Bush Faces Pressure to Take Trade Action Against Tokyo

SHORT on progress to redress the severe US-Japan trade imbalance, the Bush administration is under increased pressure from Congress to take a harder line toward Tokyo. ``We are frustrated,'' says Sen. Frank Murkowski (R) of Alaska, a member of the Senate Subcommittee on East Asian and Pacific Affairs whose state relies on Asian export markets. Japan's continued bid-rigging, price fixing, and other anti-competitive practices, he says, are unacceptable. ``We've got to have antitrust laws and antimonopoly laws at work, and we've got to say to the Japanese, `You're either responsive to our difficulties or we're going to take action.'''

It is precisely that action - in the form of higher tariffs or restricted access for Japanese imports - that administration officials were trying to avoid by meeting with their Japanese counterparts in Washington last week.

In their second meeting in two months, negotiators from the United States trade representative's office, and state and Treasury departments were anxious to hear from the Japanese delegation that Tokyo is ready to address US concerns. But the Structural Impediments Initiative (SII), a discussion designed to deal with barriers to US product penetration, accomplished little to bridge the $50 billion-plus US-Japan trade gap, according to the Bush administration.

As a result, congressional interest in activating provisions of the Omnibus Trade and Competitiveness Act of 1988 has been rekindled to gain entry into Japan's market. An example of this is the US trade representative's current investigation into Japan's construction market. ``The Japanese come here and do a couple billion dollars in construction contracts in a completely open market while US firms can't even qualify as bidders in Japan,'' says Senator Murkowski.

The combined public and private value of that market in Japan is $275 billion a year. The US portion is not commensurate with US interest, and Trade Representative Carla Hills has issued numerous complaints to the Japanese, ranging from bid-rigging to unclear product specifications.

A Japanese Embassy spokesman notes that ``significant improvements'' in Japan's practices have already occurred and points to the $100 million in public-works contracts US firms have won since May 1988, when bidding was opened up. ``Ten American companies have obtained permission to enter the Japanese construction market in Japan,'' he says.

Murkowski balks at talk of such improvements: ``We're talking about them identifying a small number of US construction contracts, and our entire market is open. On Nov. 21 we will not get what we're asking for,'' he asserts, referring to the deadline for resolving the construction issue, ``and then we'll have to initiate some action that will get results.''

In addition, Japan has until April 30, 1990, to correct its procurement practices in the satellite and supercomputers sector as well as technical barriers to trade in the forest-products sector. Its failure to do so may result in punitive measures from Washington.

In move that surprised US officials, on Oct. 26 Japan's Foreign Minister Taro Nakayama endorsed Mrs. Hills' call for bilateral trade talks on US market access for satellites, supercomputers, and forest products. Talks begin later this month and are expected to run through December.