Newspaper article St Louis Post-Dispatch (MO)

Gloves Are off in Trade Fight U.S. Takes Step to Enforce Deal with Japan

Newspaper article St Louis Post-Dispatch (MO)

Gloves Are off in Trade Fight U.S. Takes Step to Enforce Deal with Japan

Article excerpt

With applause from Congress, the U.S. administration officially accused Japan on Tuesday of breaking a 1989 trade agreement to open its markets to American-made cellular telephones.

"We have said many times that we are committed to enforcing our trade agreements and achieving results," said Mickey Kantor, the U.S. trade representative. "I am today taking steps to make sure that Japan lives up to the agreement."

The first step was Kantor's announcement that the United States had determined that Japan violated the agreement on cellular phones. What comes next - amid concerns of a trade war - depends on the Japanese response to the accusation and on the fate of separate so-called "framework" trade talks that collapsed late last week.

Kantor said the United States would publish in the next 30 days a list of Japanese products that could be subject to punitive tariffs of up to 100 percent. Kantor refused to say what products would be targeted but he said the total would be "several hundred millions of dollars," equal to the cellular-phone sales lost by Motorola.

Both the United States and Japan are threatening to take their cases to the General Agreement on Tariffs and Trade, or GATT, for settlement by the world trade organization. Kantor said he would publish within a month a list of sanctions that the United States might invoke against Japan if it does not agree to open its markets to more American cellular phones. The most likely trade sanction would be higher tariffs on imports of Japanese-made cellular phones.

But with Japan threatening retaliation, some trade experts view the tough talk on both sides as posturing and maneuvering around the broader framework negotiations.

Sen. John C. Danforth, R-Mo., praised Kantor for going after the Japanese under the 1989 phone agreement. "Today's decision means we're not willing to be the world's doormat in trade," Danforth said. "Today's message is crystal clear: If you make an agreement with the United States, be prepared to honor it."

Danforth is an author of a lapsed trade law, called the 301 Provision, that the administration is considering reviving. …

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