The MacNeil/Lehrer NewsHour

MS. FARNSWORTH: Good evening. I'm Elizabeth Farnsworth in New York.

MR. LEHRER: And I'm Jim Lehrer in Washington. After our summary of the news this Wednesday, we have full coverage of and reaction to the last-minute trade deal between the United States and Japan, Rod Minott reports on using marijuana as medicine, and essayist Anne Taylor considers cyberspace. NEWS SUMMARY

MS. FARNSWORTH: The United States and Japan reached a trade agreement today, just 12 hours before the U.S. had planned to impose billions of dollars in sanctions on Japanese cars. Japan is expected to take measures which will increase Japanese purchases of auto parts by 50 percent in the next three years and to open 1,000 new Japanese dealerships for American cars within five years. The agreement was negotiated by U.S. Trade Rep. Mickey Kantor and Japanese Trade Minister Ryutaro Hashimoto. The trade minister said Japan made the concessions because the U.S. was no longer insisting on specific numerical targets to gauge Japanese compliance. Just before the deal was announced, Japan's leading automakers revealed plans to increase car production in the United States and to buy more U.S. auto parts. President Clinton called today's development a major step toward free trade throughout the world. He spoke at the White House.

PRESIDENT CLINTON: Today, Japan has agreed that it will begin to truly open its auto and auto parts markets to American companies. This agreement is specific. It is measurable. It will achieve real, concrete results. And I have insisted on it from the start. I want all of you to understand that there is still much to be done. This agreement will not solve every problem in our relationship, but for today, we have proof that hard bargaining and good faith can overcome apparently insurmountable conflict.

MS. FARNSWORTH: On Capitol Hill, leaders of both parties welcomed the agreement but also expressed reservations.

SEN. ROBERT DOLE, Majority Leader: It appears on the surface to be a step in the right direction. They've made a number of assurances, the Japanese. I think the bottom line, as always, is if the agreement's carried out, but if it is, I think it would be a step in the right direction.

REP. RICHARD GEPHARDT, Minority Leader: Ultimately, we must begin to measure our success not by the number of agreements we sign but by the jobs and opportunity we create for our businesses and workers. Even though today's agreement does not require these kinds of benchmarks, the Japanese government must understand that the Congress and the American people we represent will be measuring and demanding real progress every step of the way.

MS. FARNSWORTH: We'll have much more on this story right after the News Summary. Jim.

MR. LEHRER: Bosnia's Serbs launched several attacks in Sarajevo today. At least five people were killed, dozens were wounded. One missile hit the capital's television center. We have more in this report from Phil Edwards of Independent Television News.

PHIL EDWARDS, ITN: It's long been a target for Bosnian Serb forces surrounding Sarajevo. Today, an anti-aircraft rocket finally penetrated the TV center's fortress-like structure, bringing death, injury, and devastation. The buildings used by journalists covering the fighting, many of whom are among Sarajevo's latest victims, a policeman guarding them was killed. Shortly afterwards came another rocket attack, this time four were killed and dozens injured in a nearby block of flats. It's been yet another busy day for Sarajevo's hard-pressed medical staff, and there will be more to come. Already this month, since the lifting of the United Nations' ban on heavy weapons in surrounding hills, scores have been killed or injured by gunmen pounding a city virtually at their mercy.

MS. FARNSWORTH: Tightened airport security delayed flights, inconvenienced passengers, and disrupted mail service today in California. Stepped up precautions were in reaction to a bomb threat printed in today's San Francisco Chronicle. The newspaper received the threat yesterday in a letter from the terrorist known as the "Unabomber." The FBI confirmed late today that the letter was authentic. It said an airliner out of Los Angeles International Airport would be blown up within six days. The Unabomber has killed three people and injured twenty-three with mail bombs since 1978.

MR. LEHRER: Former Justice Department official Webster Hubbell was sentenced to 21 months in prison today. He had pleaded guilty to charges of mail fraud and tax evasion while at the Rose Law Firm in Little Rock, Arkansas. Hubbell is a longtime friend of President Clinton and was the law partner of Mrs. Clinton. Special Prosecutor Kenneth Starr brought the charges against Hubbell as part of his Whitewater investigation. The Senate today passed legislation to limit lawsuits against companies and their accountants. Supporters claim it will save companies millions of dollars in legal fees. Opponents say it will erode the rights of individual investors. The House passed its version of the legislation in the spring. Negotiators will now work out the differences. The House today approved a constitutional amendment to ban flag burning. The vote was 312 to 120. The measure now goes to the Senate. The amendment would overturn a 1989 Supreme Court decision which said flag burning was protected by the First Amendment.

MS. FARNSWORTH: The coffin of former Chief Justice Warren Burger was carried into the great hall of the Supreme Court this morning for 12 hours of public viewing. Current and former Justices were present to honor the man who led the high court from 1969 to 1986. The former Chief Justice will be buried tomorrow at Arlington National Cemetery. That's the News Summary for tonight. Now we focus on today's trade deal with Japan, marijuana as medicine, and an essay on cyberspace. FOCUS - A HARD BARGAIN

MR. LEHRER: The trade agreement between the United States and Japan is our lead story tonight. The dispute was over the Japanese auto market. The United States had threatened to impose 100 percent tariffs against Japanese luxury cars sold in the United States. Midnight tonight was the deadline. As it approached, negotiators in Geneva made a deal. President Clinton made the announcement in Washington.

