Deadline Looms In Chip, Insurance Service Talks U.S., Japanese Negotiators Still Divided Over Key Issues

U.S. and Japanese negotiators approached a Wednesday night deadline for new trade agreements on computer chips and insurance services with differences remaining on both issues.

In computer chips, the United States wants to preserve key requirements of a trade agreement that has prevailed for 10 years. In insurance, the United States would like more deregulation of the Japanese market.

People involved in the talks, speaking on condition of anonymity, expressed doubt for a resolution on insurance services but some hope for settlement of the chip issues.

The current semiconductor agreement originated from complaints of U.S. chipmakers in the mid-1980s that they had been virtually shut out of the Japanese market.

The original pact required Japan to import 20 percent of the semiconductors its manufacturers use to produce automobiles, computers, communications equipment and other goods.

Japan now imports about 30 percent of the chips it needs, leading its business and political leaders to say a target is no longer needed and the U.S. should give up its monitoring.

The United States has insisted that there be some mechanism to ascertain foreign market share of Japan’s chip consumption.

Japan has proposed a joint statement of sorts that would pledge bilateral commitment to cooperate in the semi-conductor industry, combined with creation of a global semiconductor body that would include other nations such as South Korea and European countries.

The United States has argued the current calculation method of the foreign share of Japan’s market is accepted by both countries. “Why change something that works?” a U.S. official asked.

On insurance matters, U.S. officials said talks have been disappointing.

A chief barrier remains a U.S. contention that Japan hasn’t done enough to open its primary life insurance sector, which includes services such as auto, fire and life insurance.

“One thing blocking the Japanese from moving is that the Japanese industry is divided over this issue,” a U.S. official said. “The larger life insurance companies don’t want to deregulate, while the smaller companies do.”