7/83 US ATTITUDE TOWARDS JAPAN HARDENING

A group of senior American business leaders, led by the Chairman of Caterpillar is asking the US to take measures to bring the yen into what they perceive to be the suitable level of around 200 yen to the dollar. If necessary they would recommend going as far as imposing levies on Japanese imports in order to bring prices into line. Specifically, they want Japan to drop upward limits on interest rates on loans and deposits, abolish controls on foreign investments in yen bonds and short term yen loans, increase the allotments for negotiable yen certificates of deposit, open up the market for Ministry of Finance short term securities to foreign investors, authorize importers for yen financings, promote the use of the yen as a reserve currency by foreign governments, promote foreign borrowings by the Japanese government, and abolish restraints on yen futures transactions. On the other hand, Martin Feldstein, Chairman of the President Ronald Reagan's Board of Economic advisers does not believe the yen is the problem in US-Japan trade but rather regards the main problems the difficulty of US firms to sell their products in Japan. Most US officials are taking a wait and see attitude concerning the latest trade package involving simplification of Japan's import standards and certifications. Nevertheless, William Tanaka, a trade lawyer famous for representing Japanese firms feels that the attitude towards Japan has become more tense, as more and more protectionist legislation is being introduced every day. A recent poll of American opinion leaders showed that 76% felt that Japanese trade policies were very unfair or somewhat unfair. The same group had the following feelings about trade policies with other trade partners: France-46% fair, 41% unfair; W. Germany-79% fair, 12% unfair; Britain 82% fair, and 10% unfair; US 92% fair, 5% unfair. Senator Metzenbaum of Ohio has filed a bill with Congress that would amend Article 201 of the 1974 Trade Act. That article provides for relief for US industry when "substantially" injured by imports. His amendment would change that to "considerably". The difference is that "substantially" is interpreted as meaning imports are the major cause of the injury. "Considerably" would mean that imports were an important factor, but not necessarily the most important factor.

THE JAPAN LAWLETTER JULY-AUGUST 1983 Editor: Roderick Seeman