U.S.-Japan Chip Talks End Without Final Agreement
Marathon negotiating sessions between U.S. and Japanese government officials over semiconductor trade issues ended without a settlement early Thursday morning, but the U.S. government again gave Japanese chip makers a reprieve in hopes that an accord will be reached later this month.
However, it appears that negotiators will have plenty on the table when talks resume, probably July 14. They face a July 26 deadline for cementing an agreement encompassing two anti-dumping cases and a wide-ranging unfair trade practices complaint filed by the U.S. computer chip industry. Industry sources in the United States and Japan said that although major components of an agreement had been achieved, some major points, as well as technical issues, remained unresolved.
In the meantime, the Commerce Department tentatively has agreed to suspend a final ruling in a second chip-dumping case in which Japanese companies face stiff tariffs on computer chips that they import here. An export is “dumped” when it is sold at below cost or cheaper than in the home market.
Suspension Could Be Scrapped
U.S. government and industry officials stressed, however, that the suspension agreement, signed in the early hours Thursday after a 22-hour negotiating session, and the one signed Monday in another dumping case would be scrapped unless an overall agreement gave U.S. chip makers better access to Japan’s burgeoning market for computer chips.
“These proposed agreements are contingent on resolving an overall package agreement on all outstanding semiconductor trade issues with Japan,” the Commerce Department said in a statement.
In Tokyo, Japanese government officials welcomed the suspension agreement, but the response of the U.S. industry was less warm. The U.S. negotiating team was praised for “resolving a large number of key issues,” by the Semiconductor Industry Assn., a San Jose-based trade group that filed the unfair trade practices petition.
“However, if the Japanese negotiating team remains intransigent on the remaining issues, the conclusion of a final settlement will be jeopardized,” George Scalise, head of the SIA’s public policy committee, said in a statement. And, Scalise’s statement warned, the SIA would reinitiate its cases if a “satisfactory” settlement was not reached.
Industry and government officials declined to give details of the tentative agreement. However, the sticking points are generally believed to include how to measure improved access to Japan’s markets for U.S. companies and methods for monitoring the Japanese companies’ pricing policies.
U.S. companies have complained that while Japanese makers are flooding the market here with underpriced products, they have been barred by government-directed policies from gaining more than a 10% share of Japan’s estimated $10-billion market.
In the last year, an industrywide slump cost U.S. companies $1 billion in profits and 55,000 jobs, and the chip issues have become the most visible evidence of tension in U.S.-Japan trade relations.
Desiree Tucker, a spokeswoman for the U.S. Commerce Department, called the recent negotiations “the most complicated ever” because of the rapidly evolving technologies involved. “The monitoring of all” of the elements of the agreement “and getting the appropriate data from the Japanese companies are the key” to the settlement, she said.
Japanese officials also agreed that the negotiations were difficult.
Calling the marathon talks “vigorous,” Michio Watanabe, Japan’s minister of International Trade and Industry, said at a press briefing in Tokyo that he was pleased that “tough negotiations that have lasted for close to a year have come to this stage, even though matters of market access and pricing remain to be fine-tuned.” Japanese officials addressed most of their comments to the anti-dumping agreements but acknowledged that those, too, were tentative.
The agreement initialed by the Commerce Department suspends final determination in a dumping case involving a type of chip called the 256K D-RAM, a circuit that stores information and serves as the memory for a wide variety of computers and consumer products.
In preliminary rulings, the government found that several Japanese companies dumped the 256K chip on the U.S. market and that such dumping was injuring the U.S. industry. Tariffs equal to the dumping margins--which have so far been calculated at as high as 108%--would become permanent in the final determination.
On Monday, the Commerce Department initialed a tentative agreement in a dumping case involving another kind of memory chip called the EPROM.
“The United States has so far only initialed these agreements,” Masuji Yamamoto, an official of Japan’s Ministry of Interational Trade and Industry, said in Tokyo. “This is not final. It is too early at this stage to say who won or who lost. If in the next month an agreement is not reached, the U.S. government is free to institute anti-dumping proceedings. The U.S. still has a trump card.”
The trump card is the unfair trading practices complaint, called a 301 case. Gary Holmes, spokesman for U.S. Trade Representative Clayton K. Yeutter, said the department still will make its recommendation on the 301 case to President Reagan by the July 11 deadline, even thought the negotiations will resume later.
Reagan, whose options in the case are wide ranging--from quotas to increased tariffs and fines--has an additional 21 days after that in which to announce his decision.
Times staff writer Andrew Horvat in Tokyo contributed to this story.
