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National Perspective | RONALD BROWNSTEIN / WASHINGTON
OUTLOOK

Rhetoric From Clinton, Dole Won't Fix Gaping Trade Deficit With Japan

May 06, 1996|RONALD BROWNSTEIN

When President Bush staggered home from a trade mission to Japan in January 1992, candidate Bill Clinton could barely conceal his contempt. "A bust . . . an embarrassment . . . an opportunity lost"--that was Clinton's verdict on the Bush visit, now remembered mostly for the then-president's collapse from illness at a state dinner.

When Clinton returned from his latest trip to Japan last month, he heard his own words reverberating at him. "A spectacular failure, a fiasco . . . a full retreat"--so did presumptive Republican presidential nominee Bob Dole assess Clinton's Japan policy in a speech on the Senate floor last Monday.

Dole's broadside marks the emergence of an unprecedented alignment in modern presidential politics. For the past quarter of a century, Democrats have positioned themselves as tougher on trade than Republicans--Clinton's denunciations of Bush fit squarely in that tradition. Now, Dole is promising to be more hawkish in trade negotiations--particularly with Japan--than Clinton.

"A Dole administration," the Kansas senator bristles, "will quickly declare an end to the Clinton trade policy of surrender and sign on the dotted line."

Dole has struck this theme regularly since last summer, and upcoming events will provide him more opportunities to make his case. In late July, the administration faces a deadline on renewing an agreement that guarantees American manufacturers a fixed share of the Japanese semiconductor market; earlier that month, the administration must also decide whether to take action on a complaint from Eastman Kodak Co., which alleges that Fuji Film Co. and the Japanese government have conspired to suppress its sales there. On both issues Japan is taking a hard line. And Dole, aides say, is prepared to pounce on any sign of weakness from the administration.

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If Dole now echoes candidate Clinton on Japan, President Clinton at times sounds eerily reminiscent of Bush. Like the man he defeated, Clinton is now emphasizing the U.S. security relationship with Japan and accentuating the positive when he talks about trade.

The centerpiece of Clinton's trip last month was the agreement he signed to maintain the presence of nearly 50,000 American troops in Japan and open the door for greater Japanese logistical support to American forces if a military crisis erupts in Asia. Both publicly and privately, trade received much less attention. White House aides said semiconductors, Kodak and other trade frictions came up only "at the very end" of Clinton's private meeting with tough-talking Japanese Prime Minister Ryutaro Hashimoto. In public, Clinton pocketed the thorns and painted a rosy picture of progress in opening the Japanese market.

Clinton can legitimately claim some credit. The administration calculates that exports have increased 85% in products and services covered by the 21 trade agreements it has signed with Japan. Total exports to Japan have jumped by one-third since 1992, more than during Bush's entire term. "In the most politically sensitive areas [of exports], there is a certain momentum that is now visible," said Michael H. Armacost, the U.S. ambassador to Japan under Bush and author of an insightful new book on the relationship, "Friends or Rivals?"

But it's premature for Clinton to declare victory. Many of the agreements the United States has reached, such as last summer's auto deal, weren't as ironclad as he hoped; the jury remains out on their ultimate impact. And despite the increase in American exports, a tide of Japanese imports has pushed the trade deficit even further into the red under Clinton--in 1995, the deficit was about $10 billion larger than when Bush left office.

A mismatch in the business cycles explains at least some of this deterioration: The strong U.S. economy has attracted Japanese imports, while the slowdown in Japan (that is only now lifting) has depressed American exports. But beneath these cyclical considerations lies the obdurate reality that Japan remains an economy tilted in many ways against foreigners. As Walter F. Mondale, the U.S. ambassador, told reporters during Clinton's trip, "Japan continues to be too closed, over-regulated, [and] too resistant to market forces. And I think that will be true for a long time."

Can the United States change this just by banging harder at the door? Clinton has been tougher in trade talks with Japan than Bush. Dole could be tougher yet. But there are reasons to wonder whether Dole could follow through on his threats--or bend Japan to his will if he does.

For one thing, Japanese leaders have become increasingly confident about simply saying no; Hashimoto, who rose to prominence by playing hardball in trade talks, proves that staring down Americans has become a good way to move up in Japanese politics.

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