Trade talks keep Japan, U.S. up late

October 01, 1994|By New York Times News Service

WASHINGTON -- Japanese and U.S. negotiators swapped proposals late into last night in an 11th-hour push to reach agreements on opening Japanese markets after 15 months of acrimonious talks. Both sides said the most likely result would be partial agreements and partial U.S. sanctions on Japan.

A deal opening Japan's closed insurance market, officials said, is virtually certain, as well as an agreement on opening Japanese government purchases of telecommunications and medical equipment.

The latter became possible when Japanese negotiators arrived late yesterday with new language on how the two sides would measure whether Japan was following through on its promises to open these markets.

As negotiators worked into the night, they said there was a slim chance they could strike a deal opening the closed Japanese glass market, but there seemed little hope for a deal that would get Japanese companies to purchase more American autos and auto parts.

The Clinton administration has said it will initiate proceedings to impose economic sanctions on Japan if there is no progress on glass and autos. But it has stressed that any sanctions would have a specific target, would take time to go into effect and should not undermine the overall economic relationship between the world's two biggest economies.

The Japanese have almost 100 trade negotiators, experts and aides in Washington for the talks -- almost equal to the entire staff of the U.S. trade representative's office.

Financial markets in New York and Tokyo watched nervously as U.S. Trade Representative Mickey Kantor and Foreign Minister Yohei Kono and Trade Minister Ryutaro Hashimoto of Japan engaged in their marathon negotiating session to determine what was possible and what was not.

They are not expected to adjourn until noon today, when Mr. Kantor will announce the results and any U.S. sanctions.

Billions of dollars have been bet in the currency and bond markets on hunches as to where these talks will end. Any deal, even one that involved limited, focused sanctions on Japan, would probably help to strengthen the dollar, as traders conclude that the Americans will not have to rely solely on a weak dollar and strong yen to bring down Japan's $60 billion trade surplus. If there are no agreements, the dollar may be hammered, and the yen may soar. The dollar was up slightly in

New York against the yen, reflecting anticipation that slightly more good news than bad will result from talks.

When the administration initiated the idea of these framework negotiations with Japan in July 1993, it hoped to be able to announce a package deal of market-opening measures. Such a package was to include Japanese purchases of American autos and auto parts, insurance, telecommunications equipment and medical technology.

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