Sources: Japan will pay fine in U.S. trade dispute
Talks continue but Tokyo likely to pay shipping fine, sources
October 17, 1997
Web posted at: 8:59 a.m. EDT (1259 GMT)
In this story:
TOKYO (CNN) -- Japan on Friday called the U.S. decision to
bar certain Japanese cargo ships from U.S. ports illegal, but
said Tokyo would monitor developments before deciding whether
to retaliate. Meanwhile, sources told CNN Japan is likely to pay $4 million in fines, which would be cheaper than the cost of rerouting shipments and delaying
In Washington, negotiators from both sides of the trade
dispute met late into Thursday night at the Transportation
Department before agreeing to resume talks Friday morning.
The ban on Japan's three largest shipping companies was
imposed after they failed to meet the deadline for paying the fines, which were imposed by the U.S. Maritime Commission.
The orders were not to be carried out until the end of the
day Friday to give negotiators more time to reach a
settlement, commission Chairman Howard Creel said.
About 40 container ships from the three companies dock at
U.S. ports in an average month, the firms said, and a ban
would affect billions of dollars in products hauled back and
forth between the world's two biggest economies.
Under orders imposed Thursday by the commission, the U.S.
Coast Guard would turn away ships from the three Japanese
companies, and the U.S. Customs Service would detain those
already in U.S. harbors.
"The decision is deplorable and regrettable, coming when we
are making last-minute efforts to resolve the dispute,"
Transport Minister Takao Fujii told a news conference. "The
U.S. sanctions were illegal and I urged Washington to
The companies -- Mitsui O.S.K. Lines, Ltd., Kawasaki Kisen
Kaisha Ltd. and Nippon Yusen K.K. -- typically carry
containers of boxes that can be loaded onto railroad cars,
Creel said. Their cargo excludes automobiles, he said, or
grain or steel, for example, which usually is shipped in
The United States also argues that Japanese ports
discriminate against non-Japanese ships and push up costs.
The complaint is that Japan requires all shippers to receive
prior approval for even the most minor operational changes in
handling cargo at its ports.
U.S. negotiators were demanding that these restrictions be
eliminated, so American shippers would have the same
privileges at Japanese ports that Japanese lines enjoy in the
The Japanese government says the dispute is a private-sector
matter, but admits that its port practices are in need of
reform and that domestic shippers and exporters are unhappy
with the current setup.
The shipping firms argue that the commission's quarrel is not
with them but with the Japan Harbor Transport Association,
which controls cargo handling.
The port operations are widely thought to be influenced by
Fujii denied that the ministry had failed to take stronger
action due to fear of the yakuza. "We are not afraid, and
there aren't such elements," he said.
The most immediate impact of a ban would be on American
retail stores trying to stock their shelves for the upcoming
Christmas season. Japanese televisions, radios and other
electronic goods could become harder to find if a ban on
Japanese ships were imposed, trade analysts said.
President Clinton has the authority to overturn the
commission's decision on national security grounds.
Presidential spokesman Mike McCurry, traveling with Clinton
in Argentina, refused to say whether Clinton would intervene.
Tokyo Bureau Chief John Lewis and Reuters contributed to this report.