U.S. Says Japan Is to Blame if Trade Talks Fail

U.S. Trade Representative Carla Anderson Hills, in a round of meetings Saturday, pressed Japan to prevent a collapse of global trade talks by opening its agricultural market, including rice, to imports.

Intensifying U.S. pressure, Hills placed responsibility for success of the Uruguay Round of the multilateral trade negotiations largely on Japan, saying that differences with the European Community had been narrowed this month.

“If Japan finds itself unable to negotiate in agriculture, which includes rice, then I think Japan stands in large measure to cause the Uruguay Round to fail,” Hills told a packed press conference.

Hills also laid out the main U.S. concerns in bilateral trade, including Japan’s continued market barriers to American auto parts, mainframe computers, paper, glass and legal services.

During her three-day visit to Japan, Hills met the new Japanese ministers of trade, agriculture and foreign affairs, addressed the American Chamber of Commerce and held two press briefings.

She had also attended the Asian Pacific Economic Cooperation conference in Seoul.

In both visits, she stressed the need to successfully conclude the Uruguay Round of the General Agreement on Tariffs and Trade, an international treaty governing world trade.

“Japan is a country whose economy is buoyed up and expanded by world trade,” Hills said. “It is truly beyond my comprehension that Japan would contemplate causing a failure of the Uruguay Round.”

Japan is the world’s largest importer of U.S. farm products. Yet it maintains a virtual ban on foreign rice and restricts access for processed food and other items, Hills said.

On bilateral trade, Hills said considerable progress had been made between the two nations on supercomputers, satellites, semiconductors, wood products, telecommunications and other items. But, she warned, trade frictions--along with U.S. political pressure--are growing in a number of other areas.

Hills warned that Japan must act decisively to forestall several pending U.S. protectionist bills.

The U.S.-Japan Trade Gap

Despite progress with some bilateral trade concerns, U.S. officials say the following items are a growing source of friction with Japan: * Autos and auto parts. These account for 75% of the $40-billion-plus U.S. trade deficit with Japan. A recent U.S. study showed that the cost of the same after-market auto parts averaged 340% more in Japan than in the United States; almost 200% more for factory-installed parts.

* Computers. U.S. officials are disturbed that foreign firms hold less than half of 1% of the market for Japanese government procurement of mainframe computers. In addition, about 70% of Japanese government contracts have only one bidder. In contrast, foreign firms enjoy a 41% share of Japan’s commercial mainframe market.

* Legal services. Current Japanese law prohibits partnerships between Japanese and foreign lawyers.

* Paper and glass. Despite being competitive globally, the U.S. paper and plate glass industries have not been able to crack the Japanese distribution network, according to U.S. trade officials.