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Japan trade pact marked by ambiguity

Just a day after the United States and Japan reached an automotive trade pact, the two sides started arguing Thursday over what the agreement meant, underscoring its ambiguity and weakness.

The argument indicates that the Clinton administration is trying a new tack in its efforts to break down Japanese import barriers: Since Tokyo won't agree to set specific, quantitative goals for boosting purchases of foreign goods, Washington is going to set some numerical "expectations" of its own and prod the Japanese to meet them.

But the indignant Japanese response suggests that the new approach is going to meet with the same resistance that the old one did _ and that the transpacific wrangling over cars and car parts, far from being settled, may continue for years.

The dispute over the accord's meaning began with President Clinton's statement Wednesday, echoed by other U.S. officials.

They said that the pact should lead to the establishment of 1,000 new U.S.-car dealerships in Japan by the end of the decade, and that "voluntary" plans issued by Japanese auto companies should generate almost $9-billion in increased Japanese purchases of U.S. auto parts by 1998.

Thursday, Japanese officials said Clinton's figures weren't included in the industry's plans. They dismissed suggestions that they had tacitly accepted the very sort of numerical targets they had sworn to resist.

Indeed, documents issued by the two governments specifically state that the Japanese government "has had no involvement" in estimating the figures Clinton cited and that the calculations are "solely" those of the U.S. trade representative's office.

"It's a sort of unilateral estimation or unilateral calculation, nothing more than that," said Hisashi Hosokawa, director general of the international trade policy bureau at the Ministry of International Trade and Industry, or MITI.

Masami Iwasaki, chairman of the Japan Automobile Manufacturers Association, told a news conference: "Those figures are what the U.S. calculated. We have not made a promise."

In an interview, U.S. Ambassador to Japan Walter F. Mondale said it is "our hope" that the Japanese will feel some moral compunction to try to achieve the U.S. figures, which he said "didn't come out of the air."

A former MITI vice minister, Noboru Hatakeyama, scoffed that Washington is simply trying to disguise its failure to get what it wanted at the negotiating table.

"I think what they're trying to do is save their face, frankly speaking," he said.

Some trade experts said the White House appears to be shifting its tactics. Since the United States couldn't get Japan to commit to certain numbers, it decided to announce some numbers and hope they stick, at least partly.

Even some Japanese analysts said the U.S.-set figures might influence Japanese corporate behavior.

"I think Japanese are wise enough to do their best to live up to the U.S. expectation, because they don't want further deterioration in the U.S.-Japan relationship," said Yukio Okamoto, an international-affairs consultant.

Mondale explained that the $9-billion figure for auto parts purchases includes about $6.75-billion that the U.S. side extrapolated using the automakers' projections of new facilities they intend to build in the United States plus their stated objectives of meeting domestic-content requirements under the North American Free Trade Agreement.

But it also includes a questionable $2-billion figure for imports of U.S. auto parts into Japan. That number is based on plans the companies issued a year ago that Washington dismissed as too vague and hard to understand.

More dubious still is the estimate that the U.S. Big Three automakers will add 200 outlets annually over the next five years to their dealer networks in Japan.

Mondale said the figure "is a number we showed (Japanese trade negotiators), which we thought we could get under these new rules" confirming the right of Japanese dealers to sell any cars they wish.

Since the Japanese didn't say anything about the figure, Mondale added, "our argument would be, it's a dog that didn't bark," so Washington feels comfortable in putting it forward as a "hopeful target."

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