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Breakthrough reached in U.S.-Japan trade dispute
Ban on Japanese vessels likely averted
October 17, 1997
Web posted at: 6:17 p.m. EDT (2217 GMT)WASHINGTON (CNN) -- Just hours before a ban on Japanese cargo ships in United States ports was to go into effect, the two countries have made what is being termed a "breakthrough" to resolve their trade dispute.
The resolution was announced at a press conference in Washington about 3 p.m. EDT (1900 GMT), just nine hours before the ban, ordered Thursday by the Federal Maritime Commission, was to go into effect. However, both sides emphasized that some details still needed to be ironed out before an agreement was finalized.
"While an agreement is not yet in hand, it is clearly within reach," said U.S. Undersecretary of State Stuart Eizenstat. (We) have instructed our experts to conclude the remaining details of an agreement, and we hope and expect that that can be done very shortly."
"I'm confident that our experts will be able to resolve these remaining details," said Kunihike Saito, Japan's ambassador to the United States. "We hope that the Federal Maritime Commission will act accordingly, taking into consideration the progress we have made up to now."
Eizenstat and Saito gave few indications as to what the two sides had agreed to do. However, Eizenstat said he believed the tentative deal could lead to "meaningful reform" in Japanese port practices, which U.S. shippers have long complained discriminate against them.
In the wake of the breakthrough, the State Department was recommending to the maritime commission that it drop its order prohibiting access to U.S. ports by Japanese ships and impounding Japanese ships already docked in the United States.
The order -- to be imposed because of unpaid sanctions -- originally was to take effect Friday afternoon. But it was delayed until midnight in hopes of averting the proposed blockade.
The maritime commission voted Thursday to impose the ban on almost all Japanese ships after three shipping companies failed to meet a deadline for paying $4 million in punitive levies that had been imposed starting in September.
Those sanctions, $100,000 per port call, were imposed in retaliation for what the United States says are unfair practices at Japanese ports that restrict American shipping.
An attorney for Japan's three largest shipping lines said Friday that the companies had no plans to pay $4 million, despite some reports to the contrary.
"We have no intention of paying the fines at this time," Ken Quinn told CNN. "We are hoping cooler heads will prevail and the situation will be settled."
The three 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. Their cargo excludes automobiles, grain or steel.
Oil tankers were not included in the port ban.
A ban would have affected billions of dollars in products hauled back and forth between the world's two biggest economies. Japan called the port ban decision illegal and said it would monitor developments before deciding whether to retaliate.
The United States 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 lifted so American shippers would have the same privileges at Japanese ports that Japanese lines enjoy in the United States.
The Japanese government says the dispute is a private-sector matter, but admits that its port practices are in need of reform and that Japanese 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 "yakuza" gangsters.
Japanese Transport Minister Takao 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.
According to Eizenstat, the proposed agreement would set up a separate system where U.S. shipping companies will not have to go through the "monopolized system" run by the JHTA in order to dock in Japan.
In addition, said Eizenstat, the Japanese government would work to "facilitate" that alternate system and the streamlining of license applications for U.S. carriers.
Tokyo Bureau Chief John Lewis and Reuters contributed to this report.
Related stories:
- Shipping ban could mean rough seas for Christmas gift-buying - October 17, 1997
- U.S. port ban for Japanese ships delayed until Saturday - October 17, 1997
- Sources: Japan will pay fine in U.S. trade dispute - October 17, 1997
- Order bars Japanese ships from U.S. ports - October 16, 1997
- U.S. shipping sanction threat angers Japan - February 27, 1997
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