BRITAIN WARNS JAPAN OVER TRADE ROW
British corporate affairs minister Michael
Howard told Japan to resolve the row over the U.K. Firm Cable
and Wireless Plc's <CAWL.L> shareholding in a new Japanese
telecommunications company or face an abrupt deterioration in
trade relations.
    In meetings with both the foreign and telecommunications
ministers Howard said he expressed deep concern about the way
Tokyo had handled the dispute and about the continuing trade
imbalance between the two countries.
    "I put it to the (post and telecommunications) minister that
I was sure he did not want to be responsible for an abrupt
deterioration in the trading relations of our countries which
would have widespread reverberations elsewhere in the world,"
Howard told reporters.
    "He listened very carefully and I have little doubt the
message got home," he added.
    British frustration over the lopsided trade balance -
nearly six billion dlrs in Japan's favour last year - has
reached boiling point over the telecommunications issue, Howard
said.
    Howard has accused Japan of trying to shut out Cable and
Wireless from having a major role in the international
telephone market in Japan.
    "I want a fair crack of the whip for Cable and Wireless as I
want a fair crack of the whip for Britain generally in trading
relations," Howard said. "We simply aren't prepared to continue
to accept the imbalance which has been the position for such a
long time."
    Post and Telecommunications Ministry officials were unable
to comment on Howard's meeting with their minister.
    But Foreign Ministry officials said Foreign Minister
Tadashi Kuranari said that British exports to Japan are
increasing, but acknowledged the continuing imbalance in trade.
    Kuranari said he wants everyone in the telecommunications
dispute, including Cable and Wireless, to be satisfied.
    Howard told reporters that Britain was actively considering
possible retaliatory measures if it did not get its way on the
telecommunications issue.
    "There are measures which are under consideration if we
continue to suffer from the imbalance in our trading relations,"
he added, but gave no details.
    He said he had received a reassuring response from the
Japanese he has spoken with.
    "But of course we've had reassuring signs from the Japanese
for quite some time," he added. "What I've made plain is we
expect to see action."
    Howard ruled out using powers in Britain's Financial
Services bill to retaliate against unfair trade practices.
Those powers, which allow London to ban foreign financial firms
like banks from Britain, are designed to ensure U.K. Firms
equal access to overseas financial markets.
 REUTER
