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Execs Put on Positive Spin, But Analysts See Failure With AM-Bush-Japan-Autos, Bjt

January 10, 1992

NEW YORK (AP) _ Executives returning with President Bush said Friday they made inroads in opening Japan’s markets to U.S. goods, but some experts called the highly touted trade trip an embarrassing failure.

The Bush administration received commitments from Japan to buy more American auto parts, computers, glass and paper products. Increased ties were predicted with Australia, Singapore and South Korea, the trip’s other stops.

But the president’s declaration that he was after more U.S. jobs and big concessions from the Japanese to reduce a burgeoning auto trade deficit left Bush looking like he had fallen short of his goals.

″It was a prescription for failure,″ said Jeffrey Arpan, chairman of the international business department at the University of South Carolina. He said the trip amounted to ″going over and begging for assistance to problems that we are essentially the cause of. I would say it was a rather embarrassing situation for everyone involved.″

The government argued it wants to eliminate Japanese trade restrictions, but experts said specific demands confounded free trade. Furthermore, Bush touted ″level playing fields″ but refused to yield, for instance, on U.S. agricultural subsidies hurting Australian farmers.

″In a sense it is affirmative action. We’re saying we can’t compete,″ said Robert Uriu, a Japan expert at Columbia University. ″We’re saying we don’t want fair access; we’re saying we want an ‘equitable’ outcome. ...

″That goes against all the tenets of free competition - not focusing on the ability to compete but focusing on a guaranteed outcome.″

But some executives who accompanied Bush said the trip started a dialogue with Asian nations and prodded Japan to open its markets somewhat. One aim was to wean Japan of a belief it can rely solely on its own products.

″The main thing is to get the wheels turning and keep on moving,″ said James Herr, chairman of Herr Foods Inc. ″We said we want to start this thing now. We think we made an impression.″

″The new government there is very positive about opening up their markets,″ said Dexter Baker, chairman of Air Products and Chemicals Inc., who also heads the National Association of Manufacturers. ″I’m convinced they really mean business, but we’ve got to be competitive.″

Japanese officials agreed to expand purchases of foreign-made computers by government agencies. That $3 billion market has been tough to penetrate but is small compared to the $16 billion private computer market, of which foreign companies already control 40 percent.

Japan also committed to expanding opportunities for U.S. paper producers in its $65 billion-a-year industry. U.S. producers say exports to Japan accounted for 2.2 percent of Japanese consumption in 1991, lowest in the world.

Elsewhere, Japan agreed to try to increase the U.S. share of its glass, construction and legal services markets. Japan’s Fair Trade Commission agreed to investigate whether anticompetitive practices exist in the auto, auto parts, glass and paper industries.

But the trip’s focus was the beleaguered U.S. auto industry, whose leaders assailed Japanese market barriers, mystifying executives who feel U.S. cars just aren’t as good as Japanese ones.

Japan committed to increase annual purchases of U.S. auto parts to $19 billion by 1995 from $9 billion now and agreed to buy up to 20,000 more U.S. cars a year.

″Without persistent outside pressure the Japanese will not move at all,″ Chrysler Corp. Chairman Lee Iacocca said in a harshly critical speech after returning to Detroit.

″The thing I want to protect is free trade,″ he said. ″And the way you do that is you retaliate against those who don’t believe in it.″

Because of such complaints from Detroit and the White House, some observers were left with the image of a groveling United States.

″The president who organized a global coalition against Saddam Hussein was reduced to the appearance of begging Japan to buy more American auto parts,″ The Wall Street Journal said in an editorial.

Critics said U.S. companies have focused on trade policy but failed to commit to a long-term presence in Japan or to style products for Japanese consumers.

″(Neither) the U.S. government nor the Japanese government can force Japanese consumer to buy products that don’t measure up,″ Arpan said.

″Basically, the Japanese are doing a much better job of satisfying our customers and are more truly committed″ to doing business in America, he said.

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