The example OverViews speech was prepared for Elliott Hall, vice president, government affairs, Ford Motor Company. Delivered before the Automotive News World Congress. 

One-Way Trade With Japan

This is early in the day for a speech, so I promise to be brief... no matter how long it takes.

"Promise," of course, is the operative word. Before I came to Washington seven years ago, I figured Nikita Khrushchev had a point when he said: "Politicians are the same the world over. They promise to build bridges even where there are no rivers."

Yet in Washington today, bridges are being built over the Potomac. And promises are being kept. The Clinton Administration is bridging the gap between government and American industry for the first time in decades.

Cooperation, from shirt-sleeves summits with industry leaders to working-level dialogues on a daily basis, are now the norm. And by dialogue, I don't mean the traditional Washington dialogue which consists of two or more monologues.

Automotive-government dialogues today are many and meaningful.

The National Economic Council's automotive work groups are outstanding examples of genuine dialogue.

And an invigorated Office of Science and Technology Policy, and the Federal Coordinating Council on Science, Engineering and Technology, have industry and government technologists in dialogues not heard in peace-time history.

In world trade, as in Washington right now, there is new promise.

The cold war has ended... In the Middle East, more words than bullets are flying.

NAFTA in North America... and GATT everywhere... promise to increase the benefits of free and open trade to more people, in more places, than ever before.

Yet there is one overwhelming challenge to American free trade that threatens to negate all other promising signs.

That one issue, of course, is the U.S. trade deficit. And one trading partner -- Japan -- accounts for the lion's share of the trade deficit.

Japan's trade imbalance with the rest of the world is enormous -- 642 billion dollars from 1983 through 1992.

Some 444 billion of that, about 69 percent of the total, is with the United States alone.

And based on the latest available trade statistics, it looks like the deficit with Japan will reach an all-time high this year of 57 billion dollars.

For more than 30 years now, Japan has been promising to open an avenue of free trade with America and the world.

Yet so far, traffic has been all one-way. Japan has taken full advantage of the wide-open American market, yet kept its shores closed to competitive trade.

Just look at the global realities. In every industrialized nation automotive imports account for 35 to 50 percent of each market.

Through blatant trade bans and non-tariff barriers of all kinds, they've kept vehicle imports to Japan down to just three percent.

Three percent includes all imports from North America, Europe, and Asia combined. Three percent compared to 35 percent or more where open trade exists.

At Ford, we know the reality of Japan's closed door policies.

For Ford has been in Japan longer, and has arguably struggled harder in recent years, than anyone else to achieve a market presence there.

Ford's Asian headquarters is located in Tokyo, as is our research and development center for all of Asia-Pacific.

In Hiroshima, more than 20 Ford divisions have ongoing development efforts with our partner Mazda, and with other Japanese companies.

And Ford has Autorama, a joint distribution partnership with Mazda to sell vehicles throughout Japan.

With a hundred dealers and more than 300 sales outlets, this gives Ford the most extensive dealership network of any foreign manufacturer in Japan.

Yet with all of this, Ford sells about 26 percent of all foreign nameplate vehicles in Japan.

With all of this, Ford is the best-selling non-Japanese automotive name in that market.

Yet with all of this -- that's not saying much.

For despite our best efforts to penetrate this closed-market, Ford sells only about 3,000 vehicles a year in Japan.

 Japanese certification procedures and non-tariff barriers add costs and delays -- forcing us to sell our cars above the domestic market's prices.

And Japanese manufacturer pressure bars access to Japan's domestic dealerships.

So ask any of the three hundred Ford people and their families who live and work in Japan.

They'll tell you Ford is working hard to become a fully- integrated participant in the Japanese market.

And they'll tell you the barriers to doing so are real, and at present realistically insurmountable.

On the broader picture, what does Japan's protectionism mean to America?

First, there can be no healthy trade when one partner puts up barriers. As Peter Drucker says, "Reciprocity -- where each country enjoys the same access to the other country's market and no more -- is the only trading relationship that avoids protectionism.

"Reciprocity is no longer an option. It is essential to a stable, and sustainable, global economy."

Second, the long-term effect of a permanent trade deficit is to undermine America's manufacturing base... to drain resources, and severely restrict critical reinvestment.

Third, that means American jobs are lost. The $ 57 billion trade deficit with Japan last year can be directly translated into tens of thousands of jobs that they have and we don't have.

And while Japan is spending hundreds of millions of dollars on advertising to convince the American public and our politicians that their transplants are "all American," don't you believe it.

