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Japanese Firm, Motorola Near an Agreement

March 11, 1994|DAVID HOLLEY and TERESA WATANABE | TIMES STAFF WRITERS

TOKYO — Negotiators have reached an apparent breakthrough in a bitter American-Japanese dispute over access to Japan's cellular telephone market, officials said today.

The controversy, which involves Motorola Inc. and a Japanese telecommunications firm, is the most prominent of several trade conflicts between Washington and Tokyo, any of which could lead to American sanctions against Japanese goods.

"We are reaching the final stages of agreement," Miyuki Ochi, a representative of Nippon Motorola Ltd., said today.

Motorola's negotiating counterpart, Nippon Idou Tsushin Corp. (IDO), has agreed to substantially expand the number of relay stations needed for Motorola's cellular service, Ochi said, noting that final details of the deal have yet to be worked out.

While the talks between Motorola and IDO have occurred between private companies, the two governments have gotten involved because of a 1989 Washington-Tokyo agreement on the long-festering issue of Motorola's access to the Japanese market.

U.S. Trade Representative Mickey Kantor said Wednesday that Washington expects the Japanese government to provide guarantees that any IDO-Motorola agreement will be fully implemented.

Takenori Kanzaki, the Japanese minister of posts and telecommunications, expressed satisfaction at the prospective agreement today, telling a news conference that the two firms are putting final touches on the deal, and "it's possible a formal agreement will be reached today."

A cellular phone accord would be an important step--but only a step--toward easing U.S.-Japan trade tensions.

On Thursday, Secretary of State Warren Christopher, on a Tokyo visit, accused Japanese officials of breaking their promises by failing to negotiate a new trade agreement with the United States. "I said simply that great nations keep their commitments," Christopher said after meetings with Japanese Prime Minister Morihiro Hosokawa and Foreign Minister Tsutomu Hata.

In July, during President Clinton's trip here, Japan promised to increase imports and bring about a "highly significant decrease" in its $120-billion-a-year trade surplus with the rest of the world. But "no one would agree with the contention that Japan has met its commitments," Christopher said Thursday.

His harsh words appeared to represent an effort to put Japan on the defensive in the conflict over the countries' trade relationship. They also reflected the Clinton Administration's desire to shift public debate away from details of the trade dispute and toward the question of whether Japan has violated its promises.

Observers generally credit Washington's tough stance as a factor in IDO's willingness to reach agreement on the cellular phone dispute, largely on American terms.

The dispute centers on American charges that Japan has maintained obstacles to Motorola becoming competitive in the cellular phone service for the heavily populated corridor stretching from Tokyo to Nagoya.

Motorola holds about half the cellular phone market in Osaka, where it has not faced similar obstacles. But it has only a tiny fraction of the market in the Tokyo-Nagoya corridor, where service is dominated by phones using a different technology developed by Nippon Telegraph & Telephone Corp. (NTT).

IDO provides infrastructure for both the NTT and Motorola systems. The current negotiations are focused on how quickly IDO will expand its Motorola-compatible infrastructure to be comparable to that used by the rival NTT system.

IDO's apparent agreement to substantially expand the service area, compatible with Motorola's system, is considered key toward resolving the thorny issue.

Meantime, in a speech delivered today to the Japan Assn. of Corporate Executives, Christopher pressed hard at the theme that America's huge trade imbalance with Japan cannot be allowed to last.

"For the two largest economies in the world, agreeing to disagree is not good enough," he declared. "Acknowledging our economic differences may be a starting point for finally resolving them, but it is certainly not good enough. . . . I came to Japan to make sure our message is understood: Your government needs to take firm action to honor the commitments it made (last July)."

Times staff writers Jim Mann and Sam Jameson also contributed to this report.

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