JAPAN SAYS U.S.-JAPAN MICROCHIP PACT WORKING
Japanese officials sought to convince the
U.S. That a U.S.-Japan pact on microchip trade is working ahead
of an April 1 deadline set by the U.S. For them to prove their
case.
    "We are implementing the agreement in good faith and the
situation does not run counter to the pact," Osamu Watanabe,
Director of the Ministry of International Trade and Industry's
(MITI) Americas and Oceanic Division, told foreign reporters.
    "The effects of the measures we have taken and are taking
are emerging in the market place," he said.
    U.S. Trade officials have repeatedly accused Japanese
microchip makers of violating the pact by continuing to sell at
below cost in markets outside Japan and the United States.
    The agreement, signed last September, aimed at halting
predatory Japanese pricing policies and increasing U.S.
Semiconductor firms' access to the Japanese market.
    The comments by MITI officials followed a call by Prime
Minsiter Yasuhiro Nakasone to clear up any misunderstandings on
the U.S. Side about the pact, Watanabe said.
    Yukio Honda, director of MITI's Industrial Electronics
Division, denied that Japanese chipmakers were selling at below
cost in third countries.
    MITI's call to Japanese chip makers last month to cut
production of key memory chips in the first quarter of this
year has begun to dry up the source of cheap chips for sale in
the non-regulated grey market, Honda said.
    "The grey market exports from Japan are shrinking now, but
in contrast U.S. And South Korean companies are expanding
market share because of their cheaper prices," Honda said.
    MITI plans to take further steps to reduce the excess
supply of inexpensive chips which developed in Japan after the
pact was formed because of a slump in Japanese semiconductor
exports to the United States, he added.
    The ministry will soon release its supply-demand guidelines
for the second quarter and suggested production volumes are
likely to be lower than that for the first quarter, he said.
    Despite businessmen's ingenuity in finding ways around any
artificial controls, regulation of supply and demand should
bring positive results, Watanabe said. "I am optimistic," he
added.
 REUTER
