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Bring Back the 'Wise Men' to Help Ease All the U.S.-Japanese Trade Friction

By Jimmy Carter

This article originally appeared in The New York Times, Feb. 18, 1994; it was also published in the The Houston Chronicle, Feb. 20, 1994.

Ever since Japan became one of our most important trade partners and competitors, differences in national policies and priorities have threatened to degenerate into a counterproductive trade war. The current standoff is the most threatening in recent years and could have extremely serious consequences.

Such disputes are hardly unexpected, given the integration of Japan's Government and private sectors and its extreme dependence on exports. There is little doubt that Japan, a relatively closed society, has alliances among corporations that would violate American antitrust laws as well as safeguarded paths of product delivery from raw-material suppliers through manufacturers, wholesalers and retailers to consumers.

National laws and customs perpetuate these arrangements, making penetration of the market very difficult for foreigners unless they find a way to become part of the system.

In fairness to the Japanese, our laws almost completely exclude foreign imports that compete with vulnerable or politically powerful American industries or farm producers. Then, too, until recently most of our manufacturers depended on our enormous domestic market for sales, with relatively little emphasis an exports.

With a few notable exceptions, our consumer goods are not designed to accommodate the exceptional preferences of foreign consumers: How many Japanese cars would Americans buy if all their steering wheels were on the right side?

Still, there are situations and products that require attention at the highest level in Washington to enhance equitable access to markets, protect domestic employment and prevent the dumping of foreign goods here at or below production cost.

These factors are exacerbated by domestic political pressures, with leaders of both nations striving to avoid blame for economic problems and to gain credit for spirited actions and words against economic competitors. Fiery language, threats and step-by-step sanctions can escalate almost beyond control.

There is a proven alternative to counterproductive sanctions, public condemnations and arguments. In the late 1970's, a U.S.-Japan Economic Relations Group met regularly and privately to address the multiple trade problems that inevitably arose.

The Prime Minister appointed four Japanese and I chose four Americans. Soon known as "wise men," all were respected senior statesmen knowledgeable about life and politics in both countries. The co-chairmen were former ambassadors Robert Ingersoll and Nobuhiko Ushiba. With them were A.W. Clausen, Hugh Patrick, Edson Spencer, Akio Morita, Shuzo Muramato and Kiichi Seeki. They had no authority and only advised the President, Prime Minister and special trade representatives.

Controversial issues -- like those involving the quantity of imported shoes, TV sets and cars -- were referred to them. For example, Japan quietly accepted a proposal that it limit the number of cars exported to America and begin a program of producing Japanese cars here. Another resolved a crisis related to allegations that the Japanese were dumping certain kinds of steel products on the American market at prices below those demanded in Japan.

The wise men's suggestions (almost always unanimous) were shared with top national leaders, who were still free to become personally involved or to initiate a public debate. The system worked remarkably well. Developing problems could be addressed almost immediately before they became controversies, and the result of actions taken could be assessed quickly. There was almost total freedom of communication, confidentiality was preserved and the need for face-saving and political rhetoric were minimized.

The President and Special Trade Representative were provided with sound and well-balanced advice on which to make decisions. Among private business and financial leaders in both countries, knowledge that the wise men had considered an issue and made a joint recommendation carried great weight and helped remove the stigma of politicization.

The wise men were disbanded soon after Ronald Reagan was inaugurated. The same system can work again and be initiated almost immediately. It would pay rich dividends.

Jimmy Carter, the former President, is chairman of the Carter Center.

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