- The Washington Times - Wednesday, December 20, 2000

Japan is refusing to extend a major automotive-trade agreement it struck with the United States, making it likely that the hard-fought deal will expire Dec. 31, U.S. trade officials said.
The Clinton administration has been pushing Japan to renew the agreement since the summer, but the country, tired of U.S. complaints over an automotive-trade deficit that could hit $45 billion this year, has rebuffed the demands.
"They will not even have the simple dialogue that we had under the agreement," a U.S. official said.
On the brink of a trade war, the United States and Japan reached the auto agreement in July 1995. At the behest of the Big Three U.S. automakers, the deal was designed to remedy the large trade imbalance in the sector and boost U.S. exports of vehicles and parts.
But Japan's decade-long stretch of slow or no growth actually depressed U.S. sales there, even as the auto industry underwent tremendous changes. All the major U.S. automakers now have partners in Japan, a point Japanese officials and companies have stressed in opposing renewal of the agreement.
"The automobile industry, whether in America, Canada, Europe or Japan, has moved far beyond the national boundaries that defined it even five years ago," said William Duncan, director of the Japan Automobile Manufacturers Association in Washington.
In opposing any extension of the agreement, Japan appears to be betting that the incoming Bush administration will not push the issue once the current agreement expires, observers said.
"It is a dangerous wager," a U.S. official said.
The United States is warning Japan that U.S. companies, members of Congress and organized labor are bound to demand action as the automotive deficit rises, a U.S. official said. The United Auto Workers is particularly insistent that the agreement be extended, the official added.
Observers also pointed out that President-elect George W. Bush will have someone close to him with a track record of being tough on Japan over the auto issue. Andrew Card, Mr. Bush's designated White House chief of staff, was a lobbyist for General Motors and other U.S. companies before joining the incoming administration.

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