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Japan Plans To Seek Redress On Trade Sanctions With AM-Japan-Chips

April 16, 1987

TOKYO (AP) _ U.S. trade sanctions against Japan due to begin Friday violate international trade rules, and Japan will seek redress through the international trade organization GATT in Geneva, a Foreign Ministry official said Thursday.

Also Thursday, a special envoy for Prime Minister Yasuhiro Nakasone said he would visit Washington next week to present ″concrete measures with concrete figures″ to reduce growing U.S.-Japan trade friction.

″I will strongly appeal to the United States to withdraw its sanctions against Japan over semiconductors and to drop any comprehensive, protectionist trade bill,″ Kyodo News Service quoted the envoy, former Foreign Minister Shintaro Abe, as saying.

The United States has announced plans to impose tariffs of up to 100 percent on $300 million worth of Japanese goods to retaliate for Japan’s alleged failure to live up to a semiconductor trade agreement.

″If the U.S. measures go into force ... then the Japanese side will take action ... in accordance with the rules set up in the GATT (the General Agreement on Tariffs and Trade),″ Foreign Ministry spokesman Takeshi Ohara said.

Ohara said he could not say whether Japan would take any other actions against the United States.

On Wednesday, Minister of International Trade and Industry Hajime Tamura told U.S. Ambassador Mike Mansfield that Japan does not want to escalate the semiconductor dispute into a trade war, but that it felt it was necessary to initiate action at the GATT, a ministry official said.

Japan denies U.S. charges that it broke an agreement not to sell computer memory chips, a type of semiconductor, overseas at unfairly low prices and that it failed to open its market to U.S.-made chips.

GATT is a system of trade rules set up in 1948 to reduce international trade barriers. It allows countries to take action under its auspices to balance trade concessions or restrictions adopted by other nations.

Ohara said Japan told the GATT on Wednesday that it ″strongly hopes that the U.S. government will refrain from taking such unilateral measures in disregard of GATT procedures. ... In case such measures are put into effect, the Japanese government will immediately request the U.S. government to enter into consultations under ... the GATT and seek a satisfactory adjustment of the matter.″

Japan wants the GATT to rule that the planned U.S. tariffs violate GATT rules. If the GATT sides with Japan and the United States fails to drop the tariffs, Japan would have the right to take action against U.S. products in return. It also may seek compensation for any damage caused to its industries as a result of the U.S. tariffs.

Asked if the tariffs would hurt Japanese companies, Ohara said, ″The main problem is one of principle. Another is the discrimination against Japan which runs counter, we think, to the GATT agreement.″

He said Japan would ″continue to explain to the United States that the Japanese side has been faithfully abiding by the agreement.″

A Ministry of International Trade and Industry official said Japanese trade officials have continued to meet with U.S. officials in an effort to head off the sanctions, even though formal meetings on the issue last Thursday and Friday ended in failure.

″We are doing what we can to continue to explain our position to as many people as possible, asking them to understand our position, and we’ll be working to the very last moment,″ he said, speaking on condition of anonymity.

Japanese officials said Thursday they still had not received a list of Japanese products to be affected by the proposed tariffs. U.S. reports said a preliminary list included pocket calculators, photographic film, computers and computer disk drives.

On Wednesday, the GATT voted to set up a panel to investigate a complaint by the European Community that the U.S.-Japan semiconductor agreement violated GATT rules.

The EC charges that the pact allows Japan and the United States to set world prices for computer chips.

Strong sales competition among Japanese computer chip makers during the past several years because of overproduction and slumping world demand led to charges of ″dumping,″ or selling of chips below the cost of production.

Japan agreed to the semiconductor pact last summer to head off possible dumping penalties by the U.S. government.

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