
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, February 15, 1994                   TAG: 9402150136
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

U.S. TO RISK TRADE WAR WITH JAPAN

The Clinton administration decided Monday to authorize sanctions against Japan on cellular phones, increasing pressure on the Japanese after the collapse of trade talks. President Clinton conceded trade war could erupt but warned Japan it stood to lose the most.

"It's just not acceptable for the United States to continue on the same path" after last week's breakdown in talks, Clinton said.

U.S. officials from the president on down issued Tokyo some of the strongest warnings yet, following up quickly on Friday's failed trade talks at a summit between Clinton and Japanese Prime Minister Morihiro Hosokawa.

"We haven't ruled anything out," Clinton declared.

Administration officials who spoke on condition of anonymity said the United States would announce the beginning of trade-sanction proceedings today against Japan on cellular phones.

The move could lead to prohibitively high tariffs on Japanese-made instruments and set the stage for sanctions in other areas as well.

Although the cell-phone case, stemming from complaints by Motorola Inc., had been in the works, the administration found it fit conveniently into its efforts to increase pressure on Japan.

Clinton called it a "classic example" of the difficulties U.S. companies face in penetrating Japanese markets.

In 1989, Japan agreed to give Motorola from one-third to one-half of its cellular phone business in the Tokyo area. But Motorola officials contend Japan deliberately ignored the bargain, holding the company's percentage of business under 5 percent.

Today, the administration will declare that Japan violated the agreement, the first step in a process that could lead to stiff tariffs on Japanese-made cell phones, administration officials said.z And the Motorola decision won't be the end of the U.S. response, one senior official said.

Many options are under review, not all involving sanctions, officials said.

These range from ordering a Justice Department study of anticompetitive practices of Japanese auto companies to giving closer scrutiny to tax records of Japanese companies.

The United States is also considering bringing a broad complaint in Geneva against Japanese trade practices under the General Agreement on Tariffs and Trade, officials said.

The administration could also dust off a punitive trade law not used since the early days of the Bush administration, known as Super 301, that gives the president broad powers to retaliate against unfair trade practices of any nation.

by CNB