U.S. Spurns Request To Resume Auto Talks This Month

Clinton administration tells Japan it prefers to wait until late June WASHINGTON The Clinton administration rejected Japan’s request for urgent talks on their contentious auto trade dispute Friday, saying it would be better to wait until about a week before America’s punitive tariffs take effect.

U.S. Trade Representative Mickey Kantor suggested in a letter to the Japanese that both sides meet beginning June 20 in Washington. The tariffs of 100 percent on $5.9 billion worth of Japanese luxury autos are scheduled to take effect June 28.

The U.S. announcement was a rebuff to a Japanese effort to get consultations started quickly to clear the way for an early decision from the Geneva-based World Trade Organization.

Now, Japan’s case will be handled under normal WTO rules, which means that a final resolution could take a year or more, allowing the U.S. sanctions against 13 models of Japanese luxury cars to remain in effect.

The entire dispute over the timing of talks was just the latest high-tension maneuvering between the two nations over the auto issue.

A senior Japanese diplomat, briefing reporters on condition that his name not be used, said that Japan believed the June 20 starting date was too late.

This official said Japan will renew its request next week for earlier meetings to take place in Geneva.

But in his letter to Japanese Trade Minister Ryutaro Hashimoto, Kantor said he was suggesting resumption of the talks on June 20-21 in order to keep the automotive dispute from overshadowing the annual sevennation economic summit, which will take place on June 15-17 in Halifax, Nova Scotia.

Trade experts said it was obvious that the United States was trying to make sure that Japan’s case before the WTO challenging the U.S. sanctions took as long as possible and did not take precedence over a U.S. case, yet to be filed with the WTO, challenging Japan’s barriers to automotive trade.

“As a tactical matter, the United States had to push the Japanese case off the urgent track or it could have been settled in a few months,” said Greg Mastel, an Economic Strategy Institute trade specialist.

Now the U.S. sanctions, designed to eliminate the Japanese luxury cars from the U.S. market, will be in effect for at least a year before Japan will get a final ruling on their legality under world trade rules.

The United States is demanding that Japanese auto companies agree to “voluntary” purchase plans to boost sales of American-made auto parts. It also wants increases in the number of Japanese dealerships stocking American cars and relaxation of regulations it blames for keeping American-made parts from being sold by Japanese repair shops.

Without agreement in all three areas, the United States said the sanctions against the popular luxury cars such as the Lexus and the Acura would take effect June 28.

In an effort to overturn the sanctions, Japan filed a complaint with the Geneva-based World Trade Organization, arguing that the sanctions are illegal because the United States did not first seek a WTO ruling.

The administration has argued that Japan’s automotive barriers are not covered by WTO rules and therefore it is justified in imposing unilateral sanctions before the WTO makes a decision in the case.