U.S. to Lift More Sanctions Against Japan

Encouraged by signs that Japan has stopped dumping underpriced semiconductors in world markets, the Reagan Administration confirmed Tuesday that it is on the verge of lifting an additional $84 million of sanctions imposed on Japanese electronics manufacturers last spring.

White House spokesman Marlin Fitzwater said the sanctions for so-called third country dumping would be dropped--”probably this week.” The move follows a Commerce Department report concluding that Japanese manufacturers stopped selling semiconductors below “fair market values” in nations other than the United States and Japan. In June, the United States lifted $51 million in dumping sanctions to reflect progress by Japan in curtailing what American officials considered unfair trade practices.

Another $165 million of the $300 million in sanctions imposed by President Reagan in March would remain in place, a continuing penalty for what U.S. officials say is Japan’s failure to open its markets to American-made computer chips. In a report issued Monday, Bruce Smart, undersecretary of commerce for international trade, said there was “little evidence” that Japan was increasing access to its markets for American manufacturers, which was called for in the 1986 semiconductor trade agreement between the two countries.

“Until meaningful progress is registered in this area, the semiconductor agreement is not being fully implemented,” Smart said.

The $300 million in tariffs on Japanese exports of televisions, power tools and small computers--the sharpest U.S. action against Japan since World War II--was retaliation for Japan’s failure to comply with the trade agreement. U.S. semiconductor manufacturers had demanded punitive action against Japanese trade practices that they said unfairly gave Japan the lion’s share of the worldwide semiconductor market.

U.S. government officials refused Tuesday to disclose from which electronics goods the punitive duties would be dropped.

American industry trade groups had called Monday for partial suspension of the sanctions in light of the Commerce Department findings. Consequently, they applauded the White House announcement Tuesday while calling for further efforts to reduce trade imbalances.

“This is good news for us,” said Jeanne Locke, spokeswoman for the Cupertino-based Semiconductor Industry Assn. “In the spirit of the agreement, we were working with the government to get an equilibrium in the marketplace, to have a fair and free market. If we asked for the sanctions to be held on after we got compliance, we wouldn’t be in the spirit of the agreement.”

But John Hatch, spokesman for the American Electronics Assn. in Santa Clara, said some sanctions for Japan’s failure to open its markets need to remain in place, given a continuing 6-to-1 imbalance between Japanese electronics exports to the United States and U.S. exports to Japan.

“We think those figures just very vividly demonstrate that we do not have access to their electronics market yet,” Hatch said.

Both groups urged that the sanctions be suspended--not permanently removed--so they could swiftly be reimposed if it appeared that Japan had slipped back into violations of the trade agreement.

Japanese government offices and the Japanese Embassy in Washington were closed Tuesday (Wednesday in Japan) in celebration of Culture Day. But a trade ministry official contacted in Tokyo by the Associated Press said the Japanese government hoped the remaining sanctions would be lifted quickly.

“Naturally, we welcome the fact that the American government has recognized that there is no dumping by Japanese companies,” said the official, Junji Yoshihra. “We assume now that the U.S. government will remove what it calls its trade sanctions against Japan.”

Times staff writer James Gerstenzang in Washington contributed to this story.