Japan Rules on Phone Gear Unfair, Olmer Says
Commerce Under Secretary Lionel Olmer told Congress on Friday that complex new telecommunications regulations scheduled to be implemented by Japan on April 1 will put the United States and other foreign suppliers of telecommunications equipment at a serious disadvantage.
Appearing before the Senate Finance subcommittee on international trade, Olmer said U.S. companies face a “cumbersome and inherently discriminatory system” for selling telecommunications products in Japan.
The April 1 regulations are being viewed by U.S. officials as an initial test of Japanese intentions to open trade in other areas, including electronics, forest products, medical equipment and pharmaceuticals.
“Although telecommunications represents a fraction of our total trade, the issue is a watershed in our relationship,” Olmer testified.
Olmer recently refused to begin a new round of talks with Japan on telecommunications trade, alleging that Japan was unwilling to seriously discuss the purchase of U.S. products.
But he will return to Japan next week to resume the talks, in hopes of persuading the Japanese government to change the regulations before April 1.
Olmer released a copy of a March 5 letter to Moriya Koyama, the Japanese vice minister of posts and telecommunications, in which he complained that the proposed regulations require unnecessary information, including confidential business data, and obligate U.S. businesses to obtain prior approval at various levels of the Japanese government.
Olmer told lawmakers that the new regulations, if allowed to take effect April 1 unchanged, will require U.S. companies to face a potential maze of different Japanese authorities for approval of foreign equipment; would leave Nippon Telegraph & Telephone Corp. with control over approving digital equipment, and would lack safeguards to prevent NT&T; from using its revenue to cross-subsidize services where it faces competition.
While NT&T; would start out with automatic approval for its services, Olmer said, “potential foreign competitors will have to begin at square one and submit information which may be confidential before they get initial approval.” Deputy U.S. Trade Representative Michael B. Smith told the subcommittee that President Reagan’s decision not to restrict auto imports should be viewed by Japan “as an indication that it must take action to open its own markets to competition from U.S. exports.”
Both Smith and Olmer refused to speculate on what the Administration would do if the telecommunications talks produce no satisfactory changes.
Their testimony prompted several senators to call for strong retaliatory steps by the United States to reduce the $36.8-billion trade deficit with Japan in 1984.
“The time has come to act,” said subcommittee Chairman John Danforth (D-Mo.).
