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U.S., Japan End Cellular Feud; Clinton Hails Pact : Trade: The whole bilateral business picture brightens. White House sees Motorola accord as a model for future deals.


TOKYO — Five days before a deadline for U.S. retaliation, Japan and the United States ended a bitter dispute over access to Japan's cellular telephone market Saturday, raising prospects for a resumption of broader talks that could ease trade tensions.

The agreement aims to allow Motorola Inc. to compete on an equal basis with Japanese companies in providing cellular phone service in the heavily populated region stretching from Tokyo to Nagoya.

White House officials portrayed the agreement as a model for future trade pacts because it commits the Japanese government to specific business-related targets, one of the central goals of the Clinton Administration's trade policy.

"This is a big win for everyone," said President Clinton, who called the agreement a breakthrough in U.S.-Japanese trade negotiations.

"Workers in the United States will gain because the agreement means more demand for cellular telephones and related equipment made in America," Clinton said. "Japanese consumers win because they'll have access to better service and better technology at better prices."

Takenori Kanzaki, the Japanese minister of posts and telecommunications, expressed hope that "the settlement will translate into maintenance and further development of the good economic relationship between the two countries."

The dispute centered on a 10-year effort by Motorola to sell cellular telephones in the 155-mile corridor from Tokyo to Nagoya. Motorola had maintained that such sales had been blocked as a result of foot-dragging by its local partner, the Nippon Idou Tsushin Corp. That company, known as IDO, had been assigned the partnership by the Japanese government.

As a result of the new agreement, U.S. Trade Representative Mickey Kantor said, the White House would lift a threat of trade sanctions against Japanese products, which had been announced in February. The deadline for unveiling specific retaliatory measures, which could have included sharp tariff increases on Japanese goods sold in the United States, was Thursday.

Asked whether the agreement amounted to a "total and unconditional surrender" by the Japanese, Kantor replied: "It'd be unfortunate to describe it that way."

He said that as a result of specific commitments included in the agreement, "we think we've reduced . . . all of the stumbling blocks we can imagine" that stood in the way of Motorola gaining the right to compete on even turf with Japanese companies offering cellular telephones and services.

While the agreement spells out the number of base stations, relays and radio frequencies that will be available to Motorola, it does not guarantee that the U.S. company will gain a specific percentage of the Japanese market. But the availability of these crucial elements in cellular telephone service, which had been blocked in the past, should make the company more competitive with local Japanese firms.

Arnold Brenner, Motorola executive vice president, said at a Tokyo news conference that the new measures will boost the company's capacity from about 150,000 subscribers to about 450,000. The value of additional sales as a result of the deal "will be measured in the hundreds of millions of dollars," he said.

The settlement seems to be "an omen of things to come," he said.

"Both sides have said they don't want a trade war; they don't want sanctions. The fact that the Japanese were willing to negotiate the deal--I hope it will be good for both countries."

Motorola officials said the agreement will protect "hundreds" of manufacturing and engineering jobs. The company builds its cellular telephones in Illinois.

As a result of the agreement, about 95% of the population in the Tokyo-Nagoya corridor will be able to sign up for cellular service by September, 1995, at least two years earlier than it would have otherwise.

The Motorola negotiations, conducted in Tokyo, were independent of broader U.S.-Japanese talks covering other trade disputes. The wider talks, agreed to last July, are intended to provide greater access for American companies trying to sell automobiles and auto parts, insurance, medical equipment and other telecommunications gear in Japan.

Those talks broke down in February after months of bitter debate. Washington has insisted that the two sides determine an acceptable way to measure progress in opening the Japanese market, and Tokyo argues that such an approach amounts to managing trade in a way that runs counter to free trade principles.

U.S. Ambassador Walter F. Mondale said Saturday that while the cellular telephone dispute was never a formal part of the "framework" trade talks, its resolution is "an encouraging example of what can happen when we get rid of the sterile debate."

Deputy Foreign Minister Sadayuki Hayashi is scheduled to visit Washington next week to meet with W. Bowman Cutter, deputy assistant to the president for economic policy, to discuss resuming the stalled trade talks, the Japanese Foreign Ministry said Friday.

Holley reported from Tokyo and Gerstenzang from Washington.

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