Japan makes last bid to avoid trade sanctions

September 27, 1994|By New York Times News Service

TOKYO -- With a deadline looming Friday in trade talks with the United States, Japan's trade minister will leave for Washington today in a last-ditch effort to avert sanctions against his country.

Ryutaro Hashimoto, the minister of international trade and industry, is expected to meet tomorrow with Mickey Kantor, the U.S. trade representative, and probably with Commerce Secretary Ronald H. Brown, officials here said yesterday. Mr. Hashimoto and Mr. Kantor spoke by telephone yesterday morning.

Mr. Hashimoto's ministry is in charge of the talks on automobiles and glass, two of the four sectors being negotiated under the so-called framework agreement signed by the two nations in July 1993.

Officials in both nations say that agreements in those two sectors, especially automobiles, are unlikely by Friday because the two sides are so far apart. It seems likely, therefore, that Mr. Hashimoto's visit is aimed not at reaching an agreement but perhaps at moving close enough to persuade the United States not to impose sanctions in those areas.

There are two separate sets of sanctions that will be decided by Friday. If there is no agreement on opening Japan's markets in government procurement of telecommunications and medical equipment, sanctions will almost certainly be applied under a section of United States law dealing with this matter.

The administration will also decide by Friday whether to cite Japan, and other countries, as unfair traders under the so-called Super 301 clause of the trade law, which would set in motion a process that could culminate in other sanctions.

At a news conference here yesterday, Walter F. Mondale, the U.S. ambassador to Japan, predicted that there would be sanctions if there were no public procurement agreement by Friday. But he said it was "just too soon to know yet" if the administration would decide on sanctions in other areas.

"On public procurement we have to get an agreement," Mr. Mondale said. He added later, "There will be a different tone to our relationship if we are able to break through on insurance and public procurement."

Of the four sectors under negotiation, Mr. Mondale said, an agreement was closest on opening and deregulating Japan's insurance market. In government procurement, he said, "some progress has been made," but "we're not there yet."

Mr. Mondale said that "there has been some progress" on flat glass, which has not been as high a priority as the other three areas, but it is questionable whether it will be possible to reach an agreement by Friday. Talks on sales of foreign autos and auto parts in Japan are "not quite ripe" for a settlement, he said.

The government procurement issue has been handled mainly by Japan's foreign ministry.

The sticking point in the government procurement talks is the issue of how to judge whether progress is being made. The United States essentially wants Japan to commit to an increase in procurement of foreign medical and telecommunications equipment.

Japan has argued that it cannot agree to any "targets," even a commitment that foreign sales should go up without specifying by how much. If the public procurement system is to be made truly fair and open, it will be impossible for the Japanese government to guarantee which companies from which countries will win the bids, officials here argue.

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