JAPAN HAS LITTLE NEW TO OFFER IN MICROCHIP DISPUTE
The Japanese government appears to have
little new to offer to settle a dispute with the U.S. Over
computer chips, trade analysts and government officials said.
    The U.S. Has threatened to impose tariffs worth up to 300
mln dlrs on Japanese electronics exports to the U.S., In
retaliation for Japan's alleged failure to keep a pact on the
microchip trade signed last September.
    A Foreign Ministry official told Reuters "Japan has done
what it can, and now we must persuade the United States to wait
for those steps to take effect."
    The U.S. Alleges that, in defiance of the September
agreement, Japan is still selling microchips at below cost in
non-U.S. Markets and refusing to open Japan further to U.S.
Chip sales. U.S. Tariffs are due to take effect on April 17.
     Analysts noted Japan's Ministry of International Trade and
Industry (MITI) has already ordered chipmakers to cut
production in order to dry up the source of cheap chips sold in
third countries at non-regulated prices.
    "I'm not sure MITI can do much more than it has," said
Jardine Fleming (Securities) Ltd analyst Nick Edwards.
    A MITI official said the Ministry was not planning to call
for production cuts beyond those already sought, although it
would continue to press chip users to buy more foreign goods.
    Spokesmen for some Japanese electronics firms said they
would consider buying more U.S. Chips. But a Matsushita
Electric Industrial Co spokesman said a rapid increase in
imports was not likely.
    Most analysts said Japanese exporters would be hard hit if
the United States did implement the tariffs, which would be
levied on consumer electronics products rather than on
microchips themselves.
    "If the tariffs remain in place for any length of time,
there will be complete erosion of exports to the United States,"
said Tom Murtha, analyst at James Capel and Co.
    "The Japanese electronics industry is too powerful to be
stopped altogether, but recovery for the industry will be
delayed for another year," he said.
    Some analysts said tariffs would also harm U.S. Industry by
stepping up offshore production and by reducing demand in Japan
for semiconductors U.S. Firms are trying to sell here.
    "The American approach is full of contradictions," Jardine
Fleming's Edwards said.
    "If they want to expand (U.S.) exports, the last thing they
want to do is hit the makers of the final products because that
hurts the final market," Edwards said.
    But other analysts said the dispute reflects not just U.S.
Concern over what it sees as a strategic industry, but also
frustration with Japan's vast trade surplus. Some analysts
argued that to solve the semiconductor problem Japan may have
to take action beyond that pledged in the semiconductor pact.
    Carole Ryavec, an analyst at Salomon Brothers Asia Ltd,
said "The major overall issue is to stimulate the domestic
economy and move away from an export-dependent economy."
 REUTER
