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Japan Plans More Economic Measures to Help Trim Trade Surplus

March 16, 1994

TOKYO (AP) _ Japanese and U.S. officials who worked out an eleventh-hour agreement on boosting sales of U.S. cellular phones in Japan now disagree over whether the deal should serve as a model for other trade talks.

The agreement on expanding Motorola Inc.’s access to the cellular phone market stretching from Tokyo to the central city of Nagoya was seen as a good omen for easing a stalemate over how to trim Japan’s nearly $60 billion annual trade surplus with the United States.

U.S. Ambassador Walter F. Mondale praised the agreement as a paradigm of detail and clarity, saying it showed that the government could play a crucial role in promoting open markets.

Sozaburo Okamatsu, the trade ministry’s vice minister for international affairs, said today that he disagreed.

The accord on the heavily regulated cellular phone market would not work in other areas where there is little government involvement, such as auto trade, he said.

But Okamatsu, a top trade negotiator, said he hoped trade talks that collapsed in early February could resume in April, after Japan announces a package of new proposals.

″We want to make the package saleable to the U.S. government,″ Okamatsu told reporters.

A governing coalition leader who had been expected to travel to Washington next week, presumably to act as Prime Minister Morihiro Hosokawa’s envoy on trade, appears to have put off those plans.

Reports that lawmaker Ichiro Ozawa had planned to meet U.S. officials in Washington next week had raised speculation about a possible breakthrough in the deadlock. Ozawa has said he favors a compromise on U.S. demands for setting targets to measure the success of future trade agreements.

But Ozawa’s involvement in trade talks has angered some members of the shaky coalition government. And it puts U.S. officials in the awkward position of having to deal with a politician who has no official portfolio in the government.

An aide in Ozawa’s office said today that no decision had been made on the trip. The aide said it was true that Ozawa had been asked to give a speech March 23 at the National Press Club in Washington, but he declined to comment further.

Although he holds no formal position in the Hosokawa administration, Ozawa is considered one of the coalition’s most powerful policy-makers.

As a ″kuromaku,″ or behind-the-scenes operator, Ozawa is following a well-established political tradition in Japan, where those who make the decisions and broker deals often are not the officials formally responsible for them.

Ozawa was also involved in the talks between Motorola and its Japanese partner, IDO Corp., although his exact role remains unclear.

New trade issues between the two nations continue to surface.

Officials said Tuesday that the U.S. government was seeking compensation for what it considered inflated charges by Japanese construction companies for work done at a U.S. naval base.

The U.S. Justice Department complained to the Japanese government that bid- rigging resulted in overcharging at the Atsugi base, near Tokyo.

Collusion to rig bids for construction projects has angered foreign contractors, who complain that the widespread practice shuts them out of the Japanese market.

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