U.S. agrees to discuss trade war catalyst

Press, 24 April 1987, Page 10

U.S. agrees to discuss trade war catalyst

NZPA-Reuter Tokyo Japan and the United States have agreed to reopen talks on Japan’s alleged failure to live up to a bilateral pact on the microchip trade, a Ministry of International Trade and Industry official said yesterday. The United States Trade Representative, Clayton Yeutter, and M.1.T.1. Minister, Hajime Tamura, had agreed in a meeting yesterday to hold talks in Washington next week or the week after, the official told Reuters. The United States has imposed 100 per cent tariffs on SUS3OO million ($517 milliion) worth of Japanese electronics goods in retaliation for its alleged failure to stop dumping microchips at below cost in foreign markets, and to improve access to the Japanese market for American semiconductor makers. The M.1.T.1. official said the experts would discuss differences in the two sides’ interpretation of the agreement, including definitions of dumping and how to measure improved

access. Further talks would also be held after statistics on the semiconductor trade for April were released in mid-May, said the M.1.T.1. official. A United States Embassy spokesman said the second set of talks would be more important because new information would be available. Yesterday, Mr Yeutter defended the decision to implement the sanctions saying they were based on “unambiguous and overwhelming” information that Japan, dumped chips in third countries and failed to import enough American computer chips. Meanwhile, a special Japanese envoy said yesterday that Japan was preparing a huge boost to its economy along with moves to open its markets to American goods, in a bld to cut its large trade surplus with the United States. But Mr Shintaro Abe said in Washington that he received no concrete indication in a meeting with President Ronald Reagan that the tariffs would be

rescinded soon. Mr Abe, is in Washington to cool trade tensions before a visit by the Prime Minister, Yasuhiro Nakasone, next week. He said the huge boost to Japan’s economy, in the form of a special supplementary Budget to raise spending by the equivalent of SUS 34 billion ($5B billion), would be taken up after the regular Budget was passed, but did not say when that might be. Half the money would go to public works spending and the other half would be freed for private spending through tax reductions, to spur domestic spending and draw in imports. Mr Abe also said Japan planned to spend SUS2O billion ($34 billion) in foreign aid to developing countries in the next three years, to spur their economies and increase over-all world trade. The United States deficit hit a record SUSI 69 billion ($291 billion) last year, with more than onethird of it in trade with Japan.