New U.S.-Japan Chip Pact Approved
United States and Japanese negotiators here initialed a new agreement today on American access to the Japanese market for semiconductor chips, provoking criticism in Congress.
The agreement settled the last big single-industry dispute pending between the countries. A different team of negotiators reached an agreement on Saturday in Tokyo to expand American access to the Japanese public construction market.
The semiconductor agreement must be approved by the Japanese Cabinet and possibly by the United States Cabinet, said S. Linn Williams, the deputy United States trade representative. Carla A. Hills, the chief trade representative, and the Japanese Ambassador, Ryohei Murata, are tentatively scheduled to sign the accord in Washington next Tuesday. Similar Pact in 1986
Under the new agreement, which is similar to one reached in 1986 that was to expire on July 31, the target for the share of all foreign companies in the Japanese market was kept at 20 percent. Although this target has not yet been met, the new agreement contained no timetable for reaching this level.
With the agreement, the United States will also suspend some import duties imposed on some Japanese products by the Reagan Administration in 1987 when the foreign, mostly American, share of the Japanese chip market failed to reach 20 percent despite the 1986 agreement.
Senator Max S. Baucus, Democrat of Montana, the chairman of the International Trade subcommittee, praised the agreement but criticized the suspension of the sanctions. "Japan did not live up to its commitments under the 1986 agreement," he said in a statement. "The commitments have still not been met."
But Mr. Williams said lifting the sanctions was appropriate because the Japanese Government had responded to United States concerns by putting pressure on industry in the last two years to buy more American semiconductors.
Representative Richard A. Gephardt, Democrat of Missouri, the House majority leader, said in a statement, "The Administration was more interested in reaching any agreement than one that produced real results." He added later, "I don't see why we should reward Japan for failing to live up to an agreement they've already signed."
Mr. Williams and Naomichi Suzuki, the vice minister for international trade at Japan's Ministry of International Trade and Industry, struck the final agreement at a 6:30 P.M. meeting Monday, a participant in the talks said. Both men initialed the agreement this morning after their staffs prepared the final documents and after the Japanese negotiators had obtained Tokyo's approval.
The new agreement is subject to review after three years, and will automatically stay in effect for two more years unless both countries agree to cancel it, Mr. Williams said at a news conference.
Both countries also agreed that their companies would keep detailed records of the price and volume of their shipments to each other and to third countries. This would make it possible to conduct much faster investigations into any charges that semiconductors were being sold in foreign markets for less than their cost of production, said Eric I. Garfinkel, the Assistant Secretary of Commerce for import administration.
Correction:  June 8, 1991, Saturday
Articles in Business Day on Tuesday and Wednesday about an agreement between the United States and Japan to extend regulations covering trade in computer chips referred incorrectly to a provision. Only Japanese companies will be required to keep detailed records of prices and volumes of semiconductors shipped; United States companies are not subject to the requirement.