Lots of Smiles but Few Sales

Americans find barriers still high in the land of the rising yen

Because they flood the U.S. with everything from Sony TVs to nimble Kawasaki cycles and buy so little in return, the Japanese alone account for 40% of the nation's appalling trade deficit, which this year will rocket to a record $33 billion. In response to repeated American pleas for easier access to markets in the land of Hitachi and Datsun, the Japanese reply reproachfully: "But we are ready and eager to buy your goods. It is your fault for making no effort to sell to us." Last week a group of 100 U.S. businessmen, headed by Texas Instruments Chairman Mark Shepherd and accompanied by Commerce Secretary Juanita Kreps and Assistant Secretary Frank A. Weil, arrived for a 15-day tour of Japan to put those oft-stated intentions to a test.

Aware of the public relations value of the visit, the Japanese gave a royal welcome to the Americans, whose trip was paid for entirely by Washington. Premier Takeo Fukuda popped in at two receptions in Tokyo and even conversed with Kreps and others in English, a language he almost never uses in public. Japan's aggressive MITI (Ministry of International Trade) and the big trading houses had arranged for the visitors more than 3,000 interviews with potential buyers, and a few sales had been prudently lined up ahead of time. When Mrs. Kreps criticized Japan's reluctance to import, her hosts smiled and politely applauded.

Yet after the first week, most of the visiting Americans were discouraged. Declared Warren Lind, a DuPont executive: "At the top, the Japanese seem committed to opening their market. But when the fellow down the line actually makes the decision, the tendency is still to 'buy national.' "

The Americans represented large multinationals, such as Teledyne and General Motors, as well as small firms like RH Packaging of Clearwater, Fla. RH's president, Ron Hume, claims he has invented a machine that packages liquids like yogurt and orange juice at one-third the operating cost of comparable Japanese equipment. So far Hume has found no takers. DuPont's Lind joined the tour only because DuPont last year managed to push through import approval for its new blood analyzers in the remarkably short period of four months (vs. the usual nine to 18 months waiting time); DuPont has already sold 20 of the devices at $150,000 each to the nationalized hospitals. Lind hoped to line up appointments with government decision makers who could give the go-ahead for further purchases. After a number of appointments, he was hopeful the Japanese would place more orders.

After taking his place in a sales booth in the permanent U.S. trade center in Tokyo, Robert Yardley, a sales executive with the middle-size Warwick, R.I., toolmaking firm Leesona Corp., was puzzled by two Japanese who came and stood at his display but had no interest whatsoever in the machinery. When Yardley inquired why they had come, one of the men pulled out a letter and said, "We are only here for this reason." The letter, Yardley deduced, was from one of the big trading companies, which had ordered his smaller firm to put in an appearance at the display in order to meet the promised quota of contacts.

For Gerhard Neumaier, president of Buffalo's Ecology and Environment, Inc., participation in the mission was a last desperate attempt to break into a market that for four years had rebuffed him. A specialist in analyzing the environmental ramifications of projects ranging from dams to industrial parks, Neumaier in 1974 founded a Japanese subsidiary and spent $500,000 in a futile search for contracts. Says he: "We wouldn't have stayed all this time if we hadn't been encouraged by government bureaucrats who said, 'Be patient, you'll eventually succeed.' " Fed up with meaningless reassurances, Neumaier braced Hiroo Takizawa, the MITI environmental guidance director. Takizawa conceded that Japan intended to protect its own. Said he: "The Japanese government believes that it is very important to nourish Japan's knowledge and technology industries and has been trying to develop its own think tanks." From now on, Neumaier intends to concentrate on expanding his business in Latin America.

One last try was also the reason Joseph V. Scott of Chicago's Echlin Manufacturing Co. made the trip. In the late '60s, Scott's company tried and failed to set up a joint venture with a Japanese automaker to supply spare parts for autos exported to the U.S. As a member of the group, Scott will have the opportunity this week to make new pitches. Because of the interlocking ownerships within Japanese industry, he is not optimistic. "I am going to talk to Toyota about replacement parts," he says, "but I know that Toyota owns a portion of the company that provides its ignition systems and lots of other parts."

The Japanese government had warned the Americans not to expect quick results. Yet the very fact that the mission was invited to Japan raised hopes that the barriers of high tariffs, endless import-icense red tape and discriminatory quotas were being lowered. The experience of the U.S. visitors was sobering. Quick fix trade deals like the one negotiated last January between the U.S. and Japan and whirlwind tours of businessmen are no way to solve the critical imbalances in world trade caused by Japan's insatiable urge to export and parsimonious reluctance to import. In fact, such cosmetic exercises only give the illusion that something is being done and delay the looming showdown when Japan is finally forced to realize that it cannot indefinitely disrupt the balance of trade in the world without itself suffering the consequences of the disorders that are bound to follow.

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