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Subject: Trade Talks' Focus Turns To Japanese; Rice Imports Could Snag GATT
Date: Tue, 24 Nov 92 04:42:49 EST
Message-ID: <22.1992Nov24.044249@AmeriCast.com>

Trade Talks' Focus Turns To Japanese; Rice Imports Could Snag
GATT Revisions<By Stuart Auerbach<Washington Post Staff Writer=

 Japan, the country that has gained the most from the world's
free trade system, now finds its outright ban on rice imports
under a strong spotlight.

 For the past six years, Japan has been able to hide behind the
transatlantic battle over farm subsidies between the United
States and the 12-nation European Community.  But now that the
subsidies issue has been settled, the world's attention has
turned to the main arena of the 108-nation talks on revitalizing
the General Agreement on Tariffs and Trade, known as GATT, which
was created in the wake of World War II to set rules for interna-
tional commerce.

 These talks to broaden and strengthen the rules are expected to
inject new vitality into the recession-stricken global economy,
spurring as much as $200 billion a year in new commerce world-
wide.

 Taking advantage of the GATT rules of free trade, Japan has em-
erged as an economic superpower. Now, as a senior U.S. trade of-
ficial said yesterday, "the moment of truth is approaching" and
the entire Uruguay Round - as the current GATT talks are called -
could collapse if Japan holds firm to its import ban on rice, as
Prime Minister Kiichi Miyazawa vowed last weekend that it would.

  "Maybe we won't have a deal" on the Uruguay Round if Japan
doesn't end its ban on rice imports, the senior U.S. official
said starkly.

 While France is still balking at the deal struck Friday between
the EC and the Bush administration, U.S. and European diplomats
here do not believe the French government will scuttle the farm
trade agreement. To do so, they said, would tear apart France's
relations with the rest of Europe and especially its new close
ties with Germany, which, despite its own problems with protected
farmers supports the Uruguay Round to help its export-centered
manufacturing industries.

 The diplomats speculated that the French government's vociferous
complaints are partly for domestic consumption - to persuade an-
gry farmers their interests are being protected - and partly to
wring concessions from the United States and other EC members in
other areas of the trade talks.

 The remaining issues are very complex, and in many cases U.S.
business interests are arrayed against the Europeans.

 But nowhere is the pressure greater than in Tokyo, where banning
foreign rice has been elevated to a national obsession, although
executives of Japan's manufacturing giants in electronics and au-
tomobiles, which have become global powerhouses because of open
markets in the United States and elsewhere, fear continuing a ban
on rice imports will rebound against them.

 "If the Japanese stonewall the Uruguay Round, it will be very
tough on them because their trade surplus is just soaring out of
sight. The world is just waiting for them to make a mistake,"
said Michael B. Smith, a former deputy U.S. trade representative
who is now president of SJS Advanced Marketing Strategies, a
Washington trade consulting firm.

  Among U.S. industries, a general fear emerged yesterday that
their interests may be abandoned at the last minute by adminis-
tration negotiators in a rush to strike a deal while President
Bush remains in office.

 "Our concern is that any good professional wants to finish a job
and we assume that (U.S. Trade Representative) Carla Hills wants
to finish the Uruguay Round," said Michael C. Maibach, director
of government affairs for Intel Corp. "It will be a darn shame
after waiting six years if our industry doesn't get the open
markets."

 U.S. electronics manufacturers want Europe to eliminate tariffs
on products such as semiconductors, semiconductor manufacturing
equipment and other advanced technology products.  "Manufacturing
and advanced technology have to be at least as high a priority as
oilseeds," said Maibach, referring to the farm products at the
heart of the U.S.-EC fight.

 Further, the U.S. motion picture industry threatened last week
to fight any Uruguay Round agreement that allows the EC and Cana-
da to continue quotas on the screening of American films on
television or in movie theaters. Jack Valenti, chairman of the
Motion Picture Association of America, sent the U.S. trade
representative a letter detailing opposition to any agreement
that does not do away with quotas for  the industry's overseas
business.

 The letter, signed by the heads of seven U.S. studios, noted
that their industry's interests were "swept aside by last-minute
decisions of our government" in the free trade pact with Canada
and the North American Free Trade Agreement just concluded with
Mexico and Canada.

 U.S. industries from semiconductors to steel oppose the draft
agreement, which makes it harder to stop foreign producers from
"dumping" in the United States - selling products at cut-rate
prices below manufacturing costs. Willard C. Workman, interna-
tional vice president of the U.S. Chamber of Commerce, said the
draft accord by GATT's director general, Arthur Dunkel, "tilts
the balance in the dumping code toward the ones that are being
charged with violating the trade rules and prejudices those in-
dustries that are being hurt."

 "We will not support the current Dunkel draft" on dumping, said
Intel's Maibach.

 The United States and Western Europe are on the same side of
that issue, with the changes in the dumping rules being pushed
largely by countries that have been accused most often of that
practice: Japan, South Korea, and developing nations such as In-
dia, Hong Kong, Taiwan, Singapore, Malaysia, Indonesia and Thai-
land.

 In another difference between U.S. manufacturers and developing
nations, semiconductor and pharmaceutical drugmakers believe the
Dunkel text fails to offer enough protection from piracy of their
trade secrets and gives developing nations such as India as much
as a 20-year grace period before they have to obey the new rules.

 But a senior U.S. trade official said the negotiators' options
are limited since every country has specific items in the draft
agreement that it would like to have changed.

 "Our overriding interest will be to avoid unraveling the whole
text," the senior official said. But he left open the possibly of
making the changes key U.S. industries are demanding without side
deals or tinkering too much with the draft agreement. <02:15 11-
24C9999-----

Copyright 1992, The Washington Post.  This story is from the
Washington Post's Capitol Edition On-Line and is not to be ar-
chived or redistributed.

For more information, send-email to American Cybercasting Cor-
poration (usa@AmeriCast.COM)