Japan

Japan THE NEW YORK TIMES, WEDNESDAY, JUNE 7, 1995 what In Trade Dispute With Japan, Both Sides See Misjudgments By DAVID E. SANGER AI WASHINGTON, June 6 - As the But the bureaucrats themselves American deadline for a virtual em- Continued From Page Al say the crucial change is that they bargo on imports of Japanese luxury are no longer prepared to follow the cars approaches, both Japanese and cal importance that the White House lead of their predecessors, who usu- American officials now concede that placed on proving that it would bat- ally gave in to Washington's pres- they deeply miscalculated the other tle to expand American exports by sure as the price for America's guar- country's resolve in their trade con- opening markets perceived as per- antee of Japan's security. frontation. And so far, they say, nei- petually closed. Both sides agree "That linkage has become less ther side can find a way out. that another critical element is miss- convincing to Japanese politicians Economic officials and diplomats, ing from the confrontation: A back and the public, and that has a lot to in interviews in Tokyo and Washing- channel to allow straight talk be- do with the new assertiveness," said ton in the last two weeks, acknowl- tween the political leaders on both Eisuke Sakakibara, a senior official edged that they had failed to recog- sides. of the Finance Ministry who will nize critical political signals indicat- In the fractured Japanese Govern- soon take charge of its main interna- ing that neither side was prepared to ment, there is no one left to play that tional portfolio. back down. That happened despite role. The senior politicians who felt Another crucial change reflects all the intense efforts to study each indebted to the United States for not so much geopolitics as simple other, talk to each other and spy on rebuilding the country after World economics: The country's hard fall each other. War II have either been forced from to earth in recent years - and the The two sides appear farther power or retired. In Washington, the prospect of a double-dip recession - apart now than they were a few State Department - which usually has left it with no room to manuever. weeks ago. They cannot even agree urges caution in trade disputes - In the past, auto makers have on the subject of low-level talks in has taken a back seat, realizing that been able to agree to "voluntary Geneva that begin next week, nor on these days, economic imperatives plans" to buy more American-made the location of a subsequent negotia- trump everything else. car parts secure in the knowledge tion that may be the last chance to "For the first time, it is really all that their own suppliers could ab-. resolve the issue in time to prevent right for Japan to say 'No, we're sorb the loss of business. the 100 percent tariffs on 13 Japa- simply not going to give in,' said a That is no longer the case in a nese car models from going into seasoned Japanese official in Tokyo. country suddenly worried that its effect on June 28. "We haven't felt that way before, lifetime employment system is fray- Today, Japanese officials hinted and there is almost a euphoria about ing. By saying no, Mr. Hashimoto that they might be drawing up a list it. But what is missing are the safety can make the case that he is saving of American products that would be valves." jobs in Osaka and Nagoya, just as subject to retaliation. And on Mon- For all their second thoughts, Mr. Clinton is making the case that day night, Vice President Al Gore, American officials said they would he is creating jobs in Detroit and sitting beside President Clinton dur- have gone ahead anyway with the Cleveland. ing a television interview, delivered threat of the $5.9 billion in sanctions, Breaking the impasse will not be a stern warning to the Japanese. "If which apply to all the Japanese luxu- easy. In Tokyo, the Prime Minister, they in any way misjudge the ry cars imported since May 20 if no Tomiichi Murayama, is considered strength and resolve of the Presi- resolution was reached. But a few incapable of striking a deal with dent in pursuing this," Mr. Gore Clinton Administration officials now President Clinton when they meet said, "they're making a serious mis- concede to being overoptimistic next week in Canada. take." about how Japan would react to an But Mr. Murayama's weakness But officials on both sides say that extreme form of "gaiatsu," or for- may have been misinterpreted in a number of such mistakes have eign pressure. Washington as a sign that the Japa- already been made. Rather than force a fractured Jap- nese would quickly fold. Soon after The United States, some officials anese leadership to cave in, as Wash- the luxury-car sanctions were im- ington hoped, the sanctions have bol- posed, Laura D'Andrea Tyson, the now acknowledge, missed the impor- stered/the influence of the most con- head of the National Economic Coun- tance of a generational change in the frontational member of the Japa- cil, told a group of reporters that bureaucracy in Tokyo, one that has nese Cabinet, Ryutaro Hashimoto, "what makes this trade disagree- brought in trade hard-liners who are who serves as the Minister of Inter- ment different is that this time the worried that Japan's 40-year run of national Trade and Industry. Japanese are divided, and we are surging growth may finally be over. unified." And in Tokyo, Japanese officials "He tends to act like a big shot, That proved wrong. In fact, the say they underestimated the politi- that is his style," said Tsutomu vacuum of leadership has prevented Hata, a former prime minister and a airing of the usual divisions over Continued on Page D6, Column 3 political opponent of Mr. Hashimoto. trade policy and left the Japanese "But fundamentally, everyone has to bureaucracy to press its case that say that he is right on this, and the yielding to the United States on tar- United States cannot take unilateral gets for the car market would only action when it doesn't like the results increase Washington's appetite for! of our trade relations." similar standards in other markets. That view, once considered be- Lurking behind all this is the ap- yond the pale in Tokyo, has become proaching anniversary of the end of mainstream politics. World War II, an event that has What has changed? The American stirred a great debate over how Ja- Ambassador in Japan, Walter F. pan should apologize for what many Mondale, said he thought that the right-wingers insist was nothing answer might be found in the rise to more than a "war of liberation" for power of a new generation of Japa- Asia against the West. nese bureaucrats, who now argue "This is not the moment to be seen that after decades of leaning toward giving in to the victors in the war," America, the time has come for Ja- one of Mr. Hashimoto's political ad-i pan to lean back toward the rest of visers said last week. "That is why Asia. this could take a long time."