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Japan, India Angry At U.S. Trade “Hit List” Inclusion

May 26, 1989

TOKYO (AP) _ Japan and India reacted angrily and leveled countercharges against the United States on Friday after being named along with Brazil as serious fair- trade violators possibly subject to stiff retaliatory tariffs.

The Brazilian government also denied allegations of unfair trade practices and a presidential aide in Brasilia said the nation would present ″solid arguments in its defense.″

The Bush administration on Thursday listed countries with trade barriers most harmful to American producers, as required by the 1988 Omnibus Trade Act. The government has 18 months to negotiate away the barriers and failure of the talks could lead to tariffs of up to 100 percent on selected exports from the offenders.

Foreign Minister Sousuke Uno summoned U.S. Ambassador Michael Armacost to deliver a protest in Tokyo and the government said there were errors in U.S. complaints about alleged barriers to sales of supercomputers, satellites and forest products in Japan.

Uno and other Cabinet ministers said the U.S. action was ″extremely regrettable″ and officials indicated Japan would refuse to participate in talks sought by the United States to end the alleged practices.

″This designation in no way possesses legal binding force in the international trade system,″ said Hiroshi Mitsuzuka, minister of international trade and industry.

India was cited for barriers against foreign investment and the closing of its insurance market to foreign companies. The administration cited Brazil for quotas on imports and licensing restrictions.

″We regard this law and action under it as totally unjustified, irrational and unfair,″ India’s Commerce Minister Dinesh Singh said in New Delhi.

″The United States’ action is particularly surprising because the U.S. Itself has built and retained a variety of barriers against access to its markets,″ Singh said. ″It is hardly in a position to ask others to lift barriers without doing so itself.″

In Brasilia, Ronaldo Costa Couto, the chief of staff of President Jose Sarney, said in a radio interview that Sarney was ″concerned″ about the U.S. decision but said, ″Brazil has solid arguments in its defense.″

All three nations have trade surpluses with the United States, led by Japan’s $52 billion surplus. India had a $700 million surplus with the United States in 1988, while the most recent figures available from Brazil indicate that nation’s U.S. exports totaled $8.54 billion last year and U.S. imports in the first 11 months of 1988 totaled $2.74 billion.

Last year, U.S. exports to Japan rose 33.7 percent to $37.7 billion and the bilateral trade deficit shrank by $4.4 billion, according to U.S. statistics. But Japanese exports surged this year, increasing political pressure for Washington to take action under the trade law.

Mitsuzuka described U.S. trade policy as ″to threaten other countries into negotiating by brandishing the threat of unilateral sanctions.″

He said the policy was contrary to the principles of the multinational General Agreement on Tariffs and Trade, or GATT, and could undermine the existing multilateral free trade system and ongoing Uruguay Round of GATT.

Foreign Ministry spokesman Taizo Watanabe said Japan would agree to ″quiet talks″ that might coincide with U.S. demands under the 1988 trade law. He also said Japan might complain to GATT if the United States imposed sanctions.

Japan has taken steps to open its markets, Uno said, denying that the specific U.S. complaints ″can be considered to constitute trade barriers.″

″I strongly regret the lack of fairness because the United States has unilaterally made such a decision...despite the fact that the U.S. itself maintains import-restrictive measures and practices to a considerable degree,″ Uno said.

Takuma Yamamoto, president of supercomputer maker Fujitsu Ltd., said the computer market in Japan ″has been totally freed″ and the government policy on buying supercomputers - contrary to the U.S. complaint - is not to discriminate between foreign and domestic producers.

He said U.S. supercomputers have 15 percent of the Japanese market while Japanese supercomputers have only 2 percent of the U.S. market. No Japanese supercomputer ever has been bought by a U.S. public organization, Yamamoto said.

The government also said sales of U.S. forestry products in Japan had doubled from 1986 to 1988, and the minister of posts and telecommunications, Seiichi Kataoka, noted Japan was buying five American satellites this year.

India last year exported about $3.2 billion worth of goods to the United States, it’s biggest trading partner, primarily clothing, diamonds, crude oil and cashews.

Anwarul Hoda, joint secretary in the Commerce Ministry, said India’s trade surplus with the United States only started in 1983 and had dropped sharply from $1 billion in 1987 to $700 million in 1988.

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