February 16, 1994, Wednesday, FINAL EDITION

SECTION: NEWS; Pg. 13A

LENGTH: 1113 words

HEADLINE: No winners in Japanese trade war

BYLINE: James Bovard

BODY:
The Clinton administration has fired the first shot of a full-scale trade
war with Japan, threatening to slap additional tariffs on Japanese products as a
penalty for refusing to formally promise to buy more American autos and other
products.

While this makes great short-term media coverage for Clinton in the United
States, it would be difficult to conceive of a more foolish, hypocritical and
self-defeating policy for America's permanent interest.
USA TODAY, February 16, 1994

There is no question that the Japanese have often been as creative with trade
barriers as they have been with manufacturing processes.

As Prime Minister Morihiro Hosokawa says, the Japanese government must
further reduce its trade barriers and allow Japanese workers to reap the harvest
of prosperity which they have earned.

But partly as a result of Japan cutting its trade barriers over the past
decades, U.S. exports to Japan have more than doubled since 1985. U.S. exports
to Japan have increased much faster than Japanese exports to the United States
over the past half-decade.

And many American industries, such as steel and autos, have greatly benefited
from Japanese companies entering into partnerships to share their superior
technology.

While Clinton administration officials denounce Japanese protectionism,
American personal computer makers such as Dell, Compaq and Apple are taking the
Japanese market by storm with soaring sales and rapidly rising market share.

Why? Because they offer much better products at far lower prices than do
Japanese computer makers. Many other American companies and industries with
USA TODAY, February 16, 1994

superior products are also going gangbusters in the Japanese market.

For too many years, the starting point of trade-policy debates in this
country has been the notion that the United States has few or no trade barriers
and is suffering from its free-trade policies. U.S. Trade Representative Mickey
Kantor claims that the United States is the largest open market in the world.

But in reality, American consumers are suffering from a convoluted system of
trade barriers that often look as if they were invented in an insane asylum.

U.S. agricultural import quotas permit each American citizen to consume the
equivalent of only one teaspoon of foreign ice cream per year, two foreign
peanuts per year and one pound of imported cheese per year. U.S. beef quotas add
almost a billion dollars to the price of hamburger that Americans buy.

Congress is imposing over 8,000 different taxes on imports. While the average
U.S. tariff is now around 5%, some tariffs are in the stratosphere. Low-priced
watches are hit with an average tariff of 151.2%. Tobacco stems must pay a
458.3% tariff. Tariffs on some low-priced shoe imports are 67%.

Clinton and crew should examine U.S. textile trade policy before hectoring
the Japanese. Textiles have been heavily protected for over 200 years and are
USA TODAY, February 16, 1994

today our oldest infant industry.

The United States imposes import quotas on over 3,000 different textile and
apparel products, including tampons, typing ribbons, tarps, twine, towels,
tapestries and ties. Mexico in 1989 was allowed to ship the United States only
35,292 bras - not even enough bras to cup the neighboring city of Brownsville,
Texas.

U.S. textile trade policy is based on the sage insight that clothes are among
the most dangerous objects that a nation can import - thus justifying stricter
import controls on socks, nightgowns and hankies than on pistols, rifles and
deadly chemicals.

Last month, the Clinton administration imposed the first quotas on imports of
silk clothing - even though no silk clothing is produced in this country.

Trade barriers have also decimated the competitiveness of many American
industries, making it difficult or impossible for domestic companies to buy the
best steel, semiconductors or computer flat panels for their products.

Trade barriers are costing American consumers and businesses roughly $ 70
billion per year, according to the Institute for International Economics.
USA TODAY, February 16, 1994

This amounts to roughly a tax of $ 1,000 per family - a tax that hits
low-income Americans far harder than their middle- or upper-income neighbors
because they spend more of their paltry income on clothing and food.

Many congressmen want to pillory Japan because the Japanese had a trade
surplus of roughly $ 60 billion with the United States last year. But a Federal
Reserve Bank of New York study in 1985 estimated that only $ 5 billion to $ 8
billion of the U.S.-Japan trade deficit is due to Japanese trade barriers. A
U.S. International Trade Commission study of a proposed free-trade zone with
Japan noted that, if all trade barriers were abolished, the U.S. trade deficit
with Japan might actually increase.

Politicians denounce trade deficits - and then enact law after law and tax
after tax that further undermine American productivity and competitiveness. (The
U.S. tax code, unlike the Japanese tax code, still harshly penalizes Americans
who try to accumulate personal savings.) The best way to make American industry
more competitive is to make American politicians and bureaucrats less powerful.

The American consumer should not be treated as a sacrificial animal. Clinton
should find some other way to boost his approval ratings than by further closing
the U.S. border and allowing American producers to take their domestic customers
hostage.
USA TODAY, February 16, 1994

The cost of protection

While the U.S. complains about trade restrictions by Japan, the country also
protects some of its industries with trade barriers, which saves few U.S. jobs
and costs consumers higher prices. Here are a few examples of some heavily
protected products and the costs to save jobs in those industries.

No. of jobs Jobs saved Cost to consumers
Luggage 7,500 226 $ 933,000
Ceramic tiles 8,100 347 400,576
Machine tools 10,900 1,558 348,329
Textiles 593,900 16,203 202,061
Canned tuna 11,000 390 187,179
Household glassware 34,800 1,477 180,095
Apparel 871,300 152,583 138,666

U.S. exports to Japan

1982 $ 21 billion
1992 48 billion

U.S. imports from Japan
USA TODAY, February 16, 1994


1982 $ 40 billion
1992 97 billion

GRAPHIC: GRAPHIC, b/w, Cliff Vancura, USA TODAY, Source: Gary Hufbauer and
Kimberly Elliott, Institute for International Economics, U.S. Dept. of Commerce
(Chart, Line graphs)