US fires round two at Japan

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The Independent Online
WASHINGTON - In a new move aimed at Japan, the Clinton administration yesterday resurrected a tough trade law which, once negotiations have failed, allows Washington to slap 100 per cent retaliatory tariffs on goods from countries which refuse to open up their markets to American products, writes Rupert Cornwell.

Under the move, which was formally announced last night, the President is re-activating the so-called Super 301 provision, which lapsed in 1990. It allows the government to establish a hit-list of worst offending countries, to be published by 30 September. If no voluntary agreement is reached within 18 months, Washington can strike with fierce punitive measures.

The Super 301 was only briefly used by President George Bush, who let it lapse after bitter protests from Japan and other countries that it amounted to unfair bullying. But as Japan's trade surplus with the US has rocketed to more than dollars 50bn a year, support for it on Capitol Hill has grown.

Experience in 1989 and 1990, when Super 301 was in force, suggests the mere possibility of its use generates speedy results. In the case of Japan, it succeeded in wringing out concessions on supercomputers, forest products and satellites. Backing up the threat is a plan to publish a list of candidate products from Japan for retaliatory tariffs.

Mr Bush's patrician, free- trading approach is a memory. Last month a summit between Mr Clinton and the Japanese Prime Minister, Morihiro Hosokawa, ended in failure when the two countries could not agree on the US share of certain Japanese markets. Shortly afterwards, the US Trade Representative, Mickey Kantor, announced unspecified measures against Japan over its refusal to open up its cellular telephone market to the US company, Motorola.

Despite the insistence of officials from both sides that neither intends a trade war, the re- introduction of Super 301 is another small step in that direction. The White House is gambling that, once again, its very existence will frighten the Japanese into concessions.