Settlement Gives U.S. Crack at Japan’s Flat-Glass Market

The United States and Japan announced settlement Monday of longstanding complaints that foreign manufacturers of window glass and related products have been systematically excluded from the Japanese market.

U.S. Trade Representative Mickey Kantor said the agreement constitutes a significant crack in Japan’s system of closely interlocked business networks that have proved very hard for foreigners to crack.

As a result of the agreement, Japan’s three dominant producers of flat glass will issue a statement reaffirming that Japanese glass distributors are free to purchase from foreign suppliers if they wish.

Clinton Administration officials said this would provide vital “cover” to distributors, most of whom have been unwilling to offend the three dominant Japanese flat-glass manufacturers by purchasing foreign products. Distributors will pledge not to discriminate based on the nationality of a glass supplier.

As has been the pattern in recent trade agreements between the two powers, the Japanese side offered a very different picture of the dispute and the significance of the deal.

While the agreement calls for a detailed monitoring of imports, no goals are set for increasing foreign market share. “These discussions were based on the principles of free trade, including the avoidance of numerical targets,” Ryutaro Hashimoto, minister of international trade and industry, said in a prepared statement, suggesting a victory for Japan.

“We expect to see concrete results within the next year,” said Deputy U.S. Trade Representative Charlene Barshefsky. “To the extent we don’t . . . there will be action under U.S. trade laws.” American firms now get less than 1% of the $4.5 billion in annual flat-glass product sales in Japan.

Japan imports relatively little flat glass, as does Europe, a Japanese official said. That is not because the Japanese and European markets are closed, the official said, “it’s because glass is bulky and breakable, so it’s not good to send it by ship.” About 3% of U.S. flat-glass production is shipped to Europe.

Ralph J. Gerson, president of Guardian International Corp., a leading U.S. flat-glass manufacturer, challenged that statement. “Japanese plants are shipping glass all over Asia by ship,” he said. “We can be very competitive in Japan. Prices are much higher because there has been a cartel. All we’ve asked for is a chance to sell.”