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Nakasone to Confront Trade Issue at Venice Summit With AM-Summit-Reagan Bjt

June 3, 1987

TOKYO (AP) _ Trade is just one item on Prime Minister Yasuhiro Nakasone’s agenda for next week’s Venice summit, but it promises to be one of the most problematic for Japan and the other summit nations.

The United States and several of its European allies have accused Japan of marketing products overseas at prices far below their true value. Nakasone has promised to open Japan’s markets, increase domestic consumption and expand imports of agriculture products.

And while the Japanese Cabinet approved a $43 billion package of spending measures and tax cuts, a program expected to be approved by the parliment this summer, it still remains to be seen whether Japanese will buy more foreign goods.

Japan has a trade surplus of $82.7 billion. The U.S. trade deficit totals $166.3 billion. Among the other summit nations, West Germay and Canada have surpluses, $52.2 billion and $5.1 billion, respectively. Trade deficits were recorded by France, $4.5 billion; Britain, $19.2 billion; and Italy, $2.8 billion.

Motoo Shiina, a Liberal Democratic Party member of the Diet (Parliament), said Japan expects criticism at the summit over its aggressive trade policies. He said Nakasone must use considerable diplomatic skills to rebut the criticism and to emphasize Japan’s own concerns.

″This will probably be his last overseas trip,″ said Shiina, former director of the LDP’s international bureau. ″How effective can he be? This is what we’re worrying about.″

Nakasone has said he wants to discuss trade issues and protectionist measures being debated in the United States and elsewhere. He also will raise the issue of Third World debt and development aid.

Apart from trade matters, Nakasone plans to call for an international effort to fight AIDS, or acquired immune deficiency syndrome. He called the disease ″a problem for all mankind.″

″We’d like to make a contribution toward international cooperation (fighting the disease),″ Nakasone said at a House of Councillors Budget Committee meeting. ″I think AIDS will be discussed at the Venice summit.″

He said he supports a Japanese plan to provide 1 billion yen ($7.3 million) to set up a task force of 100 researchers to fight AIDS.

Nakasone also will present a plan called the ″Human Frontier Science Program″ designed to find a connection between human metabolism and thought, with a view to linking them with electronics. The program, which has received lukewarm support in Japan, calls for spending up to 6 billion yen ($43.8 million) in a project open to international researchers.

Japan wants informal summit discussion on the plan but did not ask for its inclusion on the official agenda because the goals remain vague.

Nakasone, among Japan’s most outspoken and visible leaders, was given an unprecedented one-year extension after his Liberal Democratic Party’s sweeping election victory last year.

There have been calls for his resignation after the summit, however, because of setbacks in local elections and a failed attempt to ram a new tax plan through the legislature. But political compromises appear to have improved his chances of serving until the end of his term in October.

His program to increase domestic consumption and open up markets has been criticized as an attempt to bypass the consensus process because the committee that drafted the plan was appointed by Nakasone, not by the government.

Nakasone also came under domestic pressure when he tried to push the 1987 budget through the House of Representatives Budget Committee, with tax reforms including a new sales tax. Opposition parties demanded the Cabinet’s resignation, claiming that Nakasone had violated a campaign pledge not to introduce any major new indirect tax. In mid-May the sales tax plan was scrapped.

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