US 'NO' TO EU ON CONSULTATIONS WITH JAPAN

4:57 PM Jun 7, 1995

US 'NO' TO EU ON CONSULTATIONS WITH JAPAN
Geneva 6 June (Charkavarthi Raghavan) -- The United States, which has agreed to hold consultations with Japan in Geneva on 12-13 June over Japan's complaint about the US trade sanctions on imports of Japanese luxury cars is reported to have turned down a bid by the European Union to join the consultations, on the basis of the EU's interest in the systemic issues, according to trade diplomats.

The US is reported to have asked the EU to reformulate its request to show the trade interest. The US views that the EU's "interest" on the systemic issues involved in the Japanese complaint was not a "substantial trade interest" envisaged in Art. 4:11 of the Dispute Settlement Understanding.

The US response to the Australian request to join the consultations was not known, though there were some reports that the US may agree.

The EU, like Japan, has been very critical of the US unilateral actions and trade sanctions, as a major threat to the WTO and its system. While agreeing that the Japanese market required greater deregulation to be open to foreign suppliers, the EU has insisted that the US approach to open up the Japanese market was systemically dangerous.

Australia, while also critical of the US unilateralism, has however been somewhat less strident on this, and more supportive of the demands on Japan to open up its domestic markets.

On 2 June, the US advised Japan that it would accede to the request for consultations under Art XXII of the GATT 1994 and for two-days of consultations to be held in Geneva.

While the US has also sought another round of consultations in Washington, after the June Halifax Summit, Japan has made clear that this would depend on the outcome of the first round of consultations.

While the Japanese request for consultations, a preliminary step to seeking a WTO/GATT panel to adjudicate the dispute, is related solely to the US trade sanctions (the 100% duty to take effect on final determination on 28 June and preliminary action by US customs in withholding clearance of cars landed after 20 May), the US has said it wants to discuss entire range of US-Japan auto-industry trade issues.

But a Japanese MITI (Ministry of International Trade and Industry) official declared in Tokyo, according to a Kyodo news agency despatch, that Japan would break off the Geneva talks if the US insisted on pushing for broad-based talks.

Earlier, the Japan's MITI chief, Minister Ryutaro Hashimoto, had said Japan would discuss only its complaint against the US sanctions.

The MITI official (who was not identified, but believed to be one of the two vice-ministers of MITI), according to Kyodo, said that if the US wanted "comprehensive discussions", as suggested by the USTR Mickey Kantor, Japan would move the WTO to set up a panel.

Asked whether Japan would impose its own counter-sanctions, the MITI official said Japan, at this point, had decided not to say whether it was considering counter-sanctions or not.