U.S. SENATORS SAY SANCTIONS LIKELY ON MICROCHIPS

  The United States will likely impose
  sanctions soon on imports of Japanese microchips, senators said
  today after a private meeting with Commerce Secretary Malcolm
  Baldrige.
      Although the senators said Baldrige told them no decision
  would be taken until a final determination is made on whether
  Japanese microchips were dumped in the United States, they said
  they were virtually sure Japan would face penalties.
      President Reagan's trade policy advisory group, of which
  Baldrige is a member, will meet on the issue Wednesday.
      "I am confident we will see action taken," Sen. John McCain,
  an Arizona Republican, told reporters.
      "I am expecting sanctions at least, and even more than
  sanctions," Sen. Pete Domenici, a New Mexico Republican, said.
      The senators, several congressmen and U.S. semiconductor
  industry representatives met with Baldrige and State Department
  officials to discuss Japan's alleged violations of a September
  1986 agreement to stop dumping its microchips in the United
  States and other countries.
      They recommended Japanese firms be penalized through
  tariffs or import duties over the next six to 12 months for
  continuing to dump microchips. The violations were worth 100
  mln dls to the Japanese semiconductor industry, they said.
      Asked if Baldrige intended to recommend sanctions, Sen.
  Pete Wilson told reporters, "The clear import of what he said is
  that there will be."
      "Japan can't just say they will comply. We think sanctions
  must be applied," for past violations of the agreement, the
  California Republican said.
      The semiconductor industry produces microprocessor chips
  which are used in high technology products ranging from radios
  to defence missile guidance systems.
      Sen. James McClure, an Idaho Republican, said Baldrige told
  them the administration had not made a final determination that
  Japanese companies had dumped semiconductor microchips below
  the cost of production in the United States or other countries.
      But McClure said senators told him, "There is no doubt
  dumping is going on," based on evidence such as invoices of
  purchases of the Japanese products.
      The two countries signed a pact last September in which
  Japan agreed to stop selling its microchips in the United
  States and other countries below production costs and to allow
  the U.S. semiconductor industry access to the Japanese market.
      In return, the United States waived its right to impose
  import duties on the Japanese microchips.
      Japanese officials have said they have lived up to the pact
  and have asked Japanese chip-makers to further slash output to
  save the pact.
      Japan has frequently been the target of congressional
  discouragement over last year's record 169-billion-dlr trade
  deficit. Tokyo had a 59-billion-dlr surplus with the United
  States last year and had large surpluses with other countries.
      The Senate yesterday unanimously passed a resolution
  calling for action against Japan for violations of the pact
  since September. The resolution will be introduced in the House
  next week by Rep. Bob Matsui, a California Democrat.
  

