White House Threatens Sanctions With Japan Over Failing Auto Talks : Trade: Frustrated U.S. officials say that if increased pressure doesn’t produce an agreement, it will take steps.

Demonstrating a deep frustration over the failure of talks with Japan to produce an agreement giving U.S. companies a wider access to the potentially lucrative Japanese auto market, Clinton Administration officials decided Wednesday to move toward imposing trade sanctions on Tokyo if the current round of negotiations are not fruitful.

The most recent talks, which ended in Tokyo two weeks ago, left the two sides far apart, and new sessions, involving mid-level officials this week and senior aides next week in Washington, are considered one of the last steps before tough trade sanctions would be unfurled.

To be sure, just by talking about trade sanctions, Administration officials are trying to send signals of a toughened approach to their Japanese counterparts, without actually taking any steps that could disrupt the broad scope of U.S.-Japanese commerce.

But the officials have become extremely frustrated over their inability to make progress with the Japanese, after trying both public approaches and then, in recent months, a more behind-the-scenes approach.

This is the first time that the United States has openly threatened sanctions in connection with auto talks. The troubled history of U.S.-Japan trade talks show that the two sides have repeatedly gone to the brink before any progress could be made. Such was the case during last year when significant breakthroughs were achieved in sectors dealing with telecommunications, medical equipment and, to a lesser extent, glass.

However, the Japanese have repeatedly said they will not negotiate under the threat of sanctions. And if the United States does impose such sanctions, Japan has said it will lodge a complaint with the new World Trade Organization.

The United States is trying to gain a greater share of the Japanese auto and auto supply market, a key to bringing down Japan’s approximately $65.7-billion trade surplus with the United States. The auto sector accounts for 60% of that trade imbalance.

Against that background, the senior U.S. officials closest to the talks are, privately, not optimistic that the new sessions will produce either an agreement or significant movement toward and agreement, although U.S. Trade Representative Mickey Kantor has remained publicly hopeful that progress can be made.

Administration officials have long considered the coming weeks, into early May, as a crucial period, and are therefore trying to turn up the pressure.

The Administration brought senior economic policy-makers together Wednesday for a session of the National Economic Council that deals with U.S.-Japanese trade issues. Administration officials said that if increased pressure in the new round of talks does not produce an agreement, it will be time to begin proceedings, under U.S. trade laws, to impose sanctions within what was portrayed as “a reasonably short period of time.”

For several weeks, officials have been talking privately about the possibility of imposing trade sanctions on Japan, and Kantor said two weeks ago: “We will not wait forever. . . . We are going to insist on the markets being open.”

In recent negotiations, U.S. officials have sought to require Japanese auto makers to voluntarily purchase more U.S. auto parts. They also want easier access to dealer networks and deregulation of the spare-parts industry.

However, Japanese officials complain that the auto parts goals are numerical quotas, which they will not accept.