NAKASONE TO MEET REAGAN AMID TRADE TENSIONS
Prime Minister Yasuhiro Nakasone,
beleaguered by political turmoil at home, sets out Wednesday on
a tough mission to Washington aimed at defusing the most
serious U.S.-Japanese trade tension in recent memory.
    Two rounds of talks between President Reagan and Nakasone,
scheduled for Thursday and Friday, come on the heels of the
imposition by the United States of punitive tariffs on Japanese
goods for the first time since World War Two.
    In the past, bilateral trade friction involving cotton
goods, steel, television sets, textiles and cars have ended
with Japan taking on voluntary export curbs.
    Nakasone's visit could coincide with the passage of a
protectionist trade bill by the U.S. House of Representatives.
    A proposed amendment to the bill, drafted by Representative
Richard Gephardt of Missouri, will mandate a 10 pct annual
reduction in the trade surpluses of Japan and other nations
which have large trade gaps with the United States.
    The United States last year had a record trade deficit of
169.8 billion dlrs and Japan accounted for about one-third.
    Foreign Ministry spokesman Yoshifumi Matsuda said recently
he was reasonably optimistic about the results of talks between
the two leaders.
    Top U.S. and Japanese officials have shuttled back and
forth across the Pacific to lay the groundwork for Nakasone's
visit. The last of the talks leading up to the main event will
be in Washington next Wednesday between U.S. Secretary of State
George Shultz and Foreign Minister Tadashi Kuranari.
    Nakasone will have an economic package worked out by the
ruling Liberal Democratic Party (LDP) and by an advisory body
led by former Bank of Japan Governor Haruo Maekawa.
    Japan plans to spend over 5,000 billion yen to boost
domestic demand, increase imports of U.S. products including
supercomputers and give more help to developing countries,
government officials said.
    The government has been making last ditch efforts in time
for Nakasone's trip to address outstanding bilateral issues,
officials said.
    The issues include foreign access to a new Japanese
overseas telecommunications venture and a six billion dlr
international airport project in western Japan.
    Nakasone and his party last week reached a compromise
accord with opposition parties over a controversial sales tax
plan in exchange for parliamentary passage by the Lower House
of a government draft budget for 1987/88.
    The accord, offered by House Speaker Kenzaburo Hara,
virtually killed the Nakasone-sponsored plan, but left room for
future tax reform plans, political analysts said.
    Nakasone, who led his party to a resounding electoral
triumph last July, saw his popularity drop because of the sales
tax.
    His party suffered setbacks in an Upper House by-election
and nationwide local elections in the past two months.
    Mitsuru Uchida, professor of political science at Waseda
University, told Reuters: "I doubt that whatever Nakasone does
in Washington -- no matter how good it might be -- would help
restore his weakened power-base at home."
    Many analysts said Nakasone might step down after the
Venice summit of industrialized nations in June.
 Reuter