PRESIDENT CLINTON: One of the largest obstacles to free and fair trade has been the artificial barriers erected by Japan, especially around its auto and auto parts markets. For over 20 years, presidents have tried to fix this problem without success. This unfair situation had to end. Trade must be a two-way street. After 20 years, we finally have an agreement that will move cars and parts both ways between the United States and Japan. This breakthrough is a major step for free trade throughout the world. Japan will take specific steps that we expect will increase the number of dealers selling non-Japanese cars by 200 next year and 1,000 over the next five years. In the United States, 80 percent of our car dealers sell foreign cars right next to American cars, but in Japan, only 7 percent of car dealers sell American cars or any non-Japanese cars. That is unfair, and this agreement makes a strong start in fixing it. Japan will begin to undo the rigid regulations of its market for repair parts. This agreement breaks the stranglehold Japanese manufacturers have had over repair shops and garages. It means more U.S. parts will be sold in Japan. Finally, Japanese car makers will expand their production in the United States and buy more American parts both here and in Japan. These measurable plans should increase purchases of American car parts by almost $9 billion in three years, a 50 percent increase. Japan is going to make 1/2 million more new cars in the United States by 1998, an increase of 25 percent. 60 percent of our entire trade deficit with Japan is the result of a car and car parts deficit. This agreement helps to closethe gap. This commitment means thousands of new jobs for American workers, jobs for Americans making parts sold in Japan, jobs for Americans making parts for Japanese cars manufactured here, jobs for Americans making American cars now sold in Japan, and jobs for Americans making Japanese models made in the United States, which will increase substantially in number over the next few years. It is, therefore, a victory for our hard-working families, but make no mistake, it is also a victory for Japanese consumers, because it will mean lower prices for good products for them.

MR. LEHRER: Now, more on this deal as seen from the two sides, and first, we get more of the American view. It comes from Charlene Barshefsky. She's the deputy United States trade representative. She joins us now from the Old Executive Office Building here in Washington. Madame Ambassador, welcome. This is a good deal for the United States?

CHARLENE BARSHEFSKY, Deputy U.S. Trade Representative: Jim, this is a very significant deal for the United States. It has very important structural elements to it, which attack the keiretsu system, which is characterized a closed market in Japan. It increases significantly Japanese production in the United States, as well of vehicles, as well as Japanese production and purchase of auto parts in the United States, and so it will create very significant job opportunities for the United States.

MR. LEHRER: Would it be correct to say that the Japanese just simply folded and said, okay, United States, we'll do exactly what you want?

AMB. BARSHEFSKY: I don't think that that's a characterization that ought to attend any negotiation. Negotiation is a product of give and take. I think it's fair to say we went into the negotiation with three aims: first to deregulate the repair market in Japan, which has a stranglehold on auto parts purchases and has blocked U.S. auto parts sales; second, to open up dealerships in Japan to the sale of our very competitive and very competitively priced cars; and third, to increase parts purchases by Japanese companies in Japan, as well as by Japanese transplant producers in the United States. Those were our aims going into the negotiation. That's what we achieved.

MR. LEHRER: Now, for instance, on the dealerships, is that a decision of the Japanese government, or is that a decision of the Japanese auto companies?

AMB. BARSHEFSKY: Both. We have two problems with respect to dealerships. The first is that Japanese dealers, 40 percent of whom wish to carry foreign autos, believe that they are either precluded by Japanese statute and regulation from carrying foreign cars, or believe or are subject to substantial intimidation by Japanese manufacturers in contravention of Japan's Anti-Monopoly Act. The government of Japan will now issue regulations and statements indicating that these are violations of the Anti-Monopoly Act and that dealers are free to carry whatever automobiles they wish, including foreign competitive automobiles, right alongside Japanese automobiles. The second problem was the manner in which access to the dealership network in Japan was restricted. MITI will now survey its dealers. It will gather those dealers that wish to carry foreign autos, particularly U.S. autos. It will put those dealers in touch with U.S. producers, and from that process, our producers believe that they will acquire about 200 dealerships by the end of 1996 and 1,000 by the year 2000.

MR. LEHRER: Now, is that a guarantee, that 1,000 -- that 200 and that 1,000 -- are those figures guaranteed?

AMB. BARSHEFSKY: It is not a guarantee, but it is a realistic assessment of what our industry believes this agreement will gain for it with respect to dealerships.

MR. LEHRER: Well, what I'm getting at is just to be specific -- let's say we get to five years from now and there have only been 800. Is that going to be considered a violation of this deal that was agreed to today?

AMB. BARSHEFSKY: Jim, this entire deal is wrapped with something that we sought from the very beginning of the framework agreement with Japan and through the other fifteen agreements we've negotiated with Japan over 27 months, and that is a series of data and objective criteria by which we will measure very carefully the success of these agreements. Are we moving toward these kinds of expectations with respect to dealerships and substantial expectations with respect to parts purchases? If we are not, this may well be an indication that the underlying structural practices and barriers which have characterized the Japanese automotive sector are still in place, and under those circumstances, we will utilize our trade laws, just as we have in the past, just as we have had to do in the current situation in order to rectify that disparity.

MR. LEHRER: Now, how are you going to measure -- of the three major points that you raised, how's the United States going to measure success in this parts business, not here, but there, the parts and the repair business in Japan?

