Clinton, Hashimoto lay chips on table

President Clinton and Japanese Prime Minister Ryutaro Hashimoto met privately to discuss an extension of the much-wrangled semiconductor trade agreement between the two countries during the G-7 economic summit in France, according to The New York Times.

The agreement, which was made with Japan during the Reagan administration, set a target for American penetration of the Japanese chip market as a way to balance trade inequities. The United States contents that the goals of the original agreement, which expires July 31, have not been met and that the accord should be extended. But the Electronic Industries Association of Japan and Japanese government officials argue that the goals have been reached and that the industry should return to a free market.

The two leaders met accompanied by only a translator during their half-hour mini-summit at the talks in Lyon. American officials later expressed optimism that their Japanese counterparts saw some benefits in reaching an accord.

The two sides' next scheduled meeting is in mid-July, when U.S. trade representative Charlene Barshevsky and Japanese trade minister Shunpei Tsukahara are set to meet at the Asia Pacific Economic Cooperation forum.

Meanwhile, Japan's Electronic Industries Association has proposed an international pact that would draw the European chip industry into the negotiations, according to the Japanese daily Nihon Keizai Shimbun.

Meeting with Japanese association officials this week in Tokyo, Jurgen Knorr, the head of the European Electronic Component Association, said that the Japan-U.S. deal violates World Trade Organization rules and that he would urge the United States to join multilateral talks, the report said.

The agreement will be of particular importance as President Clinton looks to California and its high-tech industries for crucial support in this year's election. Silicon Valley was an important source of campaign funding for Clinton in 1992, but recent reports have indicated discontent with Administration economic policies among high-tech executives. The chip industry has suffered two consecutive difficult quarters with no real relief in site.

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