President Clinton has decided to sign an executive order reinstating his broad legal authority to impose trade sanctions on Tokyo quickly, an action that the Japanese have warned would mark a major escalation in the brewing trade conflict between the two countries.
Senior administration officials said the president had accepted the recommendation from his economic advisers and had asked his National Economic Council to meet Tuesday night to decide when the order should be signed and what elements it should contain. An official announcement is expected soon.
The council is headed by Robert Rubin and includes Treasury Secretary Lloyd Bentsen, Secretary of State Warren Christopher, Commerce Secretary Ronald Brown, Trade Representative Mickey Kantor and Labor Secretary Robert Reich.
The United States broke off trade talks with Japan two weeks ago after Tokyo refused to accept U.S. demands for numerical indicators to show whether it was opening its markets.
Since then, the Clinton administration has been considering measures to compel Japan to open markets for insurance, telecommunications, autos and medical equipment.
Administration and congressional officials said that after considerable debate, a majority of the President's National Economic Council recommended to Clinton last week that he reinstate by executive order the "Super 301" trade retaliation mechanism.
This would be the trade equivalent of loading and cocking a rifle but not pulling the trigger. The hope among U.S. officials would be that just that ominous sound would get the Japanese to agree to some market-opening initiatives before they are actually named under Super 301.
Some analysts argue that putting such a powerful weapon into place could mark a dangerous increase in U.S.-Japanese trade tensions. But that view did not prevail with the president, who sided with those officials who believe that only credible threats will get Japan to lower its trade barriers.
Super 301 is a lapsed provision passed by Congress in 1988. It requires the U.S. trade representative to identify the countries that maintain the most egregious trade barriers and to initiate what are known as "Super 301 cases" to eliminate those barriers.
Presidential authority lasts for only two years under the insistence of the Reagan administration, which thought it interfered with free trade.
If the United States asks the offending country to eliminate the specific barrier and it refuses to do so quickly, the president has the authority to retaliate by blocking an equivalent amount of that country's exports to the United States.
So if Japan is deemed to be creating barriers that prevent the import of $100-million in U.S. telecommunications equipment, the United States would impose punitive tariffs on an equivalent amount of Japanese products to prevent their coming into the United States.
The president has 12 to 18 months to negotiate with the offending country before the retaliation takes effect.
The president already has the authority to impose trade sanctions under section 301 of the 1974 Trade Act. Super 301 is an amendment to that section that requires that any sanctions be imposed more quickly. Without Super 301, some trade cases have dragged on unresolved for nearly a decade.
Clinton would be signing an executive order that would reinstate Super 301 by administrative fiat. That would give him the authority to both list the offending countries and initiate trade sanction cases against them.
But he probably would not name Japan as a violator right away. He simply would reinstate his authority to do so.