U.S.-Japan Trade Talks on Forest Products Fail

American and Japanese trade negotiators failed in five days of intensive talks to reach agreement on opening Japan’s market to an estimated $2-billion worth of imported forest products, officials said today.

“We made a great deal of progress, but there are significant differences between our positions,” a U.S. trade official involved in the talks said.

Last year, President Bush, in accordance with the U.S. Omnibus Trade Act, listed forest products, supercomputers and satellites as three specific areas in which Japan’s market is closed to U.S. products.

The law gives U.S. trade negotiators one year to make significant progress in opening Japan’s market and gives them the authority to retaliate, including placing tariffs on Japanese goods, if Japan fails to open its market.

The seventh round of talks on forest products began Monday and had been scheduled to end Tuesday. Despite a three-day extension, trade officials failed to find enough common ground to sign an agreement.

U.S. negotiators recently reached agreements with Japan on increasing access to Japan’s supercomputer and satellite markets.

And last week in another set of trade talks in Washington, Japan accepted several U.S. demands aimed at changing basic economic structures that have been blamed for causing at least part of the nearly $50-billion annual U.S. trade deficit with Tokyo.

The Japanese are hoping their willingness to bend to U.S. pressure in the three specific areas and in the general trade talks will reduce trade friction in Washington and persuade Bush to leave Japan off his list of unfair trading partners this year.

“It is important to settle those issues so protectionist tides should be prevented from rising,” said Taizo Watanabe, the chief Japanese Foreign Ministry spokesman.

“We’d like to have another meeting (on forest products) soon and reach a conclusion as soon as possible,” said another Foreign Ministry official who asked to remain anonymous.

The U.S. trade official said another round of talks could take place as soon as late next week and would probably be held in Washington.