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Clinton Revives Trade Rule To Crack Japanese Barrier

By James Gerstenzang and David Holley
Los Angeles Times

Triggering a storm of protests from Japanese leaders, President Clinton on Thursday reinstituted a provision of U.S. trade law that will allow the United States to retaliate against Japanese imports if Japan fails to open its markets to U.S. goods.

The measure will allow the administration to impose trade sanctions, such as punitive tariffs, against any country found to be engaging in unfair trade practices that keep U.S. products out of foreign markets.

Delays built into the process, as well as the administration's plan to only gradually turn up the pressure on Japan, make it unlikely that the measure would have a tangible impact on the cost of Japanese products in this country unless the dispute festers until the end of the year.

Nevertheless, there is significant symbolic impact in the decision, which U.S. Trade Representative Mickey Kantor announced after Clinton spoke earlier in the day by telephone with Japanese Prime Minister Morihiro Hosokawa.

The provision, known as "Super 301," expired in 1990, two years after Congress enacted it. But the administration says it has the authority to reinstate it by presidential order.

During its earlier use, it provoked deep opposition among the Japanese. Although sanctions were never applied, U.S. officials said that with varying degrees of success it pushed Japan into increasing purchases of U.S. satellites, some wood products and super computers.

The administration's action follows the breakdown of trade liberalization talks between Clinton and Hosokawa last month. It brought a warning of trouble to come from Tokyo.

"Such a unilateral approach to solving trade disputes will result in a shrinkage of world trade," said Hideaki Kumano, Japan's vice minister of international trade and industry.

The toughened trade regulation, which would remain in effect through 1995, is one in a series of steps contemplated by the White House to put pressure on the government in Tokyo to open its markets to U.S. products. In 1993, Japan ran up a $59.3 billion trade surplus with the United States, and a $131 billion global trade surplus.

The decision to reinstate the "Super 301" trade provision represented a clear signal to Japan, in the wake of the breakdown in trade talks, that the administration will make it more and more costly for the Hosokawa government to back away from an agreement its predecessor made with Clinton last summer.

The administration's procedure, spelled out in an executive order that the president signed on Thursday, would work this way:

Each year the trade representative sends to Congress a National Trade Estimate Report, which lists trade barriers -- quotas, tariffs, and other procedures that countries follow to keep out foreign products.

By Sept. 30, the administration will identify the nations on the list with the most egregious barriers, setting in motion a short investigation after which tariffs, or taxes on imports, could be levied. The tariffs could be as high as 100 percent of the value of a specific import. In Japan, Hosokawa told Parliament he hoped the United States would "take sensible action based on a sensible judgment."

The Japanese government's top spokesman, Chief Cabinet Secretary Masayoshi Takemura, said Japan "hopes the U.S. government will avoid steps that will increase mutual distrust."