4 Countries Targeted in Trade Fights

The United States on Tuesday targeted four nations for investigations on charges of unfair trade practices and hailed progress with Japan to deregulate its insurance industry.

Brazil, Indonesia and Australia face investigations in connection with programs that affect auto makers. Argentina is alleged to have excessively high tariffs on imported textiles, apparel and footwear.

At a news conference, acting U.S. Trade Representative Charlene Barshefsky said the interim agreement with Japan on insurance is “a positive step” but that it does not meet the U.S. goal of deregulation of Japan’s life and and other insurance sectors.

The interim agreement, announced earlier in the day by Japanese Finance Minister Wataru Kubo, sets a Dec. 15 deadline for a comprehensive settlement. It also postpones until 1997 entry by Japanese subsidiaries into the so-called third sector, which has been a profitable niche for foreign firms. (Personal accident, sickness and nursing care insurance are part of the “third sector.”)

In the interim pact, Japan agrees to allow sales of automobile insurance directly to consumers by mail or phone, Barshefsky said.

Barshefsky called that a “down payment” by Japan on primary sector deregulation.

She delayed imposition of sanctions in another dispute, this one involving heavy electrical equipment with Germany, because that country has agreed to open its domestic market. Barshefsky is to meet German Economic State Secretary Lorenz Schomerus on Thursday to discuss details.

Under the so-called Section 301 of World Trade Organization rules, the U.S. and each targeted country--Argentina, Australia, Brazil and Indonesia--must try to resolve their dispute within 60 days. Failing that, a WTO panel would convene to rule on the dispute, and, if the U.S. prevails with the WTO, it can impose trade sanctions against the country if the barriers aren’t dropped.

“In light of the importance of the U.S. auto industry to the U.S. economy, eliminating foreign barriers to U.S. exports of autos and auto parts is of vital importance to the industry’s economic growth and to U.S. national economic interests,” Barshefsky said.

At issue are:

* Indonesian policies that grant tax and tariff benefits to “national car” makers based on the percentage of domestic content--local parts and labor--in their vehicles;

* Brazil’s policy of reducing tariffs on imported cars if auto makers export a sufficient volumes of domestically made parts and vehicles and promise to meet local content targets;

* Australian export subsidies on leather used in auto upholstery;

* Argentine tariffs that exceed the 35% level the WTO permits on textiles, apparel and footwear. Argentina was accused of other import barriers contrary to WTO rules.