Japan's PM to face the music in Washington

Click to follow
AS Morihiro Hosokawa, Japan's Prime Minister, arrives in Washington for talks with President Bill Clinton today, the main question the White House is seeking to answer is: is this the man who will finally change Japan? And if he is not, whose is the hand holding the magic wand that would open Japan's markets, break the power of the bureaucrats and overhaul its corrupt political system?

When Mr Hosokawa became prime minister last August, ending 38 years of unbroken rule by the Liberal Democratic Party (LDP), he vowed to revolutionise Japan. He proposed to start a process of deregulation and reform that would give the Japanese a higher standard of living by shifting the institutional bias away from big exporting corporations to the long-suffering consumer. He would attack the collusive triangle of power linking bureaucrats, corrupt politicians and big business, forcing Japan to drop many invisible barriers to imports that have infuriated foreigners.

Mr Hosokawa called his programme the 'third opening of Japan', following the opening of the country to foreign ships in the 19th century, and the post-war opening by the US occupation authorities. Only this time, the opening would come from within, not as a result of pressure from without.

In Washington's eyes, the change of government was timely. After 28 consecutive years of suffering a trade deficit with Japan, the new US administration was fretting for change. The 1993 deficit with Japan was heading for dollars 50bn ( pounds 33bn). The hitherto all-important US-Japan Security Treaty was no longer so crucial now the Soviet threat in the Far East had disappeared. Washington had seen innumerable plans to open Japan's economy in the past defeated by wily Japanese bureaucrats - and admittedly lazy US exporters - and wanted to see a fundamental shift in the way Japan was run, from a narrowly focused, export-oriented economy to a mature consumer-conscious society.

With the split of the LDP and the sudden rise of Mr Hosokawa, it seemed as if US dreams were coming true. Like Mr Clinton, Mr Ho sokawa was from a younger generation, talked about internal change and 'enfranchising ordinary people', and seemed to have wrenched himself free of corrupt vested interests that had dominated LDP politics for four decades. He had the backing of several politicians, including Ichiro Ozawa, who were well known in Washington as reformers. The consensus in the White House was to go easy on the trade issue while Mr Hosokawa was establishing his new government.

Six months later, the US administration is having second thoughts. Mr Hosokawa, far from leading a triumphant crusade for change, has stumbled from one political crisis to the next, apparently more interested in saving his job than pushing his reform policies. And far from distancing himself from the bureaucrats and the hated LDP, he has found himself doing deals with both to pass legislation that has been opposed by the Socialists and other intransigent members of his seven-party coalition.

In Japan, too, disillusionment is starting to set in. Mr Hosokawa's popularity rating - which his aides say he follows avidly and which had been averaging 70 per cent - is down to 52 per cent, after last week's bungling over tax reform when the Prime Minister showed himself as lacking resolve and being without a command of the real issues. The government finally gave in to the Socialists over the tax issue in a deal which even the normally unflappable Mr Ozawa described as 'unconditional surrender'.

Will Washington decide to give up on Mr Hosokawa, haul him over the coals about lack of progress in the trade talks, then toss him to the sharks circling in Tokyo's political waters? Will President Clinton fulfil Mr Hosokawa's nightmare by making him lose face in front of the US and Japanese public?

The answer is probably not, if only because there is no one better in sight. There is no magic hand that can suddenly change Japan to conform to the US design. And although Mr Hosokawa is weak and compromised, he is achieving something: a half-hearted beginning to political reform, and a commitment to open up government procurement policies. And below the surface Japan is changing, albeit more slowly than its trading partners would like. But the Washington summit will not be the trouble-free photo opportunity that Mr Hosokawa might have wanted.