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Japan May Agree to Double U.S. Chip Imports

July 22, 1986|From Staff and Wire Reports

U.S. and Japanese trade negotiators, who resumed talks Monday on computer chip issues, are working from a draft agreement that will allow U.S. companies to double their sales in Japan by 1990, according to a report in the London newspaper Financial Times.

A spokeswoman for U.S. Trade Representative Clayton K. Yeutter, whose office is conducting the Washington talks, would not address the specifics of the article but said all the issues it raised had been "under discussion" during the lengthy negotiations.

Officials of the Semiconductor Industry Assn., a U.S. trade group involved in the formal semiconductor trade complaint against Japan, confirmed that a draft agreement had been reached but declined to elaborate. They said there were several issues unresolved and not covered in the preliminary accord.

The two sides have tentatively agreed to the U.S. industry's goal of increasing to 20% from 10% its share of Japan's $9.6-billion market for computer chips by 1990, according to the newspaper, which said it obtained an outline of the draft agreement. However, the article said, a market-share accord will not be included in the formal agreement but instead will be addressed in a "side letter" to be circulated privately to U.S. and Japanese computer chip makers.

The dispute over the chips has become one of the most sensitive issues between Japan and the United States.

The Americans have accused the Japanese of unfairly limiting access to Japan's domestic market for U.S.-made semiconductors and of selling Japanese semiconductors at below-market cost in the United States, a practice known as "dumping."

The report said Japan will establish a company-by-company price monitoring system on the cost and export prices of eight kinds of chips.

However, 1-megabit chips, the coming generation of memory chips, apparently will not be covered by the agreement.

Japan will help U.S. companies double their market share by setting up a top-level organization in Japan to provide sales assistance and expertise on the Japanese market, the Financial Times said.

The U.S. government will suspend its two anti-dumping cases and its unfair trade action against Japan, the newspaper said, but will be able to call immediate consultations with Japan if it believes that chips again are being dumped in the United States.

The newspaper said the agreement also calls for the monitoring of Japan's semiconductor export prices to countries other than the United States, one of the most crucial issues to the U.S. industry.

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