U.s.-Japan Semiconductor Agreement

U.S. computer chip manufacturers have complained that the Japanese have not fully complied with the agreement. They say, for example, that U.S. companies are still not sufficiently in the Japanese market. The Japanese government responded that it had not agreed to guarantee certain market shares at certain times, but only to act in the best possible way to encourage the sale of American semiconductors. Unsu satisfied, last March, the American Semiconductor Industry Association (SIