U.S. Shifts Trade Focus To Fuji Film

The Clinton administration, facing criticism that it settled for a mediocre deal with Japan on autos, launched a new trade battle with its chief economic rival Monday. This time the fight is over the multibillion-dollar market for film and photographic paper.

U.S. Trade Representative Mickey Kantor announced his office would investigate allegations made by Eastman Kodak Co. that Fuji, Japan’s largest film manufacturer, had, with the help of the Japanese government, erected a web of complex barriers that had cost Kodak $5.6 billion in sales in the Japanese market.

Calling it “critical that U.S. firms achieve full access to Japan’s market,” Kantor announced the administration would pursue a case against Japan under U.S. trade law.

The new case came less than a week after the United States and Japan settled a bitter fight involving autos and auto parts.

In the film case, the United States will first ask for consultations with the Japanese government. If there is no agreement, the U.S. has the power to levy tariffs on Japanese products.

While President Clinton hailed last week’s auto deal as a historic market-opening agreement, critics have charged the administration settled for a toothless deal.

Kodak, which spent a year and $1 million assembling its case against Fuji, welcomed the administration’s decision Monday. Kodak’s president, George M.C. Fisher, said his company’s goal is not retaliation against Japan but the opportunity to compete fairly.

Many U.S. trade analysts believe Kodak presents a stronger case than the U.S. automakers were able to put together.

Kodak contends that Fuji maintains dominance in the film and photographic paper market by pressuring Japan’s four largest film wholesalers to keep rival products out of retail stores.

Fuji enjoys a 75 percent share of the film market in Japan compared with 7 percent for Kodak and 18 percent for other foreign suppliers. Worldwide, Kodak has a 44 percent market share.