U.S. Says Japan’s Backsliding May Threaten Pact : Trade: Officials say Tokyo is not following through on promises made in April on the Structural Impediments Initiative.

The Bush Administration is becoming increasingly annoyed at Japan for what it considers Tokyo’s backsliding on promises made in the sweeping Structural Impediments Initiative, intended to open Japan’s markets and signed by both sides on April 5.

Senior officials in several key departments and agencies say Tokyo is not following through on some pledges that Japanese negotiators made during the talks and is refusing to come forward with details on other agreements that they had promised to “flesh out.”

They say that, unless Tokyo changes its tune soon, the accord--which the two governments hailed as historic when the interim draft was negotiated--could be in jeopardy. A failure would prove a major embarrassment for the White House and possibly provoke Congress’ ire, too.

The April 5 document contained pledges by Japan to take a spate of bold new actions to open its markets to more foreign imports and businesses, including deregulation of Japan’s complex goods-distribution system and stepped-up enforcement of antitrust laws.

It promised liberalization of foreign investment regulations in Japan to make it easier for foreigners to build plants or take over existing firms. And it promised an increase in government spending for infrastructure and public works.

Largely because of the promises that Japan made in the accord, the White House decided not to brand Tokyo as an unfair trading partner this year, brushing aside demands by key lawmakers that it file additional trade complaints that could lead to U.S. retaliation.

U.S. officials cautioned then that the pact was only an “interim” report and that negotiations would continue in an effort to nail down specifics and come up with additional proposals for a final agreement to be completed in mid-July.

But U.S. negotiators found in a post-accord meeting with their Japanese counterparts that Tokyo apparently had no intention of following through with some of the promises and had little interest in discussing additional proposals.

As a result, the dispute has been referred to the Cabinet level. It may require new efforts by President Bush to resolve the dispute in time to avoid a squabble at the annual seven-nation economic summit in Houston on July 9.

Administration officials concede that some backsliding was expected because that has been a traditional Japanese negotiating tactic. But they said Tokyo’s intransigence has exceeded expectations.

It was not immediately clear whether Bush would consider reversing his earlier decision not to threaten Japan with new trade sanctions.

Perhaps the most egregious issue, in U.S. eyes, has been the refusal of Japanese negotiators to set a target for boosting government spending on infrastructure. But U.S. negotiators complain that Japan also is declining to “flesh out” other promises--such as giving specifics on how much it will increase fines for violating antitrust and anti-competitive laws.

U.S. officials said time is running out for achieving a meaningful final report. Negotiators have one more meeting before the June 25 summit.