Big stick scars face of trade

WE ALL know about saving face. It is important in all relationships, but most particularly between Asia and the West and most specifically between Asia and the United States.

Over the past few years, much has been written about the US and Japan as a contra- dance between two economic superpowers who remained friends despite divergent interests and often strong disagreements over goals.

Of course the US, as the long-established superpower and wartime victor, usually set the tone and Japan, as expected, usually caved in. That may have changed for good last week with the signing of a meaningless agreement that papered over enmities.

US and Japanese officials gave starkly different interpretations of the resumption of their 'framework' talks, which ended a three-month stalemate in bilateral trade negotiations. US officials declared triumphantly that they had used a crowbar to pry open Japan's closed markets, offering up specific sectors such as communications, medical equipment, cars and car parts on a once-empty plate. The Clinton administration said that its market-opening measures would usher in a new era in relations with Japan.

Not so, countered Japan's negotiators, who for once refused to rubber-stamp US explanations. Japan did not agree to the use of 'objective criteria' to measure market-opening progress and it did not commit itself to a 'results- oriented' approach that stresses the sale of foreign goods in Japan. Indeed, the Japanese team thought that it had won a major victory by wresting assurances from the US that it would not rely solely on 'numerical targets' to measure trade progress.

To use a favourite Japanese expression, the two sides negotiated a tama-mushi iro agreement, one having the colour of the tama mushi, a Japanese beetle whose wings can appear green or blue or some other colour.

Although the 'framework' talks will now resume, the time and place are not announced and there are no deadlines. Under the original text negotiated last July, a first round of Japanese market-opening measures was to have been announced by 11 February and a second by the Group of Seven summit meeting this July in Naples. Now, the best that either side will forecast is a 'public accounting' of progress when President Clinton meets Prime Minister Hata in Naples. Was this really worth all the blood, sweat and tears?

At day's end, it is hard to see how an extremely fragile coalition government headed by a reluctant prime minister can accede to US market-opening demands that have little public support.

Mr Clinton got bad advice on how to achieve his oft-pledged goal of 'transforming the nature of US-Japan relations' through real and substantive trade-opening measures. There is no argument that Mr Clinton's desire to reduce Japan's record dollars 130bn (pounds 87bn) current account surplus is a good one. The problem lies in the means the administration chooses.

It is ironic that the 'back-door' channels that led to prior market-opening breakthoughs were most often handled by Mr Hata. In his former life as a distingushed bureaucrat, most recently as foreign minister, he was the link between the White House and the prime minister's office. In this administration, the back-door channels have been closed or short-circuited.

The main difficulty with this administration on trade is its public 'big stick' approach. Even when the Hosokawa government was hanging by a thread, and the prime minister was sending private emissiaries to Washington to plead for a little time, US officials relentlessly kept up the pressure. Ironically, the coalition government that Mr Clinton had pledged to support was steadily undermined by this approach, resulting in business as usual, with power vested in Japan's almighty bureaucracy.

The situation is no different today. Following last week's agreement, one US negotiator boasted that the Clinton administration had broken the deadlock without 'giving in on any US position'.

In other words, the US team had brought the Japanese to their knees once again. This goes against the very grain of face-saving, and it is not the way of meaningful negotiations.