Agreement gives Motorola access to celluar telepone market in Japan

March 13, 1994|By Los Angeles Times

TOKYO -- Five days before a deadline for U.S. retaliation, Japan and the United States ended a bitter dispute over access to Japan's cellular telephone market yesterday, raising prospects for a resumption of broader talks that could ease trade tensions.

The agreement aims to allow Motorola Inc. to compete on an equal basis with Japanese competitors in providing cellular telephone service in the heavily populated region stretching from Tokyo to Nagoya.

White House officials portrayed the agreement as a model for future trade pacts because it committed the Japanese government to specific business-related targets, one of the central goals of the Clinton administration's trade policy.

"This is a big win for everyone," said President Clinton, who called the agreement a "breakthrough" in U.S.-Japanese trade negotiations.

"Workers in the United States will gain because the agreement means more demand for cellular telephones and related equipment made in America," Mr. Clinton said. "Japanese consumers win because they'll have access to better service and better technology at better prices."

The dispute centered on a 10-year effort by Motorola to sell cellular telephones in the 155-mile corridor from Tokyo to Nagoya. Motorola had maintained that such sales had been blocked as a result of foot-dragging by its local partner, the Nippon Idou Tsushin Corp. The company, known as IDO, had been assigned the partnership by the Japanese government.

As a result of the new agreement, U.S. Trade Representative Mickey Kantor said that the White House would lift a threat of trade sanctions against Japanese products, which had been announced in February. The deadline for unveiling specific retaliatory measures, which could have included sharp tariff increases on Japanese goods sold in the United States, was to be Thursday.

While the agreement spells out the number of base stations, relays and radio frequencies that will be available to Motorola, it does not guarantee that the U.S. company will gain a specific percentage of the Japanese market. But the availability of these crucial elements in cellular telephone service, which had been blocked in the past, should make the company more competitive with local Japanese companies.

Motorola had complained that it had sold only 12,000 phones in the Tokyo-Nagoya region. Its main rival, Nippon Telegraph and Telephone Corp, sold 310,000 units in the same area. Arnold Brenner, Motorola executive vice president, said at a Tokyo news conference that the new measures will boost the company's capacity from about 150,000 subscribers to about 450,000. The value of additional sales as a result of the deal "will be measured in the hundreds of millions of dollars," he said.

The settlement seems to be "an omen of things to come," he said.

"Both sides have said they don't want a trade war, they don't want sanctions. The fact that the Japanese were willing to negotiate the deal -- I hope it will be good for both countries."

Motorola officials said the agreement will protect "hundreds" of manufacturing and engineering jobs. The company builds its cellular telephones in Illinois.

As a result of the agreement, about 95 percent of the population in the Tokyo-Nagoya corridor will be able to sign up for cellular service by September 1995, at least two years earlier than planned.

U.S. Ambassador Walter F. Mondale and Minister of Posts and Telecommunications Takenori Kanzaki announced the agreement at a joint news conference.

The Motorola negotiations, conducted in Tokyo, were independent of broader U.S.-Japanese talks covering other trade disputes. The wider talks, agreed to last July, are intended to provide the U.S. with greater access to sell automobiles and auto parts, insurance, and medical equipment and other telecommunications gear in Japan.

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