U.S. trade barrier row angers Japan

USTR threat to go to WTO over telecom rates is met with displeasure

Japan expressed its displeasure Thursday at Washington’s suggestion in a report on trade barriers that it may file a complaint with the World Trade Organization over access to Japan’s telecommunications market.

A Japanese government report rebutting the U.S. document, released March 31 by the Office of the U.S. Trade Representative, said, “The government of Japan has been faithfully implementing its WTO commitments.”

Cost-oriented interconnection rates have been realized in line with an international agreement on services trade, the Japanese report says.

The USTR said in its trade report that Japan’s efforts to reduce interconnection fees charged by Nippon Telegraph and Telephone Corp. have been insufficient.

It also hinted that it would file a complaint with the WTO.

The Japanese document says the U.S. trade report’s description of NTT’s interconnection fees and Japan’s pricing policies is “one-sided and unilateral.”

The U.S. trade report says NTT’s interconnection fees are high “because NTT has been allowed to pass along its inefficiencies to its competitors.”

In the dispute over NTT’s access charges, Japan has proposed a 22.5 percent cut over four years while the U.S. has been calling for a cut of up to 50 percent over a two-year period.

The two sides had sought to resolve the problem by the end of March, when they were to have compiled an updated bilateral deregulation report.

The United States has set a July 28 deadline to determine whether to go ahead with the WTO complaint.

The issue will be high on the agenda at a planned meeting between U.S. President Bill Clinton and Prime Minister Yoshiro Mori on the sidelines of the annual summit of the Group of Eight nations, to be held in Okinawa Prefecture between July 21 and July 23.

Foreign Ministry spokesman Ryuichiro Yamazaki told a press conference Thursday that the rebuttal report was handed over Wednesday afternoon in Washington to Wendy Cutler, assistant USTR in charge of Japan.

The Japanese document comments on 52 items in 10 industry sectors out of 54 items in 11 sectors covered by the U.S. report.

The Japanese side told Cutler the U.S. trade report contains misinterpretations, while the U.S. official responded that the report is based on accurate information, according to Yamazaki.

Tokyo also expressed concern that the U.S. was acting unilaterally on trade issues, Yamazaki said.