Bill Clinton's Japan Policy
Bill Clinton barely mentioned Japan during his campaign, but the President-elect is quietly staking out a new approach to dealing with Tokyo. Instead of pressuring Japan to be more like America, Clinton wants to position the U.S. to act more Japanese. His long-term economic agenda of managed trade, public and private investment incentives, technology support, and deficit reduction aims to make the U.S. more competitive with Japan by borrowing some of what he regards as Tokyo's best plays.
If he pulls it off, the Clinton Administration may be able eventually to preempt trade clashes by shoring up U.S. competitiveness. Meanwhile, Japan still needs gaiatsu, or outside pressure, to compel it to overcome its distaste for foreign goods. Tokyo's trade surplus with the U.S. is growing again, but with their economy under siege, the Japanese will find it more difficult to increase imports. That means that a more muscular trade policy will be needed to yield results.
Take semiconductors, which are critical to U.S. competitiveness in a host of industries. Since 1986, Washington has put up with a stream of unfulfilled pledges by the Japanese to buy 20% of their chips from non-Japanese sources. The Bush Administration kept threatening retaliation but rarely acted. Foreign semiconductor sales hit 15.9% of Japan's market in the third quarter of 1992, but Japan is sure to have missed the 20% target by the Jan. 1 deadline. Tokyo's complaints that U.S. chipmakers don't try hard enough rings false: U.S. producers outsell Japan in the U.S. and have major shares in the European and Asia-Pacific markets.
A results-oriented, managed-trade approach isn't called for in most trade disputes. But chips are worth cutting market-share deals over, and we must make sure those deals stick. U.S. chipmakers can't get a fair share of the Japanese market without Clinton's help.
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