The Japanese government appears to be losing its patience in negotiating a semiconductor trade agreement with the United States that expires at the end of this month.
The Japan External Trade Organization today issued a statement criticizing the decade-old agreement, which the United States is seeking to renew. The organization called the accord "inconsistent with free trade and open markets" and denounced any attempt to extend or renew the semiconductor pact in the second strongly worded statement on the issue in the past two weeks.
The accord has prevented Japanese companies from dumping semiconductor products overseas and has helped foreign companies gain more than 30 percent of the Japanese market share. American companies compose two-thirds of that 30 percent.
If the two sides cannot reach common ground by July 31, the semiconductor market will revert back to natural forces, without any bilateral share monitoring or anti-dumping provisions, and leave American and other companies to fend for themselves.
American officials had recently expressed optimism after the recent G-7 economic summit, when Prime Minister Ryutaro Hashimoto pledged to President Clinton that the Japanese government would take over negotiations from the private trade organization Electronic Industries Association of Japan. Since then, however, relations have become increasingly tense.
"The major players on the Japanese side have to get their act together," said Jeff Weir, spokesperson for the Semiconductor Industry Association. "Hashimoto and MITI [Ministry of International Trade and Industry] have some things to work out. It's Keystone Kops, from my point of view."
The Japanese retorted that U.S. officials are "spinning" the Japanese position as fragmented and confused only because they don't want to agree to the Japanese compromise of forming a global industry forum that would include the European Union to observe trade relations but eliminate specific quotas.
Senior trade representatives from both governments are meeting this weekend and early next week at the Asia-Pacific Economic Cooperation conference in New Zealand. There could be progress "if the United States brings something new and creative to the table," said Tom Steindler, counsel to the Electronic Industries Association of Japan. "Otherwise, I think we're pretty far apart."