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Chip trade talks deadlocked

Despite today's deadline, U.S. and Japanese negotiators are at a standstill over semiconductor trade.

U.S. and Japanese trade negotiators are at a standstill in talks intended to resolve a dispute over a semiconductor trade agreement, despite a deadline that expires today.

U.S. negotiators want to renew a provision of the 10-year-old agreement in which the Japanese promised to increase the foreign share of Japan's chip market. U.S. officials also want the Japanese government to continue monitoring the portion of American chips bought by Japanese businesses. Foreign firms control 30 percent of Japan's semiconductor market.

But Japanese officials refuse to continue counting chip sales and instead propose that a global forum be established to monitor semiconductor trade policy. The proposal has won the backing of European officials.

Japanese Prime Minister Ryutaro Hashimoto and President Clinton have instructed their negotiators to wrap up a deal by today.

U.S. officials were displeased with the latest Japanese proposal, which Japanese negotiators insist is their final offer, according to a Wall Street Journal report. The officials fear that, without monitoring, Japanese semiconductor makers will revert to a policy of closing off domestic markets to foreign competitors and overseas dumping of Japanese chips.

U.S. negotiators said Tuesday that the Japanese will have to offer more concessions before an agreement is reached. The officials would rather let the current agreement expire and use the threat of economic sanctions as leverage if the trade situation worsens in the future.

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