Commerce Undersecretary Lionel H. Olmer made his most optimistic recent statement on the status of key trade negotiations with Japan yesterday, saying that Japan has backed away from many of its complex regulations that could restrict U.S. companies' ability to sell telecommunications products there.
He told the annual spring meeting here of the Electronic Industries Association that the latest draft regulations shown to U.S. negotiators indicate that Japan has agreed to American demands in a number of important areas.
"Considerable progress has been made, but a number of things need to be buttoned up," said Olmer, who returned Sunday night from his second trip to Tokyo in 10 days.
His comments at the industry luncheon stood in sharp contrast to his statement just 10 days ago to the Senate Finance Committee's trade panel that the regulations would prevent American companies from selling in Japan. Strong cries for retaliation against Japan from senators at the hearing, many of whom are considered leading free-traders, shocked the Japanese and may have contributed to their willingness to back off their complex regulations.
Olmer's comments yesterday were far more optimistic than his remarks Friday, when the latest round of negotiations ended. Those comments were based on an oral presentation that Japan had made that morning.
The telecommunications talks are running against a deadline of April 1, the implementation date for new regulations that could give U.S. companies greater opportunities to sell in Japan or shut the door even tighter on their sales efforts.
These talks were given the highest priority when President Reagan and Prime Minister Yasuhiro Nakasone met in Los Angeles Jan. 2, but negotiations are under way in three other areas where the United States believes its products are not getting a fair shake in Japan's markets. These sectors are sophisticated electronics, lumber and paper products, and pharmaceuticals and medical equipment.
Despite his new tone of optimism, Olmer warned the U.S. electronics industry that its companies are going to have to be aggressive in Japan to gain any advantage from the government's market-opening efforts.
And he expressed concern that the U.S. companies would have a difficult time cracking the Japanese market, even with a strong effort to sell competitively priced and state-of-the-art products, because prevailing attitudes in Japan encourage the purchase of domestic goods from old friends and associates rather than of imports.
Nonetheless, "The Japanese have done a great deal to accommodate our interests in the area of telecommunications," Olmer said.
One of the major changes in the draft regulations would let American suppliers certify that their products meet Japan's standards, as Japanese companies long have been allowed to do in the United States, instead of having to submit individual products for inspection by a Japanese agency, he said.
There would be no requirement, moreover, for U.S. companies to submit trade secrets to an approval agency that would likely include Japanese competitors.
Only one agency would be set up to approve products for sale in Japan, instead of the four that Olmer said were under active consideration 12 days ago, and the former government monopoly, Nippon Telegraph and Telephome, would have to submit its products along with everyone else.
The new draft regulations also would lessen the ability of Japanese bureaucrats to intervene, which U.S. negotiators believed could give an unfair advantage to Japanese manufacturers.