Open market or else, Japan told

DAVID USBORNE

New York

With more than half an eye on his popularity rating at home, President Bill Clinton yesterday served notice that he would not flinch from imposing tariffs against Japan in the car-parts dispute if a last-minute deal was not struck in Geneva.

It was clear throughout yesterday that the US administration was gearing up to make maximum political capital out of the conclusion of the Geneva talks, whatever their conclusion. Surveys show the President's tough stand with Japan is playing well with American voters, and there was no mistaking his determination yesterday.

He told an economic conference in Portland, Oregon: "I am not trying to launch a new era of protectionism, but we have tried now for two or three decades to open this market and this is the last major block to developing a sensible global economic policy."

With the prospect that the tariffs might be applied within hours, he said: "I hope I won't have to do it. I have worked with Japan to avoid this kind of problem. But decades of American presidents have tried and failed to open this market."

"The bottom line is we want to open the markets for American products, and we will take action if necessary in the form of sanctions," he said.

The imposition of tariffs, retrospective to mid-May, would however spell disaster for dealers in the US selling the Japanese models, including Lexus and Infiniti and the more expensive models offered by Honda and Mitsubishi.

With their models expected almost to double in price, many dealers could be forced out of business quickly.

As Mr Clinton addressed the Portland conference, workers from Japanese car dealers and distributors demonstrated outside, waving placards proclaiming that, if effected, the tariff proposals would threaten 14,000 US jobs.

The measure could, however open the door for a boom for European luxury car manufacturers, particulary Jaguar, BMW and Mercedes, which will scramble to fill the void left by the Japanese.

In the meantime, Chrysler announced yesterday that it was spending $100m to buy out a car distributor in Tokyo as a means to boost sales of its cars and recreational vehicles in Japan. Chrysler said it was taking control of Seibu Motor Sales.

Chrysler Japan Sales.