AMB. BARSHEFSKY: We know from the Japanese company voluntary plans that through production requirements in the United States, production requirements in Japan, local content requirements in the United States, need in Japan for low cost competitive parts, that overall, we should see about a $9 billion increase in parts purchases by the Japanese manufacturers over the next three years. Jim, it took us 30 years to get t the $18 billion level we're at now. We should see another $9 billion added on top of that in the course of three years. We believe these expectations will be met because these expectations arise from the business plans of the Japanese manufacturers, themselves. It is a combination of need, a combination of competitiveness concerns on the part of Japanese manufacturers, whose auto parts are extraordinarily high-priced relative to any competitive foreign auto part and certainly relative to U.S. parts, and a desire on the part of the Japanese manufacturers to globalize their production as well as to localize and source locally more and more of their parts. In addition, this agreement does something further, and that is for the first time, the Japanese will begin manufacturing the very highest value-added parts in the United States, transmissions and engines, parts that previously had only been purchased by Japan -- from Japanese parts suppliers by the Japanese manufacturers.

MR. LEHRER: Madam Barshefsky, finally, is there any doubt in your mind that this deal would never have come about had the United States not threatened these rather strong sanctions as of midnight tonight?

AMB. BARSHEFSKY: I think that the sanctions threat played a role here and potentially a very important role here. What is equally important, however, and what is symbolized by the sanctions issue is this administration and particularly the President's resolve to stand for American workers, to create jobs here in the United States, and to ensure that foreign countries are as receptive to our goods and our services and our investment as our market is to their goods and their services and their investment, and nowhere is the disparity greater than with respect to the U.S.-Japan relationship, and nowhere has the administration and will we continue to fight for those principles.

MR. LEHRER: All right. Madam Ambassador, thank you very much.

AMB. BARSHEFSKY: Thank you.

MR. LEHRER: Now, the Japanese perspective. Takakazu Kuriyama is the Japanese ambassador to the United States. Mr. Ambassador, welcome.

TAKAKAZU KURIYAMA, Ambassador, Japan: Good evening, Jim.

MR. LEHRER: Is this a good deal for Japan?

AMB. KURIYAMA: I think so. It's a win-win situation. It's a win for Japan, a win for the United States, and win for the international trading community.

MR. LEHRER: In what way is it a win for Japan?

AMB. KURIYAMA: Well, I think for both of us it has removed the most contentious issue on an economic agenda, and it will surely contribute to -- not only to stabilizing our trade relations but also to, to further expanding our, our trading relations in a mutually beneficial way.

MR. LEHRER: In the end result, however, going to be fewer Japanese cars sold, period, in Japan, and elsewhere in the world, fewer Japanese parts sold in Japan and elsewhere in the world?

AMB. KURIYAMA: I don't know. It depends on how, how business decisions are made. As Japanese manufacturers, as Amb. Barshefsky said, it's going to globalize and localize. They've been doing - - making very serious efforts, those transplants, so-called Japanese transplants in the United States. They have been making serious efforts to localize and diversify their sourcing, and I think they, they've become part of the American industry.

MR. LEHRER: But a non-professional look at this -- and say, now wait a minute, it's going to be -- if the goals are met, there are now going to be -- in five years -- 1,000 car dealerships in Japan are now going to sell American cars as well as Japanese cars.

AMB. KURIYAMA: Yes.

MR. LEHRER: Unless there are an awful lot more cars, period, sold in the Japanese, that means -- in Japan, fewer Japanese cars are going to be sold. Isn't this going to hurt your industry?

AMB. KURIYAMA: Well, it's -- if that's the outcome of real competition, I think, that's, what's -- what a market economy is, and I think the, the agreements we have reached today does, do include announcement by the American auto manufacturers to increase their efforts to, to enlarge their presence in the Japanese market, and I think that's very important, because that's an element we think which has been lacking in the past, and with more efforts by the American manufacturers and also by parts manufacturers, if they can make available to the Japanese market those products which, which meet the consumer's needs, I think they're going to succeed.

MR. LEHRER: Is there any question in your mind that, that this -- that these things are going to happen, in other words, that the dealerships will, in fact, take U.S. cars, that U.S. parts and repair shops -- I mean, Japanese repair shops will, in fact, buy U.S. parts, that all this is going to happen, it's not just an agreement on a piece of paper?

AMB. KURIYAMA: Well, of course, you know it takes two to trade. It takes, as you say, it takes to tango. So if those measures are, as I say, matched by the efforts on the American side, I think all in all I think what is expected will really happen. Of course, I must point out that as Trade Minister Hashimoto said and Amb. Kantor said, this is not a commitment, and those plans are business forecasts and subject to economic conditions.

MR. LEHRER: In other words, there are limits to what the Japanese government or even Japanese industry can do about forcing Japanese people to buy American cars. You're saying if the American car manufacturers will be competitive, then they'll get a bigger market, that there's no guarantee that that's going to happen?

AMB. KURIYAMA: No. There's no guarantee, but I think the agreements will, will go a long way to create more opportunities for American industries and a more level playing field, so to speak.

MR. LEHRER: Do you feel the United States played fair in this? Do you think that the sanctions weapon was fairly used against you all?

AMB. KURIYAMA: Well, we have always maintained that unilateral actions, so-called sanctions, are not consistent with the WTO worlds, not consistent --

MR. LEHRER: World Trade Organization.

AMB. KURIYAMA: Yes. With the international agreed rules. And trade disputes should be resolved by, by negotiations, and if not, we'll go to the dispute settlement mechanism which is provided by the World Trade Organization.

MR. LEHRER: But you all did not do it this time. In other words, you went ahead, you went along with the United States, because in the final analysis, the decision was made that this one was too important to let it go that far, is that what it really boiled down to?

