New Dumping Charges May Stall U.S.-Japan Chip Talks
A settlement in the ongoing U.S.-Japan semiconductor trade negotiations is in jeopardy, U.S. industry officials said Friday amid accusations that Japanese chip makers stepped up predatory pricing and dumping activity this month.
Some industry observers said, however, that the allegations were being used as leverage in the talks and that a settlement was still likely.
The trade talks adjourned early Friday afternoon in Washington and were scheduled to resume this morning. The high-level negotiations are aimed at settling an unfair trade practices complaint and two cases of alleged dumping--that is, selling in the United States for less than the cost of production in order to increase market share.
Intel, a Santa Clara, Calif.-based semiconductor maker, said the dumping of the tiny electronic circuits has continued since three Silicon Valley chip makers filed a complaint last September. That dumping accelerated--by as much as 200%--during the first two weeks of July, Intel said, following a hiatus in the trade talks and the initialing of a tentative suspension of the dumping cases.
The company said five of the eight Japanese companies cited in preliminary findings of dumping were involved but would not specify which companies. It said all densities of EPROMs (eraseable programmable read-only memory chips) were being dumped and cited a $1 drop this month in one kind of EPROM that had stabilized at $4.25 in June.
Thomas Dunlap, Intel’s general counsel, said he believed the Japanese were taking advantage of a very narrow opportunity to increase their share of the U.S. market and sell off excess inventory. If a settlement were reached next week, the dumping cases would be suspended and duties collected on the imports would be refunded; a settlement likely would mandate higher prices on the imports than the sum of the current price and the duties that are being collected as a result of preliminary dumping rulings.
Such activity, industry officials say, calls into question the Japanese companies’ intentions and the likelihood that a settlement would be enforceable.
“This behavior is evidence that they’ll look for a loophole in the agreement and use it if they can,” said Sheila Sandow of the Semiconductor Industry Assn., the trade group that filed the unfair trade practices complaint.
A spokesman for U.S. Trade Representative Clayton K. Yeutter declined comment on the allegations, but he said the talks were still far from resolution and probably would continue into next week. When the previous round of talks broke off July 3, today’s deadline was established to allow time for administrative tasks. However, Wednesday is a more likely deadline.
