Lyng Warns U.S. Trade Situation is Explosive (rpt)

U.S. Agriculture Secretary Richard Lyng said Japanese government officials do not seem to understand that protectionist sentiment in the U.S. Could lead to an explosive situation and protectionist legislation.

Speaking to the National Press Club of Japan, Lyng said protectionist sentiment in the U.S. Has increased alarmingly during the last six months.

“It is a radically changed situation and is very explosive. We are on the verge of some very harsh mandatory retaliatory laws which would have very serious consequences for other countries, especially Japan,” Lyng told reporters.

Lyng’s comments about protectionist trade legislation appeared to be a reference to the so-called Gephardt provision, requiring retaliation against countries which have trade surpluses with the U.S., Trade analysts said.

U.S. House majority leader Thomas Foley, a Washington Democrat, yesterday predicted during a visit here that the Gephardt provision will be approved by the House when trade legislation is taken up later this month.

Senior Japanese officials do not seem to perceive the volatility of the situation in the U.S., Where Congress is increasingly unpredictable, he said.

“The purpose of this trip is to emphasise the fact that patience is beginning to be very much frayed in Washington. I cannot emphasise that enough,” Lyng said.

In talks with Japanese Agriculture Minister Mutsuki Kato yesterday, Lyng and Trade representative Clayton Yeutter asked Japan to begin negotiations on its rice policy and end import quotas on beef and citrus.

Lyng said he was disappointed Kato rejected the U.S. Request but hoped it would not lead to a protectionist response in Congress, where legislation on rice retaliation has been introduced in both the House and Senate.

Lyng said the U.S. Is dependent on Japan as a market for exports because Japan has been the largest buyer of U.S. Farm products since 1964, especially grains.

He said the U.S. Understands Japan, with a limited land area, is concerned about maintaining some level of self-sufficiency in food for national security reasons.

But he argued the freeing of farm product imports would not necessarily weaken Japanese agriculture.

Lyng pledged the U.S. Will never again embargo shipments of farm products as it did in 1973.