THE QUARREL with Japan over imported semiconductors is the most important trade case that the United States is now negotiating, and the United States is handling it badly. The American negotiators proposed last week that the Japanese government compel its industry to buy specific quotas of American semiconductors. That's another example of the slide toward cartelization over which the Reagan administration is, not quite intentionally, presiding.
The steel agreement with Europe assigns shares of the American market. The Japanese auto quotas limit shipments not only in total but by company. That makes Toyota one of the biggest beneficiaries, incidentally, protecting it in the American market from its most dangerous competitors -- the smaller Japanese auto manufacturers. Now American trade officials suggest that the solution to the semiconductor dispute is another political deal setting another quota.
American semiconductor manufacturers say that the Japanese are dumping their chips here -- selling them for less than fair value. Last month the U.S. International Trade Commission found a "reasonable indication" that the charge is correct and that the imports are injuring the American makers. But the commission's evidence is chiefly the poor financial condition of the American industry and the pressure of the imports on prices.
There's no doubt that the distress in the American semiconductor industry is real. The computer business has been going through a slump. But it is the slump that is the primary cause of the chip makers' trouble; the competition from Japan is secondary.
Suppose that Japan agreed to give the Americans a fixed share of its chip market. Who would decide which American companies were to benefit? Who would decide the price of these coerced sales? One cartel agreement would have to be piled on another. More interesting, how would these agreements count the chips made in Japan by American companies? Several of the leading American semiconductor manufacturers are in production there. If a Texas Instrument plant in Japan ships memory chips to California, do they count as American or Japanese? If you think that they are Japanese, then it follows that the chips being made by Mitsubishi in North Carolina are American, and Mitsubishi is entitled to share in any quota for American sales to Japan.
The semiconductor industry is becoming highly international. Unlike the steel or car industries, the American chip makers are in no danger of being swamped by foreign competition. They have a long lead in design technology, and the competition is doing what it's supposed to do. It's keeping that technology advancing rapidly. This industry can only be harmed by the kind of cartel deal that the administration is discussing.