EXPERTS SPLIT ON PROSPECTS FOR US-JAPAN TRADE

EXPERTS SPLIT ON PROSPECTS FOR US-JAPAN TRADE

American business executives and trade experts are at odds over how far worldwide trade liberalization talks will go toward easing U.S.-Japan trade tensions.

Those tensions could ease significantly if the multilateral talks succeed, argues the U.S.-Japan Business Council, which represents top U.S. corporations doing business in Japan."We've been underestimating the extent to which the Uruguay Round would be applicable, assuming the U.S. gets its agenda," said Roger Swanson, president of the Washington-based council.

The round, held under the auspices of the General Agreement on Tariffs and Trade, the rule maker for most of the world's trade, is scheduled to end in

December.

In a report issued earlier this spring, the council claimed that 21 of 29 U.S.-Japan issues it reviewed could be "significantly affected" by the GATT talks.

"Even assuming the trade deficit with Japan were not significantly improved as a result of a successful round, U.S. business, wherever it is based, will find a more open market," it stated.

"There is no assurance that U.S. rather than Korean or German products will move through newly opening doors," the study conceded. But provisions directed at Japan could also open up other markets, thus affecting the overall U.S. trade deficit, which totaled $113.2 billion last year. The deficit with Japan alone was $49 billion.

Moreover, "Agreements in the area of dispute settlement could expedite the search for equitable solutions to many trade issues," it added.

However, Sen. Max Baucus, a Montana Democrat who chairs the Senate Trade Subcommittee of the Senate Finance Committee, reflects the prevailing skepticism about the round's ability to affect U.S.-Japan relations.

"While the GATT round holds promise for addressing many of America's international trade concerns, it will do little to address many of our major grievances toward Japan," he said.

The senator acknowledged that the round provides a forum for addressing such issues as Japan's ban on imported rice. However, "The structural

barriers with which U.S. exporters contend - the multilayer distribution system, exclusionary business practices, etc. - are not even on the table in the Uruguay Round," he said.

Author Clyde Prestowitz is even more dubious.

Other than agriculture, the round "doesn't deal with the sources of U.S.-Japan problems," said the former Commerce Department negotiator, who now serves as president of the Economic Strategies Institute in Washington.

Japan's practice of targeting specific industries in which it plans to achieve dominance is another issue not on the GATT agenda, he said.

R.K. Morris, director of international trade for the National Association of Manufacturers, disagreed on this point. Industrial targeting is an issue in the GATT talks on industrial subsidies and countervailing measures, he maintained.

U.S. trade problems with Japan are largely cultural, said Robert J. Morris, Washington representative for the U.S. Council for International Business.

"Our problems stem from the way in which their society functions and their business climate operates. These are areas that can only be peripherally influenced by the ways in which governments interact with each other on trade policy," he said.