Japan Defends Its Market for Photo Film : Trade: U.S. complaints of anti-competitive practices are rejected. Tokyo says it won’t discuss the issue.

Japan is defending its photo film market against U.S. complaints of anti-competitive practices and says it will not negotiate with Washington on the issue under the threat of sanctions.

“Japan’s film market is open,” a trade ministry official declared Tuesday.

Washington said Monday that it would investigate trade practices in the Japanese consumer photographic film and paper market, launching what could be another trade wrangle with Japan only days after the two countries settled their dispute over automobiles and parts.

The decision by U.S. Trade Representative Mickey Kantor followed a petition filed by Eastman Kodak in May under Section 301 of the U.S. Trade Act, alleging anti-competitive practices by Fuji Photo Film and other Japanese companies. The law allows for sanctions against foreign products.

“We are not going to have discussions on the film issue under the threat of Section 301,” Trade Minister Ryutaro Hashimoto told a news conference Tuesday.

“The United States has not yet asked us to hold talks about photo film, but we think it will request negotiations under Section 301. And it is our policy not to hold negotiations under Section 301,” he said.

Kodak has said the filing alleges systematic denial of access to vital Japanese distribution channels. It said anti-competitive practices had at times been conducted with the knowledge and participation of the Japanese government.

Also, Japan’s anti-monopoly watchdog, the Fair Trade Commission, has no plan to investigate the Japanese film and paper market, an FTC spokesman said.

Fuji has objected to the U.S. move. “Market shares in the Japanese film market are the result of free competition, and they are unrelated to government regulations,” the company said.

Fuji holds a 70% share of Japan’s color film market and Kodak has 10%; the positions are reversed in the United States, Fuji said.

Some Japanese retailers agree with Fuji. “Of course we handle and develop Kodak film,” said Minoru Nagashima, sales clerk at the Katsumido photo shop in the flashy Ginza district. Behind him were shelves lined with yellow boxes of Kodak film on one side and green Fuji film boxes on the other. Both were selling at $7 for a 24-exposure roll.

But, said Nagashima, even though Japanese customers have the option to buy Kodak, nine out of 10 choose Fuji.

“Our Japanese customers seem to like Fuji’s brighter colors,” he said. “In general, I think Japan needs to deregulate its economy more, but, in the case of film, the market is already open.”

Another shop, Nikon House, said it has not ordered any new film from Kodak for a year because it wasn’t selling. Kodak film is generally priced the same or less in Tokyo than its Fuji counterpart. Developing costs are the same.

Sanritsu Shokai, a store that caters to professional photographers, said Fuji accounts for 70% of its color film sales and Kodak 20%. However, its customers prefer Kodak’s black-and-white film.

“Our customers choose products based on quality, not price. They say Fuji’s fast films are far superior to Kodak’s,” Sanritsu salesman Tsutomu Kobayashi said.

Konica Corp., which ranks a distant second with about 17% of Japan’s consumer photo film market, said it does not think the market is closed.

Only last week, Japan’s Ministry of International Trade and Industry and the U.S. trade representative settled a lengthy dispute on car and car parts trade after Washington threatened Tokyo with sanctions on its car exports.