U.S. SENATORS SAY SANCTIONS LIKELY ON MICROCHIPS
The United States will likely impose
sanctions soon on imports of Japanese microchips, senators said
today after a private meeting with Commerce Secretary Malcolm
Baldrige.
    Although the senators said Baldrige told them no decision
would be taken until a final determination is made on whether
Japanese microchips were dumped in the United States, they said
they were virtually sure Japan would face penalties.
    President Reagan's trade policy advisory group, of which
Baldrige is a member, will meet on the issue Wednesday.
    "I am confident we will see action taken," Sen. John McCain,
an Arizona Republican, told reporters.
    "I am expecting sanctions at least, and even more than
sanctions," Sen. Pete Domenici, a New Mexico Republican, said.
    The senators, several congressmen and U.S. semiconductor
industry representatives met with Baldrige and State Department
officials to discuss Japan's alleged violations of a September
1986 agreement to stop dumping its microchips in the United
States and other countries.
    They recommended Japanese firms be penalized through
tariffs or import duties over the next six to 12 months for
continuing to dump microchips. The violations were worth 100
mln dls to the Japanese semiconductor industry, they said.
    Asked if Baldrige intended to recommend sanctions, Sen.
Pete Wilson told reporters, "The clear import of what he said is
that there will be."
    "Japan can't just say they will comply. We think sanctions
must be applied," for past violations of the agreement, the
California Republican said.
    The semiconductor industry produces microprocessor chips
which are used in high technology products ranging from radios
to defence missile guidance systems.
    Sen. James McClure, an Idaho Republican, said Baldrige told
them the administration had not made a final determination that
Japanese companies had dumped semiconductor microchips below
the cost of production in the United States or other countries.
    But McClure said senators told him, "There is no doubt
dumping is going on," based on evidence such as invoices of
purchases of the Japanese products.
    The two countries signed a pact last September in which
Japan agreed to stop selling its microchips in the United
States and other countries below production costs and to allow
the U.S. semiconductor industry access to the Japanese market.
    In return, the United States waived its right to impose
import duties on the Japanese microchips.
    Japanese officials have said they have lived up to the pact
and have asked Japanese chip-makers to further slash output to
save the pact.
    Japan has frequently been the target of congressional
discouragement over last year's record 169-billion-dlr trade
deficit. Tokyo had a 59-billion-dlr surplus with the United
States last year and had large surpluses with other countries.
    The Senate yesterday unanimously passed a resolution
calling for action against Japan for violations of the pact
since September. The resolution will be introduced in the House
next week by Rep. Bob Matsui, a California Democrat.
 Reuter