AMB. KURIYAMA: Well, I think there was good faith on both sides, and with the spirit of mutual compromise and mutual concessions, and that's what brought the agreement.

MR. LEHRER: Do you feel that, that Japan walked a much longer distance to make this deal than the Americans did?

AMB. KURIYAMA: Well, as I say, I think both tried very hard to find middle ground, and I wouldn't like to, to measure which side went further than the other side, but really I think both sides made efforts with good faith, and I think both recognized the need to strengthen our relations, our overall relationship, which is - -

MR. LEHRER: And that was the most important item here?

AMB. KURIYAMA: I think so.

MR. LEHRER: That was what was in jeopardy, and it was kind of the overriding issue, correct?

AMB. KURIYAMA: Well, if those trade disputes are going to persist, everybody, I think, can expect that it will over time will have some corrosive effects on the overall relationship.

MR. LEHRER: Let me ask you finally the same question I just asked Amb. Barshefsky finally. Is there any question in your mind, Mr. Ambassador, that without the threat of sanctions that this deal would have come off?

AMB. KURIYAMA: Well, I don't -- I hope that perception is not going to prevail in this country because I would like to repeat that in the final analysis, it was the, the common sense and good faith and a spirit of mutual compromise and recognition of the importance of our mutual relationship that prevailed, and that brought the agreement.

MR. LEHRER: Some people have suggested, some Japanese government folks, in fact, in the past have suggested that, that a little threat of sanction helped you all a little bit with your own industry to get a few things, that maybe that helped you as well. Is there some truth in that?

AMB. KURIYAMA: As I say, we have always maintained, and I rather strongly believe that those what you call sanctions are, are against international rules, and if that kind of a perception is going to grow, I think it will certainly undermine the rule of law in the international trading community, the principle which I think both sides have to uphold.

MR. LEHRER: All right. Well, Mr. Ambassador, thank you very much.

AMB. KURIYAMA: Well, thank you very much, Jim.

MS. FARNSWORTH: Now, some analysis of the deal. Andrew Card is CEO and president of the American Automobile Manufacturers Association which represents the major U.S. auto and auto parts companies. He was transportation secretary in the Bush administration. Douglas Smith is vice president of government affairs for Toyota's North American division. Clyde Prestowitz is president of the Economic Strategy Institute, a private non-profit economic think tank in Washington. He was a trade negotiator in the Reagan Commerce Department. And Tetsuya Kataoka is a political scientist and senior fellow at the Hoover Institution, a think tank in Palo Alto, California. Thank you all for being with us. Let's talk about the auto industry for a minute. Mr. Card, this looks good for the auto industry and for auto workers. Is it? ANDREW CARD, American Automobile Manufacturers Association: Yes, it is. This is a good deal for the American automobile industry. It's good for auto workers, whether they work with GM, Ford, and Chrysler, or with any of the transplant operations. But the real winners here --

MS. FARNSWORTH: Transplant operations being the -- as they say - - the Toyota-GM deal in Fremont or --

MR. CARD: Also, Honda building cars in Ohio.

MS. FARNSWORTH: Yeah.

MR. CARD: But this is really a win for the Japanese consumer, because they will now have more choices in their market than they had before this agreement was reached, and those choices will have a more competitive price attached to them, because there will be competition. And that's what this was all about, creating free trade opportunities in Japan. And I think we've cracked the door. This is not solving the problem. This is only mitigating the problem. More has to be done, but this is a significant step.

MS. FARNSWORTH: Mr. Smith, you had objected to -- your company had objected to the hard-line approach. Have you changed your view now that it seems to have worked?

DOUGLAS SMITH, Toyota: Oh, I think the agreement that wa reached today is a very fair agreement for both sides. I think it's a win- win for both countries. I do agree with Andy, though, that several other things have to happen.

MS. FARNSWORTH: Like what?

MR. SMITH: Well, one comment that was made by Ms. Barshefsky was the MITI survey of existing dealers in Japan.

MS. FARNSWORTH: Excuse me. MITI is the trade ministry.

MR. SMITH: Right. And that has to be taken a lot farther. The Japanese Auto Dealers Association did a similar survey several months back. As I recall, the number of dealers who said they were interested was fairly minimal at that point in time, but if certain things are accomplished, I think the number of dealers who would be interested in a foreign name plate franchise would be rather dramatic as far as the increase. And those things I'm talking about are a guarantee by the manufacturers of significant -- enough product availability to have a profitable dealership, a guarantee of spare parts and replacement parts and repair parts, a guarantee of marketing and advertising support, and a guarantee of training for service technicians. If all those things are in place, I think you'll see a phenomenal demand for a foreign name plate dealership.

MS. FARNSWORTH: The news reports today -- some of the wire services made it seem as if Toyota and other companies would have done all of this anyway, that it was in your plans for the future. Is that the case?

MR. SMITH: I do not think so. I know it's not in the case of Toyota.

MS. FARNSWORTH: So the negotiations did make a big difference in what will happen in the future? It's not something that you had in the plan, in the working?

MR. SMITH: The negotiations made us advance the plans that we may have had, but there are more ingredients to it than that.

MS. FARNSWORTH: Okay. Mr. Card, what will happen now specifically? What will American automobile companies do differently now than they would have been doing in the past?

