Japan starts work on market-opening plan

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The Independent Online
MORIHIRO HOSOKAWA, the Japanese Prime Minister, and nine cabinet ministers agreed yesterday to devise a market-opening package in an effort to avoid a confrontation with the US at a Group of Seven meeting today.

Japanese officials say the government hopes to complete the plan, to include deregulation of the distribution system, promotion of imports and investment, and improved government procurement rules, by the end of March.

Tsutomu Hata, the Foreign Minister, suggested that Japan might offer Washington a non-binding goal of cutting its current account surplus to 2.8 per cent of national output from about 3.3 per cent in 1993.

Observers are sceptical that this new Japanese drive to appease the US and prevent trade sanctions by Washington will produce results. The US continues to press for binding targets on import penetration of specific sectors of the Japanese economy.

At a meeting of G7 finance ministers in Kronberg, near Frankfurt, today, Lloyd Bentsen, the US Treasury Secretary, is set to press his Japanese counterpart, Hirohisa Fujii, for details on how the latest pounds 95bn pump- priming package will take effect. US officials are sceptical about the value of the package, pointing to the minimal impact of earlier plans they believe were never fully enacted.

The US trade deficit with Japan last year was almost dollars 60bn ( pounds 42bn).