U.S. Balks at Talks on Telephone Equipment, Says Japan Isn't Serious

Times Staff Writer

In an unprecedented move, the United States has refused to begin an important round of trade talks with Japan, accusing the Japanese of being unwilling to discuss seriously the purchase of American telecommunications products.

Commerce Under Secretary Lionel Olmer had been scheduled to begin negotiations in Tokyo on Monday on how American firms could do business in Japan after the Japanese government turns over the giant Nippon Telephone and Telegraph Co. to private ownership. U.S. companies are eager to sell a wide range of products and services involving telephones, banking, credit and information transmission.

'Just Want Equity'

"It's less a matter of specific products than it is the new market," Olmer said Monday in response to inquiries. "We just want equity in telecommunications.

"Never before," Olmer added, has the United States refused to begin scheduled negotiations.

Since the breakup a year ago of American Telephone & Telegraph Co., Reagan Administration officials argue, the burgeoning U.S. telecommunications market has been open without restrictions to foreign equipment. Japan and Europe should provide the same sales freedom to American firms, the Administration says. Nippon Telephone is the Japanese equivalent of AT&T;, and its divestiture by the Japanese government should provide a lucrative marketing opportunity. The Japanese government is preparing regulations under which foreign firms can offer telecommunications products.

When the United States originally agreed to Monday's bilateral trade talks, it understood that the Japanese had specific new proposals ready for discussion. "Once it became clear that this was not the case," the Commerce Department said, Olmer's trip "became unwarranted."

Olmer is prepared to go to Tokyo, perhaps as soon as next week, if Japan offers new proposals, the department said. But his refusal to open the talks as scheduled constituted a message to Japan that the telecommunications issue is of major importance to the Reagan Administration, especially at a time when the United States is running a massive trade deficit with Japan.

Revision of Clayton Act Urged

In other trade news, Commerce Secretary Malcolm Baldrige said U.S. antitrust law should be eased to allow domestic companies to merge to meet foreign competition.

Baldrige said he wants to repeal a provision of the Clayton Act that forbids prospective mergers that may tend to lessen competition. He noted that the Clayton Act was last revised in 1950, when the United States had no significant competition in world trade. Today, 75% of the products marketed by American firms face competition from abroad.

Businesses might be inclined to seek strength through partnership with another company, Baldrige told reporters, but they could be discouraged by fears that the government would later cancel their mergers.

Commerce Department officials say antitrust theory should be applied to world markets, not just to the United States. A merger combining two firms with 22% of the American market might look much less threatening, one official said, if the partnership had just 4% of the world market.

Baldrige emphasized that he would leave untouched laws allowing the government to break up already merged companies engaging in unfair restraint of trade. Instead, he would limit the government's powers to stop mergers before they occurred simply on the presumption that there was a potential danger to free trade. Baldrige's suggestion has not yet been adopted as an official Administration proposal.

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