Japan Predicts Economic Turnaround (05/04/99)
By MARTIN CRUTSINGER=
AP Economics Writer=
WASHINGTON (AP) _ Japanese Prime Minister Keizo Obuchi is
telling President Clinton what he wants to hear _ that the world's
second largest economy is poised to make a ''major turnaround''
that will provide relief for a troubled global economy and the
soaring U.S. trade deficit.
But while the United States and Japan announced a flurry of
trade deals during Obuchi's meetings Monday with Clinton, the
president and others in his administration pointedly warned that
Japan must address a host of other irritants, including, most
importantly, rising steel shipments to the United states.
A flood of cheap steel from Japan and other countries has
resulted in thousands of layoffs in the American industry, raising
a protectionist clamor in Congress as America's trade deficit hit a
record $169 billion last year.
Concerns over the widening U.S. deficit with Japan, which
climbed to a near-record $64 billion last year, were raised by
members of Congress today in meetings with Obuchi.
Senate Majority Leader Trent Lott, R-Miss., called Obuchi's
visit to America ''very timely'' because of the number of issues
that need to be addressed in the relationship between the world's
two largest economies.
Lott said the discussions with Senate leaders covered ''a number
of issues from economics to trade to security.'' He singled out
Japan's $200 million in economic support to deal with the Kosovo
refugee situation for praise.
Lott said Congress was appreciative of Japan's support in the
effort ''to bring a peaceful solution and to address the
humanitarian needs of the Kosovars.''
America's rising trade deficit has battered American
manufacturers in steel and other industries, who have seen their
overseas markets shrink because of spreading recessions in other
nations, and have had to compete against rising imports pouring
into the United States, the only major economy doing well.
The House has already passed a bill that would impose global
quotas on steel imports even though the administration has said the
measure is clearly in violation of U.S. commitments to the World
Trade Organization.
While steel shipments from Japan are running below last year's
levels, Clinton said he impressed on Obuchi the need to make sure
they remain low. The administration has been pushing Japan to boost
its own economy to help lift its Asian neighbors out of recession
and take pressure off the U.S. trade deficit.
On that score, Obuchi brought an optimistic forecast, saying
massive amounts of government spending and serious efforts to deal
with Japan's banking crisis should soon begin to bear fruit.
''I explained to the president that Japan is swiftly and boldly
taking every measure in order to address the difficulties we are
facing,'' Obuchi said at a joint news conference with Clinton on
Monday.
Obuchi predicted his government's effort would result in a
''major turnaround'' that will pull Japan out of its worst
recession in 50 years.
Clinton and Obuchi both welcomed a new package of trade
agreements announced Monday that are designed to boost American
exports to Japan.
Japan pledged to take a series of actions, including reducing
hookup charges for foreign telephone companies seeking to crack
Japan's vast telecommunications market, revising regulations that
have prohibited sale of American lumber for homes and apartments
and shortening the approval time for new drugs offered by U.S.
pharmaceutical companies.
These measures were follow-ups to an initial package announced
by the two countries at last year's Group of Seven economic summit
in Birmingham, England.
In addition to measures benefiting specific industries, the
administration struck deals it said would expand opportunities for
American businesses to make foreign investments in Japan and
strengthen Japan's antitrust enforcement.
As evidence of what one U.S. official called a ''sea change'' in
Japan's approach to economic issues, the administration pointed to
a column Obuchi wrote last week in The New York Times in which he
said, ''Unless we adopt a more flexible economy driven by the
market, Japan is doomed to economic and technological decline.''
But private analysts said the structural problems Japan is
facing are so severe that it is far from clear that Japan is
willing to go far enough in changing its society.
''The Japanese economy is so over-regulated and structurally
distorted that the normal economic tools don't work,'' said Clyde
Prestowitz, head of the Economic Strategy Institute, a Washington
think tank devoted to trade issues.
Obuchi offered Clinton support on the administration's efforts
to deal with the Kosovo crisis and pledged $200 million in
financial aid to help affected nations in the region. The two
leaders also pledged continued cooperation in dealing with nuclear
and missile threats posed by North Korea.
|
