U.S. negotiators proposed yesterday that Japan guarantee U.S. semiconductor makers a specific, larger share of its market to settle a trade complaint brought by the domestic industry, administration sources said.
The proposal, made during "technical discussions" here yesterday, was described as the position of Reagan administration trade officials in the U.S. Trade Representative's Office and the Commerce Department, sources said. The proposal reportedly was "politely and firmly rejected" by the Japanese, the sources said.
The official administration position, which could be changed from the position outlined yesterday, will be presented to the Japanese at negotiations in Tokyo early next month by Deputy U.S. Trade Representative Michael Smith and Commerce Undersecretary Bruce Smart.
The new proposal represents a radical shift from the Reagan administration's general free-trade orientation, although the president has, on occasion, deviated from his basic philosophy by pushing for import quotas on cars from 1981 through 1984 and on steel in 1984.
Without mentioning the new proposal, U.S. Trade Representative Clayton Yeutter told the House Ways and Means Committee yesterday he hopes for a quick resolution of the semiconductor trade dispute. The issue came to a head with charges by U.S. companies that they are blocked from free access to the Japanese market. While U.S. makers once dominated world semiconductor sales, Japan now threatens to take major shares of markets in the United States and overseas that are worth close to $700 million.
The Semiconductor Industry Association filed its trade complaint in June, citing as its "most compelling evidence" of Japanese barriers the disproportionately low market share of U.S. manufacturers in Japan -- 10 percent to 12 percent -- compared with sales that amount to about half of markets in Europe and other parts of the world.
The U.S. proposal came as both countries intensified efforts to settle that complaint, one of three brought by U.S. companies and the Reagan administration that accuse the Japanese of using unfair trade tactics to grab a major share of this country's semiconductor market.
The U.S. negotiators did not specify the market share they thought U.S. companies should get in Japan. But they reportedly said they wanted the enlarged share to be substantial, and that the U.S. side would not accept vague assurances by the Japanese of increased sales.
In addition to asking for an increased share of the Japanese market, the U.S. negotiators proposed a speedy method to settle charges that semiconductors are dumped in the United States at below the cost of their production and a promise that Japan would refrain from dumping chips elsewhere, which also could cost U.S. companies sales.
The speedy resolution of dumping charges, in days instead of months, is being sought because of the extremely short life span of technology in the semiconductor field. Industry sources, for instance, said a complaint that Japan captured the U.S. market for 64K random access memory (RAM) semiconductor chips is due to be settled in mid-April, long after that product has become outdated.