Prelude to Williamsburg

Trade talks between the United States and Japan this week will be crucial in ironing out some sharp disagreements between the two nations. They will be important, too, because if the differences can be worked out and an agreement reached on expanding two-way commerce, this could be a useful prelude to the seven-nation economic summit meeting in Williamsburg, Va., in late May. One of the priorities at Williamsburg will be to adopt measures to avoid a new round of trade protectionism that could threaten global economic recovery.

The West European nations which will attend the Williamsburg summit tend to agree with the United States that Japan engages in unfair or at least questionable trading practices - both in limiting entry of foreign goods into the domestic Japanese market and in making inroads into overseas markets through such methods as market saturation. Thus a Japanese-American agreement at this time could help defuse any inclination on the part of the US to line up with its European trading partners against Tokyo.

The US-Japan talks, centering on the issue of American citrus and beef exports, have floundered repeatedly since they began last October. The US is urging Japan to end its quotas on these items when current quotas expire in March 1984. Although such a move would not add that much to the US trade position - perhaps only $500 million or so annually - the step would be symbolically important to the Reagan administration, which is trying to keep Congress from passing protectionist-oriented ''domestic content'' legislation. The domestic content bill would require that a large percentage of Japanese car imports be assembled in the US with American-made components.

According to reports out of Tokyo, Japan seems willing to ease the quotas on both citrus and beef - the latter perhaps by as much as 10 percent. Washington, however, appears unwilling to accept a gradual lifting of restrictions.

Still the mere fact that Japan is now talking trade liberalization should be encouraging to the US. What might be kept in mind is that the powerful Japanese farmers' lobby, Zenchu, has strong influence within the coalition of the ruling Liberal Democratic party. Zenchu has hitherto stood firm against any easing of quotas. Since the Liberal Democrats will be facing parliamentary elections in June, the government's willingness to take a political risk and ease quotas is a sign that Tokyo is eager to reach an agreement.

Both the US and Japan have everything to gain by working out a mutually acceptable compromise on trade quotas.

You've read  of  free articles. Subscribe to continue.
QR Code to Prelude to Williamsburg
Read this article in
QR Code to Subscription page
Start your subscription today