The truth is that 50 percent or more of all parts in Japan's American-assembled cars have "made in Japan" inconspicuously stamped on them.

Japan's decade-long advertising blitz impresses no one who knows the facts. As Lane Kirkland, President of the AFL-CIO, said back in 1985: "To hear the Japanese plead for free trade is like hearing the word "love" on the lips of a harlot."

So what can we do to hold Japan to its promises of opening up to free trade?

Once again, the Clinton Administration is moving in the right direction. President Clinton says that his trade policy is going to be based not on vague promises, but on tangible results.

Last summer, the Japanese government agreed to establish a framework of negotiations to reduce the trade deficit.

One month from today, on February 11th, President Clinton and Prime Minister Hosokawa will meet in Washington to discuss the framework.

February 11th, incidently, is a significant day for Japan. It's National Foundation Day, commemorating the establishment of Japan as a nation in 1872.  Their Independence Day.

This year February 11th is an equally important day for America. For the Clinton-Hosokawa talk may have profound and long-lasting impact on the American economy, on jobs, and on America's global competitiveness.

Frankly, while the auto industry applauds the talks as a sincere effort by the Clinton Administration to address the trade deficit, experience has taught us to "moon walk" -- proceed with caution.

Any trade agreement, to be meaningful, needs to provide measurable, quantifiable, results.

It ought to provide access to Japan's domestic dealers... access to vehicle owner data as we have in America...

It should offer dramatic reduction of certification requirements and land office inspections that restricts U.S. sales in Japan. 

Restrictions that do not exist on Japanese products sold here.

Any agreement that doesn't allow American auto makers to at least double sales over the next three years, isn't an agreement at all.

The U.S. auto industry is geared up to double sales in Japan, and to do more... much more.

Are we hopeful?  Well, to be honest, our optimism is about like that of a man contemplating a second marriage -- a triumph of hope over experience.

Experience has taught us that Japan's protectionist tendencies are tenacious. And given Japan's current economic downturn, protectionist sentiments in that country remain high.

We've learned the hard way that the Japanese word for "yes" does not literally mean "yes" but "maybe."

America has had 30 years of Japanese free-trade promises... 30 years of yeses that meant maybe and ultimately translate to a resounding "no."

Make no mistake, the American auto industry would much rather have no agreement than a weak agreement.

That's right -- no agreement is better than a weak agreement.

A weak agreement will serve only to take Japan's trade deficit out of the harsh light of national attention. It would, once again, take the spotlight off of Japan and allow it to continue protectionist policies unabated.

There are times when the right thing to do... the only worthwhile thing to do... is to  refuse to negotiate.

Let me explain that with a lesson from recent history.

America won the cold war. We won it not by bargaining away our strength, but by standing firm on what we believed was right and equitable.

At the height of the cold war, President John F. Kennedy stood at the Berlin Wall. President Kennedy said, and I quote: "We cannot negotiate with those who say, `What is mine is mine and what is yours is negotiable.'"

The cold war has been replaced with heated global competition...  global competition that has many characteristics of warfare -- including casualties in the form of jobs lost... industries undermined... and entire national economies sacked.

At Ford, and I believe throughout the U.S. auto industry, we welcome global competition.
 

Yet we can not compete with a trading partner that keeps its doors closed and barred to the world.

And we can not negotiate with those who say: "What is mine is mine, and what is yours is negotiable."

So to the engineers and managers in this audience, I ask that you contact your Washington representatives, and you urge them to support the President's "results-oriented" negotiations on February 11th.

To President Clinton, I urge you to settle for nothing less than guarantees of short term progress toward long-term trade equity... that no agreement is better than a hollow agreement.

And to Japan as it approaches its 122 birthday, I can only say that our economic relationship, while strained, is deep and valued.

It is time to tear down the barrier that has resulted in one-way trade. For in the long term, one-sided trade is not sustainable, and will not prove beneficial to your economy, nor to your people.

I am told that in Japan's Shinto teachings, there is an expression: "The hand is mightier than the mouth." Which is the counterpart to the American idiom, "Actions speak louder than words."

Now is the time for action. The time for promises is over.

The promise of a better future requires that Japan take action now.  I can only repeat the words of my good friend Senator John Danforth, when he spoke as Chairman of the U.S. Senate Subcommittee on trade in 1986.  John said: "Japan is a great nation.  It should begin to act like one." 

We believe Japan is a great nation. On February 11th, it is time to insist Japan live up to its promise of greatness.

Thank you.