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Japanese Reassure U.S. on Auto Trade 'Target' : Commerce: Miyazawa has not backtracked on the summit accord, they say. Tokyo's surplus rose sharply in 1991.


TOKYO — The Japanese sought to reassure the United States on Tuesday that Prime Minister Kiichi Miyazawa did not backtrack on his Tokyo trade summit agreements with his comment that Japan's pledge to increase car imports and almost double its purchases of U.S. auto parts by 1994 was "a target rather than a firm promise."

Japanese leaders also moved swiftly to try to calm a rising tide of anger in America over reports that a ranking politician here had called American workers lazy and often illiterate.

But even as these damage-control efforts were under way, Japan announced that its 1991 trade surplus with other nations grew by 50%. Japan's total $78.23-billion trade surplus was the third-largest ever, while its surplus with the United States grew by 1.3% over 1990--the first increase in four years.

The Finance Ministry, which released the figures, said that in 1991, Japanese sales to America exceeded U.S. sales in Japan by $38.45 billion.

A ministry official said that Japan's overall import figure increased only slightly in dollar terms because the stronger yen made imports cheaper. He added that, as Japan's economy has slowed, the Japanese have imported fewer expensive paintings and luxury cars.

Still, President Bush has made the trade deficit--which American officials, using slightly different criteria, calculate at roughly $41 billion--a critical and contentious point in the U.S.-Japan relationship. Bush has focused on autos and auto parts, which make up 75% of the U.S.-Japan trade deficit.

During his four-day visit to Japan, ending Jan. 10, the President extracted what many Americans believed to be concrete commitments from the Japanese to double their auto parts purchases from $9 billion in 1990 to $19 billion by 1994. In a separate action, some Americans believed the President had secured firm deals for Japan's big five auto makers to import 20,000 U.S. cars.

But Japanese politicians, auto industry leaders and academic leaders have been quick to support Miyazawa's statement, made in an interview Monday, that the Japanese positions on the increased auto parts purchases and imports were pledges or promises, not necessarily hard and fast commitments.

"We have determined that we will sincerely accomplish each item which we have promised to do," Koichi Kato, the chief government spokesman, insisted Tuesday.

One Ministry of International Trade and Industry official expressed confusion on the flap over Miyazawa's remarks, saying of the Americans: "I wonder why they are so mad? It is all in the (signed trade) agreement, there should be no confusion."

Indeed, the trade document states that Japanese car companies have "voluntarily" made "announcements on U.S. automobile parts purchases goals" to increase Japanese purchases of American auto parts. The agreement clearly states that success in reaching the goal would be "based on the premise that U.S. parts suppliers will make their best efforts" to meet Japanese requirements.

The disagreements may be semantic, suggested Haruo Shimada, a Keio University economics professor who has worked as a consultant to Japanese auto companies and who observed: "Even though (increases in parts purchases) are expressed as a target, it is really something you have to accomplish. Japanese companies feel a strong sense of obligation in cases like this."

Nevertheless, Japanese auto companies also feel that they should not be expected to buy products that do not meet their quality standards or price requirements.

"Some people (in America) suggest we are retracting our statements," said Toyota Motor spokesman Nobuya Etoh. "But from the beginning, it was just a goal."

Etoh added that Toyota feels it has "no choice but to do its best to reach the target." But he emphasized that success in reaching that goal depends heavily on how successful American suppliers are in meeting Toyota's needs.

Some observers suggest that the difference in interpretation of the agreement was the result of a desire on both sides to be deliberately vague. Both Japan and the United States avoided using more concrete language because they were intent on arguing that the agreement did not represent a departure from free trade toward managed trade.

Meantime, even as they sought to deal with the trade dispute, Japanese officials also sought to placate those angered by remarks made by Yoshio Sakurauchi, Speaker of the lower house of Parliament and a member of the ruling Liberal Democratic Party.

He released a statement Tuesday denying reports that he had told his constituents in southwestern Japan that "it is really pathetic that America is becoming a subcontractor to Japan." He also denied having said that 30% of the U.S. work force is illiterate.

"It is regrettable that . . . there were some expressions which were . . . liable to cause misunderstanding and that they were taken as if to disparage or slight American workers," Sakurauchi said.

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