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Japan Met Goal on Foreign Chips in 4th Quarter

March 19, 1994|JAMES GERSTENZANG | TIMES STAFF WRITER

WASHINGTON — The United States' roller-coaster trade relationship with Japan tentatively moved into an upswing Friday, with the disclosure that Japanese industries purchased slightly more than 20% of their semiconductors from foreign suppliers during the final three months of 1993.

The foreign share of the market, a gain of more than two percentage points over the previous quarter, returns Japan to compliance with an informal target established with the United States in 1986 and renewed in 1991.

But the Japanese have hit the 20% target, intended to increase U.S. access to the Japanese computer market, only once in the past, and U.S. officials said the recent purchase level must be sustained.

The semiconductor agreement is unrelated to the more contentious and unresolved questions surrounding the broad scope of U.S.-Japanese trade that are encompassed in the stalled "framework" talks, which fell apart five weeks ago.

Japan objected to the Clinton Administration's insistence that objective criteria be established to measure increases in U.S. access to the Japanese market for automobiles and auto parts, medical equipment, telecommunications equipment and insurance.

But U.S. trade officials took the progress being eked out by foreign manufacturers of semiconductors as a sign of positive movement and one that suggests Japanese government and industry are not strictly obstructionist.

"It shows (that) when they put their minds to it, things really happen," a senior U.S. trade official said. "Hopefully, it bodes well for a major proposal at the end of the month."

Japan has said it will produce a plan by the end of March to get the framework talks back on track.

The U.S. trade representative's office announced that Japanese companies purchased 20.7% of their semiconductors--the microcircuits that are the heart of computer technology--from foreign producers during the final quarter of 1993. During the previous quarter, the figure was 18.1%.

The Semiconductor Industry Assn. in San Jose said the improved fourth-quarter report brought the yearly average to 19.4%, an increase of two percentage points over 1992. Roughly 85% of Japan's foreign-made computer chips were manufactured in the United States, according to Kevin Brett, a spokesman for the association.

Sen. Max Baucus (D-Mont.), chairman of the Senate Finance international trade subcommittee, said the figures released Friday prove that "setting benchmarks and applying pressure does work."

"Unfortunately, Japan seems to play by the rules only when the referee is watching," he said.

With the breakdown of the framework talks, the Clinton Administration has tried, step by step, to increase pressure on Tokyo, announcing earlier this month that it was reinstating a provision in U.S. trade law that would allow it to eventually impose sanctions on Japan for unfair trade practices.

In Japan, meanwhile, the trade minister rejected U.S. pressure for the government to guarantee his nation's auto makers' plans to increase imports of U.S.-made parts. Horoshi Kumagai also was reported to have said that he favors getting rid of the voluntary limits Japan has placed on its exports of automobiles to the United States.

"Has the U.S. government shown any appreciation for our efforts on earlier voluntary export restraints? No," Kumagai said to reporters.

At its center, the dispute between the two nations is over the size of the Japanese trade surplus with the United States--$59.3 billion last year--and over the difficulty U.S. companies have had in selling their products and services in Japan.

The 1986 semiconductor agreement is just one of the government-to-government pacts intended to pry open the Japanese market.

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