that had a lot to do with the failure of the Clinton-Hosokawa summit talks a fortnight ago.

When William Fulbright wrote of the ``Arrogance of Power,'' he was talking about his own countrymen during the Vietnam War. Arrogance doesn't have to accompany power, but it often does, and as Japan's economic might has swelled during the past couple of decades, so has the arrogance of many of the officials and businesspeople who represented that might.

But when, as in the United States-Japan talks, one set of officials is negotiating with another set of officials, nothing is gained by public complaints that the counterparts with whom you are dealing every day are puffed up, accompanied by suggestions that somehow or other they will be forced to deflate at the last moment. To negotiate in this way is to confuse the messenger with the message.

Japan's message in these talks was consistent and clear. Yes, Japan enjoys a huge surplus in its trade with the US - nearly $52 billion last year. Yes, Japan must do something to bring it down. Yes, one way to do it is for Japan to increase its imports of American and other goods. Yes, tax cuts and an economic stimulus package could encourage the Japanese consumer to buy more.

But no, there are no quick fixes. And, no, numerical targets to measure the growth of imports are not the way to go. They are inconsistent with the progressive freeing of world trade that has been the goal of the US, Japan, and other major trading nations since World War II. They are also inconsistent with deregulation - a major goal of the Hosokawa government, and one that is supported by the Clinton administration.

There is near-unanimity in Japan on these points - among bureaucrats, of course, but also among businesspeople, politicians, and the media. What of the messenger?

A British or French official would probably have less difficulty understanding the Japanese bureaucrat than does an American, because the Japanese civil service is modeled on those of Europe in the mid-19th century. Laurence Olson, an astute observer of Japanese politics, commented many years ago that career civil servants at MITI, the powerful Ministry of International Trade and Industry, help to draw up national policies when still in their early thirties. By the time civil servants become division chiefs, usually before reaching age 40, even presidents of large companies will treat them with respect because both parties believe the civil servants to be working for the national interest, while the presidents are pursuing the interests of their own companies.

However, civil servants' careers are relatively short. Once bureau chiefs (the US equivalent is assistant secretary), they must prepare for retirement and look for cushy jobs, perhaps in one of the very companies they used to order around. They may still be looking out for the national interest, but their own future private interests also come into play. That is why, in any ministry, the junior officials up to and including the division chiefs are the guardians of the flame. Their superiors can order them around; but without their willing acquiescence it is almost impossible to get any policy framed or executed.

Of course, there are turf battles within and between ministries; the powerful Ministry of Finance is notorious for fighting with every tool at its disposal, including the powers of budget and of taxation. But the image of the bureaucrat as the embodiment of the national interest remains strong, particularly in dealings with the outside world. That is why, if the Clinton administration was both to talk with and to fight the Japanese bureaucracy, it was imperative for it to obtain allies within the Japanese public.

Had it zeroed in on deregulation - had it maintained that Japan's domestic market was being stifled by all kinds of petty regulations, and that the only way to help the Japanese economy to grow was by progressively removing these restrictions - it would have been applauded by Japan's business leaders, many of whom have said the same. It would also have found support among reformist politicians who form the backbone of the Hosokawa government.

But the White House seems never to have recognized the inconsistency between support for deregulation and the demand for numerical import targets, a demand which, however swathed in layers of obfuscation, ends up being a call for managed trade - for getting those same bureaucrats Washington accuses of arrogance and obstinacy to divide up Japan's domestic market and assign import quotas.

So far, Washington's harsh, undifferentiated criticism of the Japanese bureaucracy has succeeded only in causing Tokyo officialdom to circle its wagons and to raise ever higher the banner of protecting the national interest. This has not been a happy chapter in US-Japan relations, and the sooner Washington gets off its high horse, the better.

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