MR. CARD: Well, GM, Ford, and Chrysler have been making a significant effort in the Japanese market, especially over the last two years. As you know, Chrysler announced a major new change yesterday when they purchased a dealership network in Japan. I don't think that would have been possible had the United States not taken a firm position in these trade negotiations. But GM, Ford, and Chrysler are aggressively learning more about the Japanese market. They'll be producing more product for that market. They are anxious to serve the Japanese customer, but they know that they have to wake up the Japanese dealership network to the reality of the benefits of fair competition in their market. And right now, MITI has -- the Ministry of Trade in Japan -- has a responsibility, and they took that responsibility to communicate with the dealers in Japan, such that they now know they do not take direction from the Japanese manufacturers when it comes to franchise agreements. Japanese dealers will now have the same opportunity to sign up franchises the way dealerships in the United States have been able to sign up franchises for foreign dealers here -- for foreign car manufacturers here.

MS. FARNSWORTH: What about the criticism, for example -- people have said that there was such a huge demand for the Jeep Cherokee but that Chrysler wasn't producing it quickly enough to get it into the Japanese market?

MR. CARD: Well, they have a hot product, and supply and demand challenges are always met by companies. But really it's the Japanese consumer who has been limited in their choices in the past, and GM, Ford, and Chrysler had a difficult time reaching the Japanese consumers' demand because the dealership network was closed. Now, we have a chance to open that network up. This is clearly a win for the Japanese consumer and a win for the American worker who will get to build the product that they know will be acceptable in that market.

MS. FARNSWORTH: Mr. Prestowitz, let's turn to you now. You've been listening to all this commentary, and you've watched this over a period of years. What do you think? Is this a significant step, or is it a lot of smoke and mirrors?

CLYDE PRESTOWITZ, Economic Strategy Institute: No. I think it's a significant step. I think the President actually characterized it properly. He said it's a long step forward. It will, I believe, result in increased sales of U.S. autos and auto parts in Japan. It will result in increased sales of U.S. auto parts to Japanese producers in the U.S. So it will increase jobs in the U.S. and incomes, and in that sense, I think it's a significant step forward. At the same time, the President said that much remained to be done. Amb. Kantor made the comment that we shouldn't give a bad name to hyperbole. And he also pointed out that much remains to be done. I think a lot of what happens here depends on how this agreement is monitored. There are a lot of numbers floating around, a thousand dealers, 6.7 billion dollars in increased auto parts procurement, increased production here, 6 billion dollars' worth of increased imports of parts in Japan. None of those numbers are guaranteed. And there are large loopholes. They are dependent on what happens to exchange rates and business conditions and so forth. Now, we've seen in the past in these kinds of negotiations with Japan that when a -- an objective is set and when it's made publicly known, it tends to get reached if attention is focused upon it. President Clinton announced last week that he was appointing a blue ribbon commission to review U.S. trade and economic relationships not only with Japan but with virtually all of the major trading countries in the Pacific Basin. And I think if that commission is established -- and I'm sure it will be -- and if it can monitor this agreement properly, then I think it could have a very significant impact on both countries.

MS. FARNSWORTH: Do you think the threat of sanctions was crucial here?

MR. PRESTOWITZ: Well, I think that the application of some kind of pressure was essential to move the talks forward. All of our experience in these kinds of negotiations indicates that without a deadline, without the potential of some kind of pain, that talks just stretch on indefinitely. So I do think that application of pressure was critical.

MS. FARNSWORTH: Mr. Kataoka, what is your view? Do you think the sanctions were crucial?

TETSUYA KATAOKA, Hoover Institution: [Palo Alto] Well, I hate to admit it, but I'm afraid so, yes. That is to say, an element of coercion brought the Japanese government down to an agreement which is, in my view, about 70/30 in favor of the United States. It's not total victory. I think Ministry of International Trade & Industry hang tough to the end to avoid mentioning numbers, and that is good. I'm a proud member of the Hoover Institution. I find it very distasteful to find any intervention or interference in a free market, and there is a lot of this. And I don't see that this theological debate that the two countries have had from the beginning as to what is -- numerical target means, uh, and that question I see that has not been quite settled. And that's why people are saying, you have to monitor this. So the government's overlooking the shoulders of Japanese government is -- I mean, the Japanese market -- is going to continue. And I have a large amount of skepticism about how this is going to be done without undermining free commerce in Japan.

MS. FARNSWORTH: Okay. I want to come back to you in a minute on some other questions, but just on this question of 70/30 and who it favors, I want to go to Mr. Smith, for one minute, from Toyota. If it favors the United States, isn't that going to hurt your company?

MR. SMITH: I don't see it that way necessarily. You know, there's a lot of reasons why Toyota would want to increase production in the U.S., along with Europe and other countries, and that's simply a focus on where the market is going, where the best production is, where the most cost efficient production is. I see it really as a win-win for both countries, and if I were going to classify it on a percentage basis, I would say it's more like a 50/50.

MS. FARNSWORTH: Okay. Back to Mr. Kataoka. Thank you. You -- you've written about this and about the trade conflict in general and written about how it really threatens the overall U.S.-Japanese relationship.

MR. KATAOKA: Yes, I have.

MS. FARNSWORTH: Do you think that this final outcome, at least this outcome as we understand it at this moment, is slightly threatening to the U.S.-Japanese overall relationship?

MR. KATAOKA: Well, we have saved the relationship because the Japanese government submitted to a new -- managed trade. In that sense, it was saved, but it leaves some rather distasteful aftertaste in our mouth, and I believe this for the first time, as far as I know, in the U.S.-Japanese negotiation of trade in which the United States government used the threat to dissolve the security alliance to seek Japanese government compliance, i.e., in order to gain trade advantage, U.S. government -- I mean, I can point to say Mike McCurry, White House spokesman, Winston Lord of the State Department made statements obliquely, of course --

MS. FARNSWORTH: Obliquely.

MR. KATAOKA: Obliquely hinting that unless Japan comes around, we will not keep the nuclear umbrella. This was the way it was done, and I find this tremendously distasteful.

MS. FARNSWORTH: Mr. Prestowitz.

MR. KATAOKA: Although, although this is not the first time defense and trade have been linked. Mr. Prestowitz ought to know. He was the father of the linking of defense and trade over the case of a fighter aircraft called FSX. So it's been going on.

MS. FARNSWORTH: Let me interrupt you one second. Mr. Prestowitz, what about that? What about the future of Japanese-U.S. relations, generally? There are other disputes in the works, cargo flights over the Pacific, for example. Are you worried about the relationship?

MR. PRESTOWITZ: Well, I think the persistence of this constant string of trade disputes cannot help but to some extent undermine the relationship. And I think that it's, therefore, critical that we find the key to unlock the door that stops this string of disputes. I think that this agreement in the auto area is obviously a step in that direction, but I would say one thing, and that is that there is a question here that deals with the compatibility of much of the structure of the Japanese industrial system with the rules of free trade, the principles of free trade. That question has not been entirely answered, and I think that it needs to be in order to stop the erosion of this relationship by the constant repetition of disputes. I'd like to just add one other point, if I can. We haven't mentioned the Japanese consumer in this discussion so far. There's a procedure in Japan called the Sha-Ken, the car inspection system. And it is a system of controlled inspection which requires every Japanese car owner to have his car inspected virtually every year, and when that happens, typically you have to have your mufflers replaced, your brakes replaced, and parts that sell in the United States for fifty, a hundred dollars, the same parts will go in Japan for six or seven hundred dollars. That system appears to be in line to be deregulated. The Japanese consumer is going to get a huge break out of this deal.

MS. FARNSWORTH: Okay. Mr. Prestowitz, gentlemen, thank you all for being with us. That's all we have time for. Jim.

MR. LEHRER: Still to come on the NewsHour tonight, marijuana as medicine and an Anne Taylor Fleming essay. FOCUS MEDICINAL WEED?

MR. LEHRER: Now, marijuana as medicine. Last week, in the Journal of the American Medical Association, two researchers once again argued that marijuana should be legalized for legitimate, medicinal purposes. Some patients already getting -- are already getting it for that particular reason through so-called "buyers' clubs." Rod Minott of public station KCTS-Seattle reports.

ROD MINOTT, KCTS: Some call Stitch Miller an angel of mercy. Others say he's an outlaw. Three times a week he travels to Seattle, where he delivers to the seriously ill a drug that's illegal.

STITCH MILLER: Hello, Art. I got you guys's medicine here.

MR. MINOTT: That medicine is marijuana. Miller knows he risks up to five years in jail fordoing this but says he has no regrets. One of his clients is Art Bocock. He has AIDS and says marijuana has made a dramatic difference in fighting his illness.

ART BOCOCK, AIDS Patient: The effects on me, most mornings I get up nauseous. Until I smoke a little bit of pot, sometimes I have to vomit two or three times.

MR. MINOTT: Bocock and others here belong to the Seattle area Green Cross Patient Co-Op. According to its members, this is one of at least a dozen so-called "buyers' clubs" in cities around the country. The clubs make marijuana available from an underground network of growers and buyers.

ART BOCOCK: Well, it's been a salvation really. It's liberated us from the black market, for one thing.

MR. MINOTT: Bocock says those black market prices for marijuana are grossly inflated.

ART BOCOCK: It's not uncommon to pay 400 bucks for an ounce. And it takes an ounce a month to make it.

JIM HICKS, Drug Enforcement Administration: They're violating the law, pure and simple.

MR. MINOTT: Jim Hicks is a special agent for the federal Drug Enforcement Administration in Seattle.

JIM HICKS: If through one of our investigations we come in contact with these clubs, then the people involved in it will be arrested; they will be prosecuted. We will attempt to put them in jail.

MR. MINOTT: But reality is the medical marijuana clubs have operated without interference from local police or federal drug agents.

JIM HICKS: Our manpower doesn't permit to really operate at the street level.

MR. MINOTT: So it is a low priority right now?

JIM HICKS: Yes, it would be. It's a tragic thing. These people are desperate; they're reaching out for anything; and rather than, you know, sticking with what's tried and true, would fall prey to some of these snake oil salesmen.

MR. MINOTT: That view is disputed by Dr. Donald Abrams, a cancer and AIDS specialist at the University of California-San Francisco. He says marijuana can be beneficial for some patients.

DR. DONALD ABRAMS, Cancer and AIDS Specialist: We've often found that patients who get nausea from their -- from their chemotherapy treatments, who don't respond to a number of the drugs that we have available to prescribe, have had good success smoking marijuana.

MR. MINOTT: But Dr. Abrams and other medical experts admit proof of marijuana's value of medicine remains largely anecdotal or inconclusive. Still, according to NORML, the National Organization for the Reform of Marijuana Laws, medical pot clubs keep growing. The nation's largest is here in San Francisco, where membership has skyrocketed from fifty to two thousand since it opened one year ago.

MAN SELLING MARIJUANA: That's seven grams. Eighty dollars.

MR. MINOTT: The place is a kind of speakeasy of the 90s, both pot pharmacy and social club. To get in, you must show a membership card. This not-for-profit buyers' club is the brainchild of Dennis Peron.

DENNIS PERON, Buyers Club: This is Tracy. She's buying marijuana for her mother who has cancer. I talked to her doctor, and he's so cool.

MR. MINOTT: To join, clubs usually require a signed letter from a doctor verifying a patient's illness. Orders for marijuana are placed at a bar. Patients select from a menu what grade of pot they want and in what form, smokeable, brownies, or cookies.

DENNIS PERON: Does she want to eat it or smoke it?

TRACY: She smokes, because she used to be a cigarette smoker, and so she's comfortable with that.

DENNIS PERON: She knows. Okay. Let's try to get her the best, you know, because this way she can smoke less.

TRACY: Right.

DENNIS PERON: This is the better kind, high medicinal value, ease the nausea and maybe stimulate her appetite.

MR. MINOTT: Costs range from 5 to 20 dollars a gram, but for those who can't really afford it, the club tries to make the pot available for free.

SPOKESMAN: We definitely give 'em what they want, if not a pinch more.

MR. MINOTT: The marijuana comes from grower donations but often the club must buy its supply.

DENNIS PERON: This is not about money for us, although we do pay these people that work here, and we do pay a salary. This is not about money. And unfortunately, I have to buy on the open market, and the open market is dictated by police action, is the police going to bust a hundred pounds of marijuana or a thousand pounds? That will dictate how much I will pay per pound.

MR. MINOTT: So far, police haven't made any attempts to seize Peron's supply or shut down his club. In fact, San Francisco recently okayed a ballot resolution supporting the legalization of medicinal marijuana. It passed with 80 percent voter approval. The ballot initiative even has the backing of the city's mayor, Frank Jordan, a former police officer.

MAYOR FRANK JORDAN, San Francisco: I see no reason why that can't be used as long as it's under a doctor's advice for medicinal purposes.

DENNIS PERON: I've had no problems, and I don't anticipate any problems. Essentially, if they bust me, they get 2,000 AIDS patients in their parks trying to buy marijuana. They got 2,000 very sick people to throw in their jails if that's what they want.

MR. MINOTT: Advocates of medical marijuana claim the drug not only eases nausea and loss of appetite linked to AIDS and cancer therapy, it also helps a number of other illnesses, including migraine headaches, glaucoma, and multiple sclerosis.

JAY HOWELL: I smoke five or six cigarettes a day. That's just about an ounce a week.

MR. MINOTT: Jay Howell, a member of the Seattle area buyers club, smokes marijuana for his multiple sclerosis.

JAY HOWELL: Mainly the benefits are for spasticity and muscle control, balance. It gives me the ability to walk better. It relieves the tensions of the spasticity that is in my whole body.

MR. MINOTT: Recently, Howell was arrested for growing marijuana in his home. He now faces a felony charge, which he calls unfair.

JAY HOWELL: It's not a situation of getting high. It's a situation of just taking your medicine.

MR. MINOTT: But that view is not shared by many in the medical establishment. Groups that do not recommend marijuana as medicine include the American Cancer Society, the American Medical Association, the National Multiple Sclerosis Society, and the Glaucoma Foundation. Even so, all say they support further research. But marijuana advocates say that's easier said than done. The DEA classifies pot as a schedule one drug, grouped with heroin and LSD. That means marijuana has a high potential for abuse, has no accepted medical use, and cannot be prescribed. It also restricts research.

RALPH SEELEY, Lawyer: It's arbitrary and stupid. I feel it's a violation of fundamental right.

MR. MINOTT: Ralph Seeley is a lawyer from Tacoma, Washington. He's dying of a rare bone cancer and is angry his doctor can't prescribe marijuana to control nausea from chemotherapy.

RALPH SEELEY: I'd be happy to just see it rescheduled as schedule two so that a doctor may prescribe it. Morphine, for example, is a schedule two drug. That's a drug that's danger, potentially abusable, but does have accepted medical use. So that's all I'm asking, is to treat marijuana the same as morphine.

MR. MINOTT: Recently, Seeley filed suit against the state of Washington, hoping to reopen a state-run research project that dispensed marijuana to sick people. The program ended in 1981, after running out of money.

RALPH SEELEY: I think it's a fundamental principle that a physician ought to be able to prescribe medicine to his patient to relieve suffering.

MR. MINOTT: Marijuana advocates cite this 1990 Harvard poll of cancer specialists which found 48 percent would prescribe marijuana if it were available legally.

JIM HICKS: So these are just a variety of attempts to get a foot in the door to begin the process toward legalizing this dangerous substance.

MR. MINOTT: Jim Hicks of the DEA continues to insist that marijuana has no value as medicine.

JIM HICKS: It holds out a lot of false hope to people that this is some kind of a wonder cure or a miracle drug that's being denied by the government, and the scientific evidence does not support this.

MR. MINOTT: Many doctors now recommend this drug as a substitute. It's Marinol, the legal synthetic version of marijuana. It contains tetrahydrocannabinol, or THC, the psychoactive ingredient in marijuana.

RALPH SEELEY: I was given Marinol or Dranabinol to control nausea from chemotherapy.

MR. MINOTT: But many patients, like Ralph Seeley, say Marinol doesn't work as well as pot in treating nausea.

RALPH SEELEY: You smoke a joint, and it's gone. You know, you can't get the drug from the tablet because you can't keep it down long enough to dissolve. The very same drug, THC, is available through marijuana, and you smoke it, and all of a sudden, you stop vomiting, look out the window, the blue sky, you think, this will end.

MR. MINOTT: At $8 a pill, Seeley and others also feel Marinol is far too expensive. Dr. Donald Abrams of UC's San Francisco hopes to clear up some of the questions about marijuana. He's proposing to conduct clinical trials on AIDS patients comparing smoking pot to ingesting Marinol. But Dr. Abrams says he's run into massive bureaucratic hurdles and delays in trying to get an okay from the government to do his study.

DR. DONALD ABRAMS: But it's been two years that we've been trying to organize this trial, and if the science can survive the politics, then hopefully we may be able to answer this question.

MR. MINOTT: Meanwhile, marijuana activists aren't waiting for more studies. They're pressing ahead on their own, with acts of civil disobedience to supply pot to patients. Art Bocock says he hopes to come out of the legal shadows soon.

ART BOCOCK: I would really like to know before I died that I didn't have to break the law to get medicine.

MR. MINOTT: And so he and others vow they'll keep breaking the law until marijuana becomes legal medicine.

MR. STITCH: [talking to Art] Be back next week. ESSAY - LOST IN CYBERSPACE

MS. FARNSWORTH: Finally tonight, essayist Anne Taylor Fleming is having second thoughts about the computer revolution.

ANNE TAYLOR FLEMING: For a while I thought that I was the only one made adamantly nervous by the computer revolution, the only one still dragging my feet on the information highway, to mix a metaphor. After all, everybody I know seems to be computer hip, plugged in, on line, part of some vast new virtual community where people do all of their business, both personal and professional, over a computer screen. They write, shop, talk, flirt, do their taxes, visit the great museums of Europe, and even have sex or some disembodied facsimile thereof via a computer screen. Even mainstream magazines now have regular computer columns of one sort or another, while mini-mall computer stores are busy training new cadres of techno tots who speak computerese with ease. I'd watched this revolution lurch into full swing with trepidation, wondering what in the world it was doing to all of us, how it was changing us, all these bits and bites of information that we can access every minute of every day. Are they making us wiser, kinder, closer, or just distracting us from real work and real problems and real intimacy? Clifford Stoll, the author of Silicon Snake Oil, says it's the ladder. An astronomer, who went on line back in the dark ages, in the early 70's, Stoll was computer mad for a long time, tracking both stars and hackers with equal enthusiasm. Now he says cyberspace is a nonexistent universe, a morally neutral, empty place, where information might abound but people are getting lost to each other.

CLIFFORD STOLL: It's a terrific place to see rude, uncivil behavior, to bump into strangers who don't care much about you or for you. It's a place where, where you meet one side of someone on a chat-line, where somebody presents their chosen side to you. The, they present an imaginary persona to you, but, you know, I want to meet the real person. I want to find somebody who's, who's chatting with me live in the room. I'd rather -- I'd rather have coffee with someone across a table than to chat with a stranger 5,000 miles away.

ANNE TAYLOR FLEMING: Reading Stoll's book put me in mind of a young 20 something woman I had dinner with recently, her pallor and enthusiasm recognizable as the marks of a true junky. She waxed enthusiastic about her computer pen pals, the first people she talked to in the morning and the last people she talked to at night before going to bed. She didn't hear a voice or hold a hand. Her communications were clean, cool, and detached, and to me listening, fiercely lonesome, even scary. Welcome to the new global community, the so-called virtual community everybody's always talking about these days. But what a strange phrase, what a strange idea really. A virtual community is a non-place, a place of techno-intimacy, where we're all plugged in and on-line together but invisible and untouchable all at the same time. I guess this is what some people like about it, the safety, the distance, with the elusion of closeness. That's the hook, the deception. The other deception, Stoll maintains, is that as we become more info- addicted, thanks to our computers, we haven't necessarily become more literate or wiser.

CLIFFORD STOLL: The information highway, rather than giving us information, supplies us with a terrific amount of data,numbers, bits, words, factoids, but data lacks context. It doesn't have content. Oftentimes, it is dubious accuracy. There's a long distance between data and information. Then information alone is a long way from information to knowledge and wisdom.

ANNE TAYLOR FLEMING: Stoll is no luddite, suggesting we all rush out and throw our computers on the trash heap. But he is asking us to think about what's happening to us and to our kids.

CLIFFORD STOLL: Thoreau wrote Walden a hundred and twenty, a hundred and fifty years ago, and he said, "We're in great haste to build a magnetic telegraph to connect Maine to Texas. But it may well be that Maine and Texas have nothing to say to each other." Well, he might have been right. Come to think of it, well, he was right.

ANNE TAYLOR FLEMING: Silicon Snake Oil is one of the first cautionary notes, the memoir of a repentant revolutionary. Others are coming. It's in thewind -- the first cyber freaks back from the frontier, worrying about the world that they, themselves, helped create. I'm Anne Taylor Fleming. RECAP

MR. LEHRER: Again, the major stories of this Wednesday, American and Japanese negotiators reached a last-minute deal on autos. The agreement averted a trade war between the two countries that was to begin with 100 percent U.S. tariffs on Japanese luxury cars. And former Justice Department official and Clinton family associate Web Hubbell was sentenced to 21 months in prison. He had pleaded guilty to charges he overbilled clients, among other things, while a private lawyer in Arkansas. Good night, Elizabeth.

MS. FARNSWORTH: Good night, Jim. That's the NewsHour for tonight. I'm Elizabeth Farnsworth. Good evening.