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Clinton Warns Japanese to Limit Steel Exports and Open Markets

By Jonathan Peterson

President Clinton Monday applauded new Japanese efforts to open its economy to foreign competition and slash red tape that strangles competition.

But Clinton, in a joint news conference with Japanese Prime Minister Keizo Obuchi, warned that the Asian nation must restrain its steel exports to the United States or face U.S. retaliation.

“We will take action if steel imports do not return to their pre-crisis levels on a consistent basis,” Clinton said. “Playing by the rules of trade is the best way to sustain a consensus for open trade ... It will help Japan adapt to the challenges of the new global economy.”

For his part, Obuchi said he would “squarely watch” Japan’s economic performance in the next couple of months for “tangible” signs of a recovery. “I believe we have adequate policy measures in place,” he said in defense of his economic plan, adding, “I believe we now see the financial system moving ahead towards regaining international confidence.”

The two nations released details of new Japanese efforts to deregulate its economy and open it up to foreign competition. Japan agreed to ease restrictions to foreign participation in telecommunications, building materials, medical devices, pharmaceuticals, financial services, energy and retailing. And, in a separate statement, Japan said that increasing foreign investment would further strengthen the economy.

But the moves did not eliminate U.S. questions about whether Japan was genuinely opening the curtain on its traditionally protected economy. Clinton pointedly noted ongoing trade controversies involving Japanese protection of insurance, automobiles and glass, along with access to the potentially lucrative market of Japanese government procurement.

“Too often our industries have found that while they might be able to set up shop, the restrictions of an over-regulated market in Japan made it impossible for them to sell on competitive terms,” said U.S. Trade Representative Charlene Barshefsky.

Japan Monday said it would give companies greater flexibility in establishing telecommunications networks, and would also allow foreign ownership of TV enterprises.