Japan not culprit in trade deficit

Putting things in perspective.

The trade numbers for 1989 are in. The bad news: The United States still imports more than it exports. The good news: The U.S. trade deficit dropped to a five-year low.

The U.S. trade deficit for 1989 was $108.6 billion, down from a high of $150 billion in 1987.

However, the interesting thing is to look more closely these numbers than we usually do. Canada remains the largest U.S. trading partner - not Japan or the United Kingdom. The two-way trade between the United States and Canada in 1989 was $167 billion, up from $85 billion in 1980.

By contrast, the two-way trade between the United States and Japan was less than $140 billion last year. We exported goods worth $45 billion to Japan, and the Japanese exported products worth $94 billion the the United States - giving us a $49 billion trade deficit with Japan.

But for those who say we cannot compete in Japanese markets, let's take an even closer look. While Americans were exporting $45 billion to Japan, we sold only $25 billion to Mexico, only $21 billion to the U.K. and only $17 billion to West Germany. In short, U.S. exports to Japan were larger than its combined exports to the U.K. and West Germany.

Let's look at it on a per capita basis. Each Japanese consumer bought an average of $366 worth of products made in the United States last year. But in West Germany, per capita consumption of U.S. made goods was only $277; in Mexico, only $288.

Among our major trading partners outside the U.S.-Canada free trade area, only the U.K. at $366 equaled the Japanese level of per capita consumption of U.S. exports.

The point is that American business is, in fact, doing very well in Japan. Sure, we could do better. It is true that Japan has an archaic business system and mercantilistic business practices that make if difficult for the United States and other nations to sell their products there.

But despite all the non-tariff barriers and other structural impediments - which are serious problems that need to be addressed aggressively by U.S. trade negotiators - U.S. exporters have been more successful in penetrating the Japanese market than many European or Latin American markets.

We are now on the eve of another round of Japan bashing. Deadlines for our complaints against Japanese trade practices on supercomputers, satellites and wood products are coming up in April, May and June. There is growing support in Congress for managed trade and other manifestations of protectionism and economic nationalism, especially among the congressional Democrats.

The U.S.-Japan relationship, which should be nurtured, not abused, is also broader than trade. Where there are problems, they should be fixed. But much of our trade deficit with Japan and other nations, can be traced to problems here at home, such as education, quality of production and the inability of Congress to eliminate the federal deficit. We should not blame others for our problems.