JAPAN SAYS U.S.-JAPAN MICROCHIP PACT WORKING

  Japanese officials sought to convince the
  U.S. That a U.S.-Japan pact on microchip trade is working ahead
  of an April 1 deadline set by the U.S. For them to prove their
  case.
      "We are implementing the agreement in good faith and the
  situation does not run counter to the pact," Osamu Watanabe,
  Director of the Ministry of International Trade and Industry's
  (MITI) Americas and Oceanic Division, told foreign reporters.
      "The effects of the measures we have taken and are taking
  are emerging in the market place," he said.
      U.S. Trade officials have repeatedly accused Japanese
  microchip makers of violating the pact by continuing to sell at
  below cost in markets outside Japan and the United States.
      The agreement, signed last September, aimed at halting
  predatory Japanese pricing policies and increasing U.S.
  Semiconductor firms' access to the Japanese market.
      The comments by MITI officials followed a call by Prime
  Minsiter Yasuhiro Nakasone to clear up any misunderstandings on
  the U.S. Side about the pact, Watanabe said.
      Yukio Honda, director of MITI's Industrial Electronics
  Division, denied that Japanese chipmakers were selling at below
  cost in third countries.
      MITI's call to Japanese chip makers last month to cut
  production of key memory chips in the first quarter of this
  year has begun to dry up the source of cheap chips for sale in
  the non-regulated grey market, Honda said.
      "The grey market exports from Japan are shrinking now, but
  in contrast U.S. And South Korean companies are expanding
  market share because of their cheaper prices," Honda said.
      MITI plans to take further steps to reduce the excess
  supply of inexpensive chips which developed in Japan after the
  pact was formed because of a slump in Japanese semiconductor
  exports to the United States, he added.
      The ministry will soon release its supply-demand guidelines
  for the second quarter and suggested production volumes are
  likely to be lower than that for the first quarter, he said.
      Despite businessmen's ingenuity in finding ways around any
  artificial controls, regulation of supply and demand should
  bring positive results, Watanabe said. "I am optimistic," he
  added.
  

