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Chip Makers Say Japan Is Ignoring Pact : Dumping Reduced but U.S. Access to Market Reported Smaller

September 22, 1987|Associated Press

WASHINGTON — U.S. semiconductor makers told the Reagan Administration today that Japan still has not complied with a year-old pact on computer chip trade, despite the imposition of U.S. sanctions last spring.

The Semiconductor Industry Assn. said U.S. companies' share of the Japanese market "is actually below the level which existed before the agreement was signed."

Failure of the Japanese to live up to the agreement in full has cost U.S. companies $162 million in potential lost sales, the industry group said in a report marking the anniversary of the U.S.-Japanese agreement.

The government of Japan has denied repeatedly that it has violated the pact.

Market Access Included

The agreement called for Japan to halt the "dumping," or deliberate underpricing, of computer chips in U.S. and other markets, and to give American companies more access to lucrative Japanese markets.

Last April, the Administration imposed $300 million in penalty tariffs on selected Japanese electronic products to protest alleged Japanese failure to comply with the agreement.

During the seven-nation economic summit in Venice in June, President Reagan lifted $51 million of the tariffs as a good-will gesture to Japan, citing some movement on the part of the Japanese toward complying with the agreement.

But, in a letter to Reagan, industry association President Andrew A. Procassini said the Administration should consider re-applying the sanctions in full "if there is no movement toward full compliance."

U.S. Halts Scrutiny

As part of the September, 1986, agreement, the United States promised to suspend investigations that could have led to stiff penalty duties on Japanese computer chips in exchange for the Japanese vows to raise prices and promote U.S. sales in Japan.

"The U.S. government has lived up fully to its obligations under the agreement," Procassini said. "Japanese government compliance, however, has been incomplete."

The industry group conceded that Japan has reduced its selling of Japanese computer chips in this country at bargain-basement prices, complying with one part of the agreement.

Dumping Reduced

And, the organization said, there has been "a gradual reduction" in the dumping of chips in markets outside the United States.

However, the report claimed that Japan has done nothing to uphold its promise to give U.S. semiconductor manufacturers more access to Japanese markets.

The current U.S. share of the Japanese market is 9%, "two percentage points lower than the level expected by this first anniversary of the agreement." The U.S. share as recently as 1985 was 9.4%, the report contended.

This compares to the roughly 50% or more share that the U.S. industry has in all other national markets, the report claimed.

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