U.S. Recession: Made in Japan? : Let’s hope the rhetoric cools by Jan. 7

Once again the dialogue in U.S.-Japan relations finds Washington demanding concessions from Tokyo. Fine--maybe all’s fair in love and trade negotiations. But the Bush Administration is playing a dangerous game of excess this time in blaming Japan, in so many words, for the U.S. recession.

Making Japan the fall guy for U.S. economic woes may be politically expedient for a President who only this month conceded--as his popularity plummeted--that the nation was in recession.

But what Tokyo can’t do is make up for U.S. failures to get hold of an economy that was undergoing structural changes long before the recession.

Fortunately, Tokyo is the last stop on the President’s current 12-day tour of the Pacific. The political hype and rhetoric must be modulated by the time Bush arrives in Japan Jan. 7.

Bush has characterized his trip as a quest to create and save “jobs, jobs, jobs” for America. Thus a diplomatic goodwill trip has turned into a trade mission, complete with 21 fuming U.S. business executives who want greater access to Japan.

The trouble now is the presidential entourage is getting carried away. Commerce Secretary Robert A. Mosbacher said Sunday the claim that the U.S. recession was made in Japan is “partly correct.” He said that “by not allowing U.S. goods into Japan,” the Japanese prevent the creation of more jobs in America. Nice sound bites, but they are misleading. The federal budget deficit and other high levels of debt have cost the U.S. economy dearly in terms of new productive investment and global competitiveness.

The Japanese have characterized the President’s first meeting with his old friend, new Prime Minister Kiichi Miyazawa, as “gunboat diplomacy.” The battery of U.S. executives is seen as a show of force aimed at opening Japanese markets.

But Tokyo is scrambling to be cooperative.

On Monday, the Bank of Japan cut its discount rate to 4.5%, which was greeted enthusiastically on the Tokyo Stock Exchange and could spur demand for imports. By pumping up its domestic economy, Japan could put less emphasis on selling goods abroad.

Tokyo is working to expand U.S. exports to Japan. Accepting rice imports would be a boost to Japan’s image. Changing industrial standards that favor Japanese products and encouraging Japanese auto makers again to purchase U.S. car parts also would help the U.S.-Japan relationship. Further restraints on Japanese auto exports will not solve the U.S. $40-billion trade deficit with Japan.

None of these measures will cure the sick U.S. economy. Twenty-six thousand miles is a long way to go for solutions to economic problems rooted largely in our own back yard.