Hosokawa and Clinton Meet After Key Victories

POLITICAL crusade by Prime Minister Morihiro Hosokawa to revamp the basic rules of democracy in Japan passed its key test yesterday in a legislative victory that he hopes will impress President Clinton during a bilateral summit today.

Mr. Clinton had advocated political change in Japan during a visit to Tokyo last July - just before Mr. Hosokawa took office - as a way to improve relations between the world's two largest economies.

Whether Hosokawa's political reform bills, which were passed by the lower house in a 270-226 vote, will truly overhaul Japan's corrupt and inflexible system is still in doubt.

``This plan was devised by politicians for politicians and it'll lead to more corruption,'' says commentator Minoru Morita.

Nonetheless, the reforms would put an end to a multiseat electoral system that helped to keep the conservative Liberal Democratic Party (LDP) in power for 38 years, until a cascade of scandals brought it down in July.

Hosokawa, an LDP defector who heads the New Japan Party (JNP), leads a disparate, seven-party coalition whose sole cohesion is to prevent an LDP revival. One reform bill undercuts the LDP's ability to raise money by banning corporate ``donations'' to individual politicians and offers 30.9 billion yen ($289 million) in state subsidies for campaigning.

The reform measures must still pass the weaker upper house, which appears likely soon. The highly popular Hosokawa hints he will resign or call an election if the bills are not law by year's end.

The reforms aim to bring a true multiparty system to Japan, in which elections focus on issues and policies instead of how much a politician spends on voters. The measures set up 274 single-seat districts and another 226 seats to be elected nationwide through proportional representation for the lower house. Voters will cast two ballots.

Yesterday's vote in parliament was a rare example of a direct political confrontation in Japan. Although Hosokawa had wanted to reach a consensus with the LDP on political reform, he had to resort to his majority coalition simply outvoting the LDP. The LDP had used delay tactics in hopes that the wobbly coalition might collapse.

Both sides had a few defectors in the vote. Five socialists in the coalition voted against the reforms on grounds their party would be further weakened by reform. And 13 LDP members defied their party and six others abstained in what may be a sign of an LDP split like that which produced the JNP earlier this year.

A major realignment of parties is expected before the next election as politicians and voters try to figure out how the new system will best benefit them.

The new electoral formulas would ``better reflect public opinion,'' a Yomiuri newspaper editorial claims. Many analysts say the reforms will bring about a two-party system that will allow more frequent, healthy transfers of power.

The United States, like much of Japanese opinion, had seen the LDP as too pro-business and thus unwilling to make concessions on key trade disputes. Many of the corruption scandals revealed over the past five years, especially payoffs by the construction industry, have reinforced that view.

Hosokawa used the timing of the summit with Clinton to push along many of his reforms, including a major plan for government deregulation. He is expected to tell Clinton that Japan is ready to stimulate its economy with a giant income tax cut and, according to Japanese press reports, cut a deal in talks on the General Agreement on Tariffs and Trade to end a ban on rice imports.

The reports claim that the US and Japan have agreed to a six-year transition period before Japan ends the ban and allows foreign rice to meet 4-8 percent of domestic demand.

In ironic timing, the first shipload of foreign rice arrived in Japan yesterday, an emergency import to make up for domestic shortages caused by bad weather. The shipment came from Thailand. Later shipments are due from the US.

Clinton views Japan ``in a fairly [cold] manner,'' says Kunihiko Saito, vice foreign minister, and if Tokyo is not careful in how it responds to his requests on trade issues, relations could become ``extremely bad.'' US expectations for the Hosokawa administration are extraordinarily high, and the ``disappointment would be equally big if the coalition government cannot deliver somehow what the US has expected.''

Just before the Seattle summit, US Secretary of State Warren Christopher warned that ``the economic pillar [of the US-Japan relationship] is urgently in need of repair.'' The US wants to conclude the so-called ``framework'' talks on market access for US goods and services into Japan by early 1994.

``Unfortunately, the reality is that there is an extremely wide gap between our positions,'' says Yoshihiro Sakamoto, head of the International Trade Policy Bureau in Japan's Ministry of International Trade and Industry (MITI). ``The question is to what degree we can achieve a compromise.'' He said Japan cannot accept the US request for measurable results in foreign penetration of Japanese markets.