International Business : U.S. and Japan Agree to Open New Trade Talks : Commerce: Negotiators rush to meet Sept. 30 deadline. Neither side relishes sanctions, or capitulation.
Senior U.S. and Japanese negotiators opened trade talks Wednesday, racing to strike a deal ahead of a month’s-end sanctions showdown.
Arriving for talks with U.S. Trade Representative Mickey Kantor, Japanese Foreign Minister Yohei Kono said he was optimistic that an agreement would be reached before the Sept. 30 deadline.
“I will make every effort to reach agreement in Japan-U.S. trade talks. I have an impression that the U.S. is also willing to reach agreement,” Kono said.
Kono, also expected to meet with President Clinton, added: “I cannot set a time limit at this moment but I do hope we are going to make a deal as soon as possible.”
Tokyo faces a stark ultimatum: open your markets or risk sanctions on everything from car parts to flat glass. And while neither side fancies a trade war, nor can either stomach the thought of capitulating in this, the home stretch.
Asked what sanctions course he might pursue, Kantor replied, “We have made no decision on any of that. We are waiting to see what Minister Kono has to say, and we will have our discussions (Wednesday) and in the next number of days.”
Kantor said he did not know if the Japanese were bringing new proposals. Asked if he had anything new to offer Tokyo, Kantor replied, “Our position is quite clear.”
In testimony to the Senate Banking Committee, Commerce Secretary Ronald H. Brown said that history suggested that the talks would go down to the wire.
“I can’t say there has been great progress thus far; there has some been some,” he told the committee.
Kono’s deputy, Sadayuki Hayashi, kicked off the day’s meeting with Kantor’s top Japan aide, Charlene Barshefsky, while Brown was expected to be in close telephone contact with his Japanese counterpart, Ryutaro Hashimoto.
In short: the heat is finally on.
The negotiators last met early this month on the site of international trade talks in Los Angeles. While those talks helped improve the often sour tone of transpacific economic relations, administration officials said they forged little concrete progress.
At issue: how best to cut Japan’s ballooning trade surplus and open its markets to more foreign goods. Despite months of fitful negotiations and plenty of promises to make “best efforts,” the two-way trade picture remains bleak.
On Tuesday, the Commerce Department reported a staggering 21.6% jump in July’s U.S. trade deficit, with Japan accounting for half the shortfall at $5.67 billion.
The news--much worse than expected--was gobbled up in financial markets, which are increasingly fearful of a costly confrontation between the world’s biggest economies.
“This is going to go down to the wire,” said economist Christopher Rupkey at Mitsubishi Bank. “The two parties are trying to negotiate (a trade truce) and they won’t reveal their hands until the final minute.”
On Tuesday, Clinton met a clutch of top advisers to mull trade strikes should the last-ditch negotiations fail to broker a deal by Sept. 30, Administration sources said.
The sources said “all options” were under review as the two sides make one last stab at averting a sanctions showdown.
Sanctions proposals are running on two tracks.
First, Washington is pushing Tokyo to play fair when it awards government contracts in telecommunications and medical technology. Without a breakthrough, it will face retaliatory sanctions under so-called Title VII.
Second, Tokyo could face accusations of discrimination on a range of fronts as part of the Super 301 law, which would trigger months of negotiations under the threat of sanctions.
