Bush Removes Japan From List of Unfair Traders; Lawmakers Protest
Apr. 27, 1990
WASHINGTON (AP) _ President Bush on Friday removed Japan from a ''hit list'' of countries judged to have erected the most offensive trade barriers against American products, rewarding Japanese efforts to ease trade tensions between the two economic superpowers.
Instead, the president said he had decided to cite only one country - India - under a tough section of U.S. trade law which provides for economic retaliation if the offending barriers are not removed.
The decision brought immediate protests from members of Congress, who charged the administration had made a serious mistake in not naming Japan, the country Congress specifically had in mind when it wrote the provision, known as Super 301, into the 1988 Trade Act.
''I am thunderstruck,'' Sen. Robert C. Byrd, D-W.Va., said in a Senate floor speech. ''Excuse me, Mr. President, but this boggles the mind. ... Letting Japan off the hook is a serious mistake and I think Congress ought to take a look at it.''
Critics said Japan needed to be targeted to keep pressure on the government of Prime Minister Toshiki Kaifu to live up to a flurry of trade concessions he has made aimed at lowering America's huge $49 billion trade deficit with Japan.
''It is clear that Japan should be on the list,'' said Sen. Don Riegle, D- Mich., one of the sponsors of the Super 301 provision. ''Our government is not using the tools that are available to correct this continuing hemorrhage of U.S. capital and jobs.''
But Bush, in announcing his decision, said he was persuaded that Kaifu shared ''my commitment to ensuring that trade strengthens, rather than undermines, the friendship between our nations.''
Administration officials said targeting Japan could provoke a public backlash against the United States and make Kaifu's job of reforming Japan's trading system even more difficult.
''We believe that the most effective way to achieve results is through cooperation, not confrontation,'' U.S. Trade Representative Carla Hills told reporters.
Japanese Foreign Minister Taro Nakayama praised the president's decision, saying it upheld his government's position that it would not negotiate with the United States under threat of retaliation.
But House Majority Leader Richard Gephardt called the decision a ''free trade furlough.''
''If we have learned anything over the years as we have fought to reduce our monumental trade deficit with Japan, it is that the only thing that works is clear, constant, consistent pressure for needed change,'' Gephardt said.
A year ago, the administration used the Super 301 provision to target Japan, Brazil and India as the countries with the highest barriers to American trade.
Japan was cited for barriers to sales of U.S.-made supercomputers, satellites and wood products. In the past month, U.S. and Japanese negotiators have reached market-opening agreements in all three areas.
Brazil was targeted for restrictive import licensing practices. Hills said recently enacted legislation in that country should meet U.S. concerns in this area.
But India, which was cited last year for a ban on operations of foreign private insurance companies and for controls on foreign investment that distort trade, has refused to make concessions.
The 1990 target list names those barriers again. Hills said India was singled out because it had erected more trade barriers than any non-communist country and the negotiations over the past year had made no progress.
The Indian government issued a statement saying it would continue to refuse to ''negotiate bilaterally under threat of sanctions.'' It said the best way to resolve the dispute was in the current round of global trade talks being held under the auspices of the General Ageement on Tariffs and Trade.
Members of Congress said it made no sense to target India, with its modest $850 million trade surplus with the United States, and neglect Japan, whose trade surplus accounted for almost half of America's $109 billion deficit last year.
''Naming India and not Japan makes a mockery of Super 301 and U.S. trade policy,'' said Rep. Sander Levin, D-Mich.
Senate Finance Committee Chairman Lloyd Bentsen said he was glad the administration had at least issued a new Super 301 list although he was disappointed that Japan was not included.
Bentsen, D-Texas, had warned earlier in the week that if the administration ignored the law completely this year he would work to block congressional passage of trade agreements the administration is expected to seek this year with the Soviet Union, China and the emerging democracies in Eastern Europe.
The 1988 trade law required the administration to issue a target list of countries with the most offensive trade barriers in 1989 and 1990. The law provides a tight timetable for negotiating away barriers and provides for retaliatory tariffs against the nation's imports into the United States if the negotiations prove unsuccessful.
Some in Congress said they would propose legislation to make the Super 301 designation an annual event, thus forcing the administration to address again next year Japan's success in opening its markets.