WASHINGTON-While the Clinton administration is pledging stricter enforcement of trade pacts involving telecommunications and other business sectors, the future relationship between the United States and Japan has been left uncertain by last week’s promotion of Japan’s tough trade negotiator, Ryutaro Hashimoto, to prime minister.
Hashimoto, 58, was picked by the Japan parliament to succeed 71-year-old Tomiichi Murayama, who abruptly resigned earlier this month after 18 months on the job during which time the country has been rocked by a severe economic recession, major bank failures, the Kobe earthquake and poison-gas attacks on subways by urban terrorists.
Some observers believe Hashimoto will give Japan strong leadership that otherwise has been lacking, and that he will not necessarily carry forward the brash style he exhibited as that country’s top trade official now that his agenda is so much broader.
The United States currently is in the throes of an escalating trade dispute with Japan over that country’s personal handyphone system market. American trade officials believe a PHS network licensed in Japan to a partnership led by Nippon Telephone and Telegraph Corp., which privatized in 1985 but remains two-thirds owned by the Japanese government, should be subject to a sweeping 1994 bilateral pact that requires NTT to liberalize telecommunications equipment procurement practices.
Japan disagrees, arguing NTT Personal Communications Network Inc. is not bound to that trade accord because it is a new company with private investors as opposed to being a spinoff, like cellular provider NTT Mobile Communications Inc.
The two sides failed to resolve the issue in working level talks in San Francisco last July and in September in Washington, D.C.
“As we have said time and again, the most important part of our job is what happens after we sign an agreement,” said Mickey Kantor, U.S. trade representative.
U.S. officials are believed to have brought up the personal handyphone issue with Hashimoto at the Asia-Pacific Economic Cooperation meeting in Osaka in November.
The budget crisis prevented President Clinton from attending that meeting.
Two years ago, the United States and Japan clashed over access to the latter’s cellular telephone market before agreeing that the Tokyo-Nagoya market (the largest in Japan) would be opened to enable Motorola Inc. to build and supply phones for a wireless telephone system. Since then, cellular subscribership on the Motorola system has increased from 22,000 to more than a half million.
