Newspaper article St Louis Post-Dispatch (MO)

Japan Warns U.S. against Sanctions Retaliation Would Follow, Premier Says

Newspaper article St Louis Post-Dispatch (MO)

Japan Warns U.S. against Sanctions Retaliation Would Follow, Premier Says

Article excerpt

Prime Minister Morihiro Hosokawa warned the United States on Saturday against imposing trade sanctions on Japan after the failure of trade talks.

His top aides said such action would cause Tokyo to retaliate with sanctions on American products.

"I very much hope the U.S. will refrain from such action," Hosokawa told reporters before leaving Washington, a day after the collapse of trade negotiations between the United States and Japan.

With U.S. officials already threatening to impose some sort of punitive measure on Japan - now that Japan has refused to accept American demands for more open markets - the world's two biggest economies appeared to be poised on the edge of a trade war.

Hosokawa sounded a polite but firm warning to his American hosts at his news conference Saturday morning, which followed a breakfast at the White House with President Bill Clinton.

He said that under no conditions would his government drop its resistance to "numerical targets" for opening Japanese markets, the issue that has been the key stumbling block in the negotiations.

The Americans insist that Japan agree to certain numerical indicators that will prove whether it is opening its markets in autos, telecommunications, insurance and medical equipment.

The Japanese refuse to accept such indicators, saying that would constitute "managed trade," and that this is why the talks collapsed.

"We will not modify our position in that regard," Hosokawa told reporters.

Asked about reports that the United States was considering trade sanctions on Japan to pry open closed markets, Hosokawa not only said he hoped that the United States would refrain from such a move, but also pointed out that "that would be a contravention of GATT," the General Agreement on Tariffs and Trade.

He left the clear indication, amplified by some of his aides, that Japan would respond to any attempt by the United States to slap tariffs on Japanese imports by taking the United States to a GATT tribunal, or by imposing its own sanctions.

Japan has threatened to take the United States to a GATT tribunal for some 20 years, each time the United States threatened or took trade action. …

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