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U.S., Japan Will Try Again on Trade Talks : Commerce: The agreement to return to the negotiating table overcomes key hurdle of numerical targets.

May 25, 1994|JAMES GERSTENZANG and DAVID HOLLEY | TIMES STAFF WRITERS

WASHINGTON — Three months after U.S.-Japanese ties sank to their lowest point in the Clinton Administration, negotiators agreed Tuesday to resume trade talks, with U.S. officials painting a suddenly sunny picture of one of the country's most important, but troubled, relationships.

"No one can guarantee that these agreements are going to work," U.S. Trade Representative Mickey Kantor said, but he added, "I can tell you we have momentum and dedication and purpose and involvement at the highest level of the Japanese and U.S. governments."

U.S. and Japanese officials said the accord, hammered out in five days of meetings, gets the two sides over a key hurdle involving how to determine whether the terms of any trade agreement are being met if numerical targets, to which the Japanese object, are not included.

Stripped of the diplomatic veneer in which it was cloaked, the breakthrough is little more than an agreement to return to the negotiating table. And it leaves the two trading giants not much closer to a substantive agreement than they were last July, when they first established a "framework" for their talks.

The agreement, Japanese Foreign Minister Koji Kakizawa said in Tokyo, brings the two sides to the "starting line, not the goal."

In a telephone conversation Tuesday between President Clinton and Japanese Prime Minister Tsutomu Hata, both "agreed that we can move forward now quickly," Kantor said.

Hata said later that he is confident Tuesday's agreement will lead to a trade accord. "I am absolutely confident we will find a way," he said. "Japan is determined to open its markets, and the U.S. is just as determined to sell here."

The negotiations are intended to increase foreign sales in Japan in four key economic sectors: government procurement of medical and telecommunications equipment, insurance, automobiles and auto parts. Kantor expressed hope that the talks can be broadened to include financial services, glass products and intellectual property rights, which covers an array of creative endeavors ranging from musical composition to pharmaceutical research.

In the long run, U.S. officials hope Japan will relax its barriers to foreign products and bring down its trade surplus, which last year reached $131 billion in goods and services. Its trade surplus with the United States alone was $59 billion, and is expected to climb this year.

The United States offered a firm commitment to avoid specific numerical targets for foreign sales in Japan. Instead, the two sides agreed to place their focus on "results-oriented goals," which would include both "quantitative and qualitative criteria."

A quantitative measurement, Kantor said, could include "the prompt, substantial and continuous increase in sales" by foreign insurance companies in Japan, for example, or in the number of U.S. car dealerships there.

A qualitative measure, he said, could be the degree of cooperation between U.S. auto parts suppliers and Japanese car makers in research and development projects.

At the same time, the United States retained the option to use trade laws, including the imposition of tariffs and quotas on Japanese products sold in this country, if sufficient progress is not made in the resumed talks.

What remains uncertain is whether either government is strong enough to withstand pressure not to yield when compromise is required in the negotiations.

Clinton faces a tough battle to gain congressional approval of a new world trade agreement, and he has only limited leeway in the concessions he can make toward Japan. Similarly, Hata is struggling against a powerful Japanese trade bureaucracy.

On the other hand, there is pressure on Hata to smooth the rough edges in Japan's relations with the United States because, political analysts believe, the turmoil contributed to his predecessor's fall from office this spring.

Still, U.S. officials said there are no deadlines for achieving their goals. "It would be unfortunate, unnecessary and unreasonable to put any particular date on these agreements," Kantor said.

A Japanese official in Washington said his government hopes sufficient progress can be made to enable Hata to visit with Clinton in Washington before the two attend an international economic summit conference in July in Naples.

That might be overly optimistic.

"There is a lot of hard bargaining left to do," a senior Administration official said.

*

Gerstenzang reported from Washington and Holley from Tokyo. Staff writer Jim Mann in Washington contributed.

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