Japanese Prime Minister Takes on Import Quotas, Taxes : Practical Issues Test Mettle of Takeshita

By SAM JAMESON

July 10, 1988 12 AM PT

Times Staff Writer

TOKYO — When Prime Minister Noboru Takeshita took office last November, supporters insisted that his well-known lack of political philosophy, policy-making ability and diplomatic experience would be no handicap.

The U.S. government, eager to make friends with the new leader, declared that what was needed most in Japan was not a thinker, like former Prime Minister Yasuhiro Nakasone, but a doer, like Takeshita.

The eight months that have passed have shown that advance billing to be accurate so far.

Master of Consensus Politics

In the only test of his mettle that called for a moral or philosophical stand, Takeshita, a reputed master of consensus politics, chose to avoid both. After one of his Cabinet ministers said that Japan’s 1931-1945 conflict with China was aimed at thwarting “white man’s colonialism” in Asia and lacked aggressive intent, Takeshita was asked in Parliament whether he thought Japan had committed aggression in World War II.

He said only that foreign nations consider Japan to have been an aggressor, “and the Japanese government is forced to take that view into consideration.” Pressed again six weeks later, he said, “I myself have never engaged in a debate as to whether this or that act of Japan constituted aggression or not.”

Such waffling is so typical of Takeshita that when Eishiro Saito, chairman of Keidanren, the Federation of Economic Organizations, was criticized recently, Isao Nakauchi, chairman of the Daiei Corp., offered this defense of his business colleague: “As you can see by looking at Prime Minister Takeshita, this is an era in which there are no leaders with fixed convictions. There’s no point in attacking just Saito.”

Pulled Off a Coup

Yet last month, Takeshita pulled off his biggest coup to date by prodding his Agricultural Ministry into overriding protests from Japan’s politically powerful farmers and hammering out an accord with the United States to lift Japan’s import quotas on beef and oranges by March 31, 1991. It was a move that the flamboyant Nakasone never dared to consider in five years as prime minister.

If Takeshita can pass his next, and biggest, test--pushing a controversial overhaul of Japan’s tax system through Parliament, a task that is expected to take up the rest of the year--he may emerge as one of the most effective prime ministers in Japan’s history.

As Takeshita pointed out with obvious pride, the beef and citrus agreement wiped the slate clean of all the issues that President Reagan brought up with him when he visited Washington in January.

The other issues were resolved by an agreement to permit U.S. construction and engineering firms to bid for contracts in the Japanese market and an agreement on science and technology that provides for a greater flow of information from Japan and better Japanese protection of potential military secrets.

Removed Bottleneck

Before the January meeting, Takeshita removed a legalistic bottleneck--Nakasone had been unwilling to touch it--to raising Japan’s contribution to the cost of maintaining 55,000 U.S. troops here, and he settled a long-running dispute with the United States about 12 other Japanese agricultural import quotas.

Although a bilateral trade imbalance that reached $59.8 billion last year promises to sustain friction between the two countries, for the first time in two decades there is no major economic issue pending in U.S.-Japan relations.

Last month at the Toronto economic summit of seven industrialized nations, Reagan expressed thanks or appreciation eight times in a 20-minute private meeting with Takeshita, Japanese diplomats reported.

For Takeshita, the beef-citrus agreement meant far more than just settling another dispute in U.S.-Japan relations. Nothing less than sweeping reform of Japan’s entire agricultural structure looms before him as a result.

“Through this agreement, it has become clear there is no turning back from agricultural liberalization,” the newspaper Asahi commented in an editorial.

The accord also showed that Takeshita is a man of his word.

Speaking of agricultural imports at his first press conference after assuming office, Takeshita declared that “under the philosophy of free trade, the people who have received the greatest benefit of all are the Japanese people. . . . As a result, it is only natural that we enforce an open structure.”

Takeshita followed up the beef-citrus agreement by forcing through a cut--for the second year in a row--in the prices the government pays to support rice that it buys from farmers.

Cynics likened Takeshita’s overseas ventures to a “steering bills through Parliament kind of diplomacy,” lacking vision and philosophy. Prof. Toru Yano of Kyoto University, writing in the Japan Times, labeled Takeshita’s diplomacy “unassuming artlessness.”

‘Thinks in Japanese Terms’

The prime minister, he wrote, “is himself a typical Japanese who tends to think in purely Japanese terms, quite unaware of the need to transcend the Japanese frame of mind. . . . Simple-mindedness has its advantages, of course, but also its shortcomings.”

Although Takeshita already has visited the United States three times and Canada and Britain twice, has traveled to the Philippines, South Korea, Italy, West Germany, France, Belgium, the Netherlands and Australia, and plans a trip to China in August, Yano dismissed Takeshita’s tours as little more than “get-acquainted” visits with foreign leaders.

“What is needed is a world outlook, a sense of strategy, a vision of the future for humanity,” he wrote. “Regrettably, Takeshita has yet to show he possesses any of these vital attributes.”

Takeshita has not made much impact on his foreign trips. His foreign speeches have been limited largely to sloganeering--most of all, a pledge to make Japan “a nation that contributes to the world,” with the contents to be provided later, perhaps.

Takeshita, 64, makes no pretense of being an orator. He describes himself as “a man of few words,” and many of them have put audiences at home and abroad to sleep.

“I know that people say of me, ‘His words are clear, his meaning unclear,’ ” he confessed in a recent speech.

The one item on which Takeshita has come up with specifics--foreign aid--offers less than meets the eye. Although he pledged to double aid between now and 1992, only a comparison of the promised five-year, $50-billion package with the amount over the last five years produces a doubling. Japan already has budgeted this year 1.35 trillion yen ($10.8 billion) in official development assistance, or more than the annual average of $10 billion a year in the new five-year pledge.

Takeshita’s announcement at the Toronto summit of a plan to wipe out $5.5 billion owed to Japan by the world’s poorest countries was part of the “aid doubling” plan.

World’s Top Donor

Despite the puffery in the aid doubling pledge, it confirmed that Japan will surpass the United States as the world’s top donor. And a proposal at the Toronto conference by Finance Minister Kiichi Miyazawa to alleviate the debts of middle-level developing countries was the first time that Japan had offered an initiative for a major world financial reform since the end of World War II.

Revelations that his secretary and 75 other people linked to top political and business leaders had engaged in a legal but ethically questionable stock profiteering scheme handed Takeshita his first personal setback in early July. The disclosures also threatened to make even more difficult the enactment of a sweeping reform of Japan’s tax system, including imposition of a new 3% consumption tax, for which Takeshita will call a special session of Parliament soon.

A similar proposal by Nakasone was rejected last year, handing him his biggest defeat.

The stock profiteering scheme underscored the fact that the rich will still be getting special treatment under a proposal in the reforms to impose capital gains taxes on individual stock investors for the first time--but allow them to pay taxes on profits separately from other income.

Failure to enact the consumption tax, which officials say is needed to finance welfare costs rising as a result of the rapid aging of Japanese society, could force Takeshita into an early retirement as prime minister.

And, if tax troubles aren’t enough, Takeshita also has promised to combat the crazed speculation that has raised land and housing prices in urban areas beyond the reach of ordinary wage earners.

Now, the alleged novice in diplomacy, who has scored his biggest victories to date in foreign affairs, will face his biggest challenges at home.