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Government To Ask Japanese Automakers to Cut Export to U.S.

December 27, 1991

TOKYO (AP) _ The government is considering asking automakers to reduce exports to the United States to help ease the trade tensions expected to be the focus of President Bush’s visit next month, trade officials said today.

However, the effectiveness of such a measure in shrinking Japan’s trade surplus is in doubt, given that the number of cars exported to the United States has been declining in recent years while the trade imbalance has grown.

Japanese officials have pledged to make their best efforts to answer U.S. trade concerns, but also complain that Washington is seeking short-term solutions.

Bush, facing a recession in an election year, is expected to make tough trade demands on his Jan. 7-10 visit.

About 75 percent of last year’s $41 billion trade surplus was connected with the automobile industry.

International Trade Minister Kozo Watanabe told a news conference today that the government was considering an export-reduction plan that could be ready before Bush arrives.

Bush is bringing the chairmen of the Big Three automakers with him to Japan. Government and business officials therefore worry they will be under strong U.S. pressure for measures to quickly reduce the trade gap in cars and auto parts.

″Because of a strong request from the United States, we are now considering a reduction of car exports as one of our measures,″ said one Japanese trade official, speaking on condition of anonymity.

″We are discussing (export reductions) with the industry people to gain their understanding and finalize the details,″ the official said.

Toyota Motors Corp., Japan’s largest automaker, and Nissan Motors Co., the nation’s second-largest, said they have not received a formal request to reduce export levels next year.

Japan voluntarily restricts annual car exports to the United States at 2.3 million units a year, but actual exports have fallen below that ceiling since 1987.

Passenger car exports to the United States in the fiscal year ending March 31 are expected to be about 1.75 million, down from about 1.85 million a year earlier, according to the Japan Automobile Manufacturers Association.

That trend is expected to continue, in part because of increased output at their factories in the United States.

Trade officials also are asking automakers to boost imports of car parts beyond the pledges already made to nearly double overseas purchases.

American trade officials also want to boost the U.S. share of the Japanese car market, now less than 0.4 percent. Japanese often complain that American automakers are not doing enough to sell here, while U.S. officials say informal barriers such as overly stringent inspections keep imports out.

A senior Foreign Ministry official indicated today that trade issues would not be ignored in documents to released at the end of the summit.

Initially, Japan hoped the summit between Bush and Prime Minister Kiichi Miyazawa would produce a declaration focusing on global cooperation between the two economic superpowers.

But Japan now supports issuing documents at the summit’s end regarding ″concrete action plans″ on economic and other pressing issues, the official said.

A U.S. request for Japan to contribute to the $8 billion superconducting super collider project planned in Texas also is expected to be a major item on Bush’s agenda.

The governing Liberal Democratic Party has decided to back the super collider, a scientific project designed to explore the fundamentals of matter, but there has been no decision on the method or scope of aid.

Update hourly