Robert Hawkins, dean of Georgia Tech’s Ivan Allen College of Management Policy and International Affairs, warned at a conference Wednesday, Feb. 22 in Atlanta that U.S.-Japanese relations could take a sudden turn for the worse should the U.S. trade deficit of $65.7 billion with Japan not be narrowed significantly in the near future.

He predicted that three different policies currently apply to dealing with the deficit, including Japan’s opening its markets to a broader range of U.S. goods.

If Japan does not open its markets, he said that either the U.S. will have to impose restrictions to limit the entry of Japanese goods into the U.S., or a major currency adjustment will take place making Japanese goods more expensive for Americans.  “Only the first of these three alternatives is not destructive,” Dr. Hawkins said referring to improved market access.

Judging from comments of Philip R. Agress, director of the Office of Japan Trade Policy at the U.S. Department of Commerce, who also spoke at the conference sponsored by Georgia Tech’s Center for International Business and the Georgia Department of Industry, Trade and Tourism, there is no indication that Japanese policy is apt to turn around any time soon.

Mr. Agress did point to openings for some U.S. companies through recent negotiations including new opportunities for telecommunications companies and financial and insurance services.

At the same time, however, he referred to what he called “crazy” Japanese policies which have blocked the entry of U.S. hair products on grounds that Japanese scalps are different from those of Americans.

 Japan also has kept out skis because Japanese snow is different from that which falls elsewhere, he said, and it has kept out earthmoving equipment because Japanese dirt is different.

 But such “craziness” should not keep U.S. companies from trying to penetrate the Japanese market, he added.

Mr. Agress may be reached by calling (202) 482-1820; fax (202) 482-0469.