Japanese Agent Man

Agents of Influence, by Pat Choate, New York: Alfred A. Knopf, 295 pages, $22.95

In Agents of Influence, Pat Choate adds an embellishment to the Japanophobia that characterizes so much of current protectionist rhetoric. The Japanese are no longer just destroying our economy; now, as a means to that goal, they are subverting the integrity of our political system as well. The book points fingers and names names, and as a result it has stirred up a fair amount of controversy. But like most conspiracy theories, Choate's thesis doesn't hold up under scrutiny.

Choate was until recently a policy analyst at TRW and is a longtime advocate of protectionist policies. He claims that the Japanese now spend $400 million a year in this country on lawyers, lobbyists, and public relations, manipulating political processes and public opinion to favor Japanese over American economic interests. This massive infiltration campaign, says Choate, "threatens our national sovereignty."

But the villains in this book aren't so much the Japanese themselves, who after all merely play the American game of influence buying as they find it. The real bad guys are the American "agents of influence" who choose to represent Japanese interests. Choate heaps particular scorn on former U.S. officials who now argue the free-trade position for Japanese and other foreign clients and "have supported the progressive cheapening—even the fundamental corruption—of the value of national service that used to guide the conduct of our public life."

In the first place, Choate completely mischaracterizes the nature and effectiveness of Japanese influence. He gives the impression that the 1980s were a time when the United States, under the spell of foreign-paid lobbyists, tore down its trade barriers, while meekly refusing to criticize the protectionist policies of Japan and other trading partners.

In fact, precisely the opposite occurred. The last decade marked a sharp increase in U.S. protectionism, as well as a growing intolerance of obstacles that hindered U.S. exports to other countries' markets. From 1980 to 1988, the percentage of imports into the United States subject to substantial trade restrictions rose from 12 percent to 23 percent. Washington aimed many of these restrictions specifically at Japan. During the '80s, the United States forced Japan into imposing export limits on automobiles, steel, and machine tools. Over the same period, the United States also levied special "anti-dumping" duties on dozens of different Japanese products. In addition, the threat of anti-dumping liability forced price increases on an untold number of other Japanese goods.

At the same time, the United States hammered away relentlessly at real and perceived market barriers in the Japanese economy. Most notably, Washington named Japan an "unfair trader" under "Super 301" and threatened it with sanctions unless it removed trade barriers on supercomputers, satellites, and forest products. As an adjunct to the Super 301 process, the United States and Japan held shotgun negotiations pursuant to the so-called Structural Impediments Initiative. In these talks the United States called for changes in such purely domestic policies as antitrust enforcement, public works spending, and regulation of the distribution system, on the ground that these policies indirectly impeded U.S. exports. This subjection to Super 301 is a telling comment on the relative clout of Japanese influence. The European Community, with which the United States has as many trade disputes as it does with Japan, escaped targeting under Super 301, simply because the E.C. never would have tolerated such browbeating.

The truth, then, is that the Japanese presence in American politics has been essentially a defensive one, aimed at countering the move toward greater protectionism. There have been a few tactical successes in this effort, but the general pattern has been one of steady reverses.

All of this raises a deeper objection to Choate's thesis: namely, that the Japanese political presence, considered on the whole, has been beneficial rather than harmful. For the United States to maintain open markets helps Japanese and other foreign exporters, to be sure. But more important, it helps American consumers by giving them the freedom to buy the best products at the best prices; it also helps American industry by promoting greater productivity and efficiency under the spur of foreign competition. On matters of trade policy, then, there is a congruence between foreign "special interests" and America's long-term general interest.

Until recently, there was very little organized private lobbying in favor of free trade. The main identifiable beneficiaries of open markets—consumers—are far too dispersed to make an effective lobbying force. Free trade has therefore had to depend on ideology and foreign-policy concerns for its support. By contrast, those who stand to gain from high import barriers—industries facing foreign competition—know who they are and can easily organize to apply concerted political pressure. Accordingly, in the game of insider politics, the protectionists have long held the advantage. The results can be seen in our trade policies on agriculture, textiles, and steel, where powerful domestic lobbies have succeeded in exempting themselves from the laws of the marketplace, beggaring the rest of the country for their own private benefit.

But the rise of foreign lobbies has helped to counteract this built-in bias. Furthermore, a growing portion of U.S. industry depends on foreign sources for components and materials and therefore has a vested interest in open markets. Thus, foreign producers and downstream U.S. industries, as well as American importers and retailers, now form a coalition of interests with sufficient political resources to at least challenge the cozy entrenchment of the protectionist lobby.

John Stuart Mill once noted that "a good cause seldom triumphs unless someone's interest is bound up in it." The good cause of free trade, always befriended by economists, is at last attracting some support with political muscle.

The trench warfare of special-interest lobbying is admittedly an ugly sight, whether the checks to pay for it are cut here or in Japan. The current system is riddled with abuses—in particular, the "revolving door" between public service and private lobbying. But these problems aren't confined to foreign lobbying; they apply also to domestic special interests and on a much larger scale. To single out the "Japan Lobby," as Choate does, is to engage in invidiously selective indignation.

There is a very simple solution to any problems caused by foreign influence over trade policy. All we need to do is tear down the many barriers that still hinder access to our markets and stop spoiling for a trade war with other countries. The "Japan Lobby" would close shop overnight.

Brink Lindsey is an attorney specializing in international trade regulation with Willkie Farr & Gallagher in Washington, D.C.