• Kyodo

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The U.S. government, frustrated by an expanding trade deficit with Japan, on Friday urged Tokyo to promote deregulation, stimulate its economy and open its markets in a wide range of sectors — from rice, telecommunications and financial services to energy and information technology.

In an annual trade report released Friday, the Office of the U.S. Trade Representative said the administration of President George W. Bush attaches “top priority” to opening Japan’s markets to U.S. goods and services. “In line with this objective, the United States continues to stress the vital need for sustained, domestic demand-led growth,” the report said, urging the Japanese government to implement comprehensive deregulation.

The 2001 National Trade Estimate Report on Foreign Trade Barriers listed 55 countries which Washington says maintain barriers against goods and services from the U.S. Complaints about Japan covered 59 items in 10 industry sectors.

The report serves as a basis for the USTR to designate by the end of April priority foreign countries and practices under the so-called Super 301 trade provision for imposing sanctions. It said Japan is the United States’ third largest trading partner, accounting for more than $250 billion in two-way goods and services trade.

“But a sputtering Japanese economy, persistent market access barriers, structural rigidity and excessive regulation limit opportunities for U.S. companies trading with, and operating in, Japan,” the report said. As a result, the report said, the U.S. goods trade deficit with Japan surged to $81.3 billion in 2000, a 10 percent increase from 1999.

On agricultural trade, the USTR voiced particular concern over poor sales of U.S.-produced rice in Japan. The USTR said there is no full market access for U.S. rice in Japan despite market-opening commitments Tokyo made under the Uruguay Round of trade talks and efforts by American rice growers to meet Japanese consumers’ needs.

Actually, access for imported rice in Japan appears to be taking another step backward, the report said, pointing out that the Japanese government, with surplus rice stocks, has tabled a new proposal during farm trade talks at the World Trade Organization to cut its minimum access commitment for rice.

“Any revisions to the existing import regime to be implemented in 2001 must ensure that U.S. rice access is not compromised,” the report said.

On steel, the USTR accused five Japanese steelmakers of engaging in anticompetitive practices by coordinating production, pricing and market allocation — all with the knowledge of the Japanese government.

The USTR also pressed Japan to increase foreign access to Japan’s auto and auto parts markets, saying American carmakers now sell fewer vehicles in Japan than they did before the two countries signed a bilateral auto agreement in 1995.

The USTR urged that the planned revisions to Japan’s Commercial Code be carried out in a manner that enhances the ability of foreign firms to enter and operate in the Japanese market.

In addition, the report underscored the USTR’s deep concern with barriers in Japan’s $130 billion telecommunications sector.

“Competition in this sector has been stifled due to the absence of an independent regulator, weak dominant carrier regulation, high interconnection rates for both wired and wireless services and inadequate access to rights-of-way, facilities and other services to competitors,” the report said.

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