NEWS ANALYSIS : Japan Doesn’t Share Elation on Trade Pact : Commerce: U.S. side hails accord as a breakthrough. But in Tokyo, there is a starkly different interpretation.

Days after forging a trade accord with the United States--a pact hailed in Washington as a breakthrough--Japanese officials offered a starkly different interpretation Monday that could sow the seeds of discord.

U.S. Trade Representative Mickey Kantor--announcing the agreements on telecommunications, medical equipment and other areas Saturday--stressed that the two sides are not interpreting them differently, a critical failing of past trade accords.

He said the nations agree that there must be “progress in the value and share” of foreign goods, leading to a “significant increase in access and sales” over the medium term.

“There is no difference of opinion as to what that means,” Kantor said.

But that is not what Japanese officials here say. Not only is there no agreement on what will constitute “progress” or a “significant increase,” the Japanese insist that the accord does not commit them to an increase of any kind.

One official involved in the talks said that avoiding such a commitment was the reason the Japanese got the phrase significant increase put in the accord’s explanatory section, rather than, as the Americans wanted, in the criteria used to judge progress. Because of that change, the official said, “the U.S. government cannot insist that the Japanese government guarantee a significant increase in the share or value of foreign goods and services.”

Yet that appears to be what Washington is expecting.

The two sides also appear to differ on the critical issue of whether the accord will be judged on results--an actual increase in sales and market share--or on changes to the bidding process, allowing more foreigners to participate.

Until recently, the countries have focused on making the bidding process more open and transparent to give foreigners the same chances as their Japanese competitors. But the Clinton Administration has waged a battle to switch the focus from process to results--an approach denounced by Japanese officials as “managed trade.”

On Saturday, Kantor hailed the agreement as “results-oriented.”

But Japanese officials in two key ministries involved in the negotiations sharply disagreed.

“We have achieved a process-oriented agreement,” one official said. “These are procedural improvements.” And an official with the Ministry of International Trade and Industry observed: “We promised to make the process more transparent and equal. We are hoping it will lead to increased imports, but that decision will be made by the market.”

The agreement over Japan’s fast-growing, $18-billion telecommunications market also appears to contain a major loophole. The giant Nippon Telegraph & Telephone, two-thirds government-owned and the nation’s largest public buyer of telecommunications equipment, will be exempt from the objective criteria used to evaluate procurement by other agencies.

Instead, NTT pledged only to give all bidders even treatment, which “can lead” to increased sales, according to one official familiar with the agreement.

Such differing interpretations have been a flaw of past trade agreements, producing conflicting expectations that led to further discord, many veteran trade experts say.

In his now-famous paper on U.S.-Japan relations, which the Administration made reference to earlier this year, Glen Fukushima, a former official with the U.S. trade representative’s office, noted that the original framework agreement between Washington and Tokyo, signed in July, 1993, gave rise to “entirely different understandings of what it is they had agreed to.”

To avoid similar such grave misunderstandings, Fukushima argued, any new accord should, among other things, include a detailed confirmation of the agreement by both sides to ensure a meeting of the minds, as well as a full explanation of the accords by both sides before the American and Japanese press to ensure that “each side does not tell its public only its own interpretation.”

The meeting of minds in the latest, heated trade negotiations appears to have been elusive. In coverage Monday, the respected Asahi Shimbun and the Nihon Keizai Shimbun, Japan’s leading economic daily, used the word hidane-- “live coal”--to describe the smoldering discord the trade agreement has left through its ambiguity in terms and differing interpretations and expectations.

In Washington, the Administration held to its upbeat assessment of the agreement, which Kantor said would indeed open opportunities for U.S. firms seeking to sell insurance, glass and telecommunications and medical equipment in Japan.

“Foreign Minister (Yohei) Kono and MITI Minister (Ryutaro) Hashimoto and I are in complete accord that these are tangible and concrete agreements that will move both countries forward in our relationship,” Kantor said in an interview, describing the senior Japanese officials with whom he had negotiated.

But a political cartoon in the Asahi suggested otherwise. It showed Kono and Hashimoto flying back to Japan in a plane shaped like an iridescent Japanese bug. The Japanese describe the bug’s color as tamamushiiro --a term also commonly used to describe agreements that can be interpreted in every way possible.

Times staff writer James Gerstenzang in Washington contributed to this report.