Japan Denies Obligation to Hike U.S. Chip Imports

From Associated Press

Japan is not obliged to increase American semiconductor manufacturers’ share of this country’s computer chip market, a Japanese trade ministry official said Monday, disputing American officials.

“There is no legally binding agreement except the semiconductor agreement,” an official of the Ministry of International Trade and Industry said.

U.S. government officials have said Japan has failed to live up to a commitment to increase the percentage of the Japanese chip market held by American companies, while Japanese officials say they made no such commitment. Former Commerce Department official Clyde Prestowitz alleged last year in his book, “Trading Places: How America Allowed Japan to Take the Lead,” that the Japanese government pledged in a secret document to raise the U.S. market share of semiconductors in Japan to 20% by 1991.

In the third quarter of last year, the latest period for which there are statistics, foreign manufacturers had 10.9% of Japan’s chip market, the MITI official said in an interview. The U.S. Commerce Department says the American share rose from 9.2% in 1987 to 9.5% in 1988.


In a 1986 semiconductor agreement, Japan pledged not to dump computer chips--selling them at less than fair market value--in the United States, and to increase American access to Japan’s chip market.

Guaranteed Increase

Prestowitz wrote that there was a confidential side letter in which “the Japanese said that they understood, welcomed and would make efforts to assist the U.S. companies in reaching their goal of a 20% market share within five years.

“The U.S. negotiators said that this commitment meant there would be a guaranteed increase in the U.S. share of the Japanese market,” Prestowitz added.

Japanese officials will not confirm the existence of a separate document accompanying the semiconductor agreement, but say there was no document that holds them to increasing U.S. market share.

“In a sense, he (Prestowitz) is wrong because there are no legally binding documents. In fact, U.S. government statements never admitted to the existence of such a document,” the MITI official said.

“In general there are a lot of letters of exchange between the U.S. and Japan in any kind of trade negotiations,” he said. “Sometimes they’re secret and sometimes they’re not.”

Asked if there was an informal agreement by the Japanese government on a 20% share for U.S. chip manufacturers, the official said, “No comment.”


But he added, “Imagine if there was such a letter. It wouldn’t represent a commitment to a market share.”