Today's date:
Summer 1995

The Time Has Arrived to Confront Japan

Mickey Kantor is the United States Trade Representative.

WASHINGTON - President Bill Clinton's policy toward trade with Japan has one fundamental and overriding objective: to restore fairness to what has been described as "one of the most lopsided commercial relationships the world has ever seen."

Over the past 25 years, Japan has shipped 40 million cars to the United States, the US has shipped 400,000 cars to Japan - a 100 to 1ratio. In 1994, foreign autos and auto parts had a share of about 33 percent of the US market, but only 2.4 percent and 4.4 percent, respectively, of the Japanese market. At the same time, US automobile and parts manufacturers and suppliers have been able to compete equally with Japan all over the world. Does this sound like "free trade"?

Since taking office, the Clinton Administration has worked hard to create a balanced trade relationship with Japan. Over the past 27 months we have concluded 14 market-opening agreements with Japan, in areas including telecommunications, flat glass, insurance and medical technology - an unprecedented rate of accomplishment. We've worked with the support of both parties in Congress. In fact, every American president since Richard Nixon has worked to crack the Japan market.

Our objective is of critical importance to American workers and business. Autos and auto parts account for 60 percent of our bilateral trade deficit - a gap worth $37 billion last year,

More than 2.5 million Americans work in the auto and auto supply industry; the livelihood of many millions more depends on the success of that industry. These workers and businessmen deserve a fair shot at selling competitive US autos or auto parts either into the Japanese market itself or to Japanese transplants manufacturing in the US.

Let's keep our eye on the ball: The stubborn refusal of Japanese negotiators to open their markets is the crux of the current problem-not abstract concerns about free trade, or US "bullying," or the intricacies of international trade rules.

For the past 20 months, we have been trying to negotiate an agreement based on a solemn commitment by the Japanese government to "significantly expand" sales, access and opportunities to competitive foreign autos and auto parts in their markets.

Our goals are simple: Getting Japan to play by the same rules. Specifically, we seek to open up Japanese dealerships to US and foreign cars; to deregulate the discriminatory Japanese auto parts markets; to resume voluntary purchasing plans, previously undertaken with some success by Japanese auto manufacturing companies.

Our proposals do not constitute "managed trade:' or "numerical targets." To reach a fair settlement, the government of Japan need only commit to serious efforts to deregulate their auto market and to combat anti-competitive practices. Japanese auto manufacturers, who have benefited so enormously from the openness of the US market, need only take responsibility for ensuring that US autos and auto parts are allowed to compete on fair terms in both the Japanese market and in the purchases of their American transplants.

Thus far, they have been unwilling to do so. Consequently, this administration undertook actions in May to respond to Japan's continued discrimination. Our goal remains a fair, negotiated settlement. But after 20 months of negotiation and decades of being closed out of the Japanese market, American patience has worn thin. The time has come to deal decisively with this issue. Enough is enough.

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