Japan Calls U.S. Trade Threat ‘Regrettable’ : Commerce: Japanese official says U.S. suggestion that it might impose sanctions won’t help foster trust.

Japan hit back sharply Thursday at a U.S. threat to impose trade sanctions if ongoing bilateral trade talks do not do enough to boost foreign access to Japanese markets.

At a news conference, Hideaki Kumano, vice minister of international trade and industry, called “regrettable” the suggestion Wednesday by U.S. Trade Representative Mickey Kantor that the Clinton Administration might revive so-called Super 301 measures, a feature of U.S. trade law that expired in 1990.

Under the law, the U.S. government was required to conduct an annual review of trade barriers abroad and impose retaliatory sanctions if serious barriers were not lifted.

“Suggesting the revival of Super 301 won’t do any good in fostering trust between the two countries,” Kumano said.

U.S. officials previously had hinted at a willingness to impose trade sanctions on Japan if necessary, but Kantor made the threat explicit in a Washington meeting with a group of Japanese journalists.

Revival of Super 301 “would be an option” if current trade talks do not produce satisfactory results, Kantor said.

The bilateral talks are focused on the import of U.S. automobiles and auto parts to Japan, as well as on telecommunications services, insurance, medical technology and intellectual property rights. Under the ground rules for the talks, an initial set of agreements in these areas is to be reached in time for a Feb. 11 Washington meeting between Prime Minister Morihiro Hosokawa and President Clinton.

Chief Cabinet Secretary Masayoshi Takemura, speaking at a separate news conference Thursday, warned that Kantor’s threat runs “counter to the spirit” of the trade talks. “We cannot help feeling great concern,” Takemura said. “We want the U.S. to act cautiously.”

Kantor’s comments did not take the Japanese government completely by surprise. Hosokawa told a group of top business leaders Wednesday--before Kantor made his remarks--that if the U.S. tried to impose Super 301-style trade sanctions, Japan would fight back through the World Trade Organization, the new body due to replace the General Agreement on Tariffs and Trade next year.

Under December’s GATT agreement, the World Trade Organization will operate what Tokyo expects to be a more effective dispute settlement panel than anything that existed previously. Japanese officials have said the mechanism will provide significant protection against unfair imposition of trade sanctions by other countries.