U.S. trade officials have quietly informed Japan that they do not want to see a five-year computer-chip pact expire this summer without a new plan that would continue to pressure Japan to open its semiconductor market.
The landmark 1986 accord, an unusual example of managed trade, was intended to stop Japanese firms from selling their chips at below cost in this country and to force the Japanese to buy U.S.-made chips.
Although U.S. semiconductor makers and the computer companies to which they sell agreed recently that a new agreement should replace the expiring one, U.S. trade officials previously had not made their position known.
At meetings this week in Tokyo, the U.S. trade delegation told the Japanese that further government involvement is needed.
"We've asked the Japanese to keep an open mind on what we can do after the expiration of the current agreement in July," said Lynn Williams, deputy U.S. trade representative.
Both aspects of the original agreement -- price floors and market-opening measures -- are being put on the table, Williams said.
While the Japanese government has not commented, officials are known to be displeased by duties applied to certain Japanese imports that first went into effect in 1987. Those duties were meant to penalize Japan for not living up to the pact.
The 1986 pact is widely considered effective in protecting U.S. interests.
Industry officials say that Japanese firms no longer sell chips below cost in this country, and U.S. manufacturers have seen their market share in Japan grow to 12.3 percent from 8.6 percent. But U.S. firms had hoped to reach 20 percent market share by this year.
In a separate trade issue, U.S. efforts to obtain greater access to the Japanese construction market ended in failure yesterday, raising the specter of possible retaliation against Japanese construction firms seeking public-works contracts in the United States.
However, because of the U.S. government's strong desire to maintain allied unity in the war against Iraq, the United States deliberately soft-pedaled its immediate reaction to the breakdown in the talks.
A U.S. Embassy spokesman in Tokyo provided general information to reporters making inquiries, but the embassy issued no press release about the collapse of the talks.
The negotiators also canceled plans to hold a news conference on the outcome.
Blustein contributed to this report from Tokyo.