Was it? On the surface, some of the criticism was justified. The administration clearly overpromised what Bush could produce in terms of direct benefits to a troubled U.S. economy. Tokyo never had any intention of rolling over for the administration’s key concern: selling more American cars in Japan. That was doomed from the start, largely because the Japanese don’t think much of American cars. In the end, the Japanese auto companies agreed to ask their dealers to sell a token number of additional U.S. cars, to the anger of the Big Three bosses whom Bush brought with him, and Democrats in Congress. Says House Majority Leader Richard Gephardt: the agreement was “little more than pictures and press releases.”
Yet for all the negative reviews, the trip may turn out to have more long-term merit and tangible benefits than immediately meet the eye. Commerce Department officials were privately frustrated that they got almost no credit for coming away with commitments worth about $10 billion from the Japanese carmakers to buy more U.S. auto parts over the next three years. True, a lot of that business is going to Japanese firms operating in the United States. But it’s mostly Americans who work in those plants, and as one furious U.S. government official put it , “Ten billion dollars is real money no matter who’s counting.”
More important than the numbers or Japanese concessions was the event’s symbolism-a fact that even the disappointed Big Three chairmen underscored. With this trip, George Bush–the “car salesman,” as the Japanese press called him-finally altered the official terms of the U.S.-Japanese dialogue. He made it clear that with the cold war over, Washington will now make trade Issue No. 1 in dealing with Tokyo. As Chrysler chief Lee Iacocca put it, the mere fact that Bush brought top businessmen along with him marks “a major step toward a more cooperative relationship between government and business” in dealing with economic challenges.
Free-traders still abhor the notion of Washington going to bat for U.S. business. Their favorite pose last week was to say Bush’s trip “demeans the presidency,” as William Niskanen, a former Reagan administration economist, told one reporter. In this view, the president, as the leader of the free world, should devote foreign trips to high-minded issues of diplomacy and national security.
However well-intentioned that argument may be, it is a product of the post-World War II, cold-war era-when the United States effectively had no meaningful foreign economic competition and cared almost solely about containing the Soviet Union. Now it is moot, and the biggest threat to America’s well-being comes from economic competition. “We could afford not to care about business before,” said one CEO on the trip. “We can’t anymore.”
The auto industry’s plight is evidence of how much turmoil the combination of Japanese competitive strength and U.S. industrial complacency can cause, What isn’t apparent in the United States is that the Japanese are preparing the same sort of challenge in a broad array of critical industries, from computers to telecommunications. In part because they have absorbed the lessons of Detroit, many of those industries are better equipped to handle the threat. But as one American high-tech executive in Tokyo put it last week, “Even now, the U.S. underestimates the magnitude of the competitive challenge coming down the pike from Japan.”
That challenge is so formidable because for some 40 years, the business of the government of Japan has been–most emphatically-business. Washington now has a choice: it can smugly lecture Japan, whose citizens now have a higher per capita income than Americans, that such a policy has been beneath the dignity of a great country. Or it can bring business leaders to Tokyo with politicians and try to haggle with Japan on its own terms. George Bush made his choice last week. It was a fitful exercise carried out almost exclusively for his own political reasons. But it was a start.
