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Japan Erasing 25 Key Tariffs : Duties to Be Cut 20% on 1,800 Other Items

Times Staff Writer

Prime Minister Yasuhiro Nakasone’s government announced Tuesday that it will eliminate the import duties on telecommunications equipment and 24 other manufactured products and reduce by 20% the duty on more than 1,800 other products.

The move was the first step in a three-year “action program” that Nakasone announced in April to stave off protectionist legislation by the U.S. Congress.

The U.S. government, often disappointed by previous Japanese promises to remove trade barriers, welcomed the news cautiously.

“The positive action on tariffs is an indication of Japan’s willingness to take action to solve trade problems,” a Commerce Department spokesman said in Washington.

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Japan said tariff charges will be abolished entirely, after parliamentary action, on telecommunications equipment, aluminum aircraft skins, automobile parts and lead-acid batteries, products in which the United States is a world leader.

“We hope the elimination of these duties will spur the sales of U.S. firms trying to export to Japan,” said the U.S. spokesman, who asked not to be identified.

He noted that tariffs will be reduced on other products of “considerable interest” to American businesses, including paper products, photographic film and unfinished aluminum.

It is far from certain, however, whether these tariff cuts will be sufficient to mollify U.S. lawmakers.

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On several items of interest to the United States, tariffs will remain high even after the promised cuts. The duty on kraft paper, for example, will be reduced only from 8.5% to 6.8%; the Americans had asked that this tariff be eliminated. And on other products of importance to U.S. businessmen, notably plywood, the Nakasone government has refused to ease tariffs at all.

Non-Tariff Barriers

Other barriers have been just as important as tariffs in blocking access by U.S. firms to Japan. The troublesome non-tariff barriers include marketing networks closed to outsiders and testing and certification procedures that effectively keep out imports.

While welcoming Tuesday’s announcement, the United States wants important concessions from Japan in the area of non-tariff barriers.

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“We hope Japan will take additional and meaningful market-opening measures” next month when it announces the removal of some non-tariff trade barriers, the Commerce Department spokesman said.

Japan had a foreign-trade surplus last year of $45 billion, including $36.8 billion with the United States, and Japan’s trading partners have demanded that Tokyo take action to ease access for foreign goods.

Nakasone’s Cabinet and executives of the ruling Liberal Democratic Party pledged to make permanent the elimination or reduction of duties on 74 items. However, they said that the 20% reduction of duties on 1,790 agricultural and industrial products will be withdrawn if the move results in “considerable injury to domestic industries.”

Satisfying Domestic Critics

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Foreign Ministry officials, who asked not to be identified by name, said the government agreed to this condition to satisfy domestic critics of the move. Tariffs will not be returned to their earlier levels except in unusual cases, the officials said, noting that when a similar condition was included in a 1972 round of tariff cuts, “only three or four tariffs” were ever restored to the higher levels.

Nakasone’s government also said it is willing to negotiate the reciprocal elimination of tariffs on all industrial products as part of a new round of multinational trade talks. It also proposed to the United States that tariffs on 42 high-tech and electronics products, including computer parts, be eliminated in bilateral negotiations, without waiting for the new round.

Japan’s action should strengthen the world trading system and provide a good atmosphere for a new round of international trade talks, the Commerce Department spokesman said. The United States and most other industrialized nations support the idea of a new round of negotiations, but France has balked at the proposal.

Japanese diplomats said that the tariff reductions symbolize Nakasone’s willingness to open Japan’s markets. Finance Minister Noboru Takeshita said the tariff package will reduce annual revenues by about $280 million, or 11% of tariff revenues for fiscal 1983.

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Unilateral Reductions

Michihiko Kunihiro, director of the Foreign Ministry’s economic bureau, said Japan has reduced tariffs unilaterally on five occasions since the Tokyo round of multinational trade talks ended in 1979.

“I think this is a telling example of our willingness to proceed with improvements in market access,” he said.

The elimination of tariffs on telecommunications equipment--defined as eight items in the international tariff code--will mean that U.S. manufacturers can deliver their products here at costs at least 5% less than at present.

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Elimination of a 5.7% tariff on auto parts and reduction of tariffs on color and black-and-white film to a uniform 3.9%--the same as the U.S. rate--were regarded by the government here as especially significant.

Items of interest to Asian nations--bananas, palm oil, boneless chicken and mushrooms, for example--are also on the list.

Reductions on Wine, Liquor

On wine, tariffs will not be reduced until April 1, 1987, when they will come down from 38% to 30.4%, plus a specific duty of at least 53 cents a liter. Similarly, the tariff on Scotch whisky will be reduced from 36% to 28.8%, plus a specific duty of 99 cents a liter.

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No action was taken in connection with plywood; the government said in April that duties on plywood would not be cut for three years. And Nakasone instructed his Cabinet to draw up by next month a long-range outlook for cheese and chocolate products.

Times Staff Writer Robert Rosenblatt in Washington contributed to this story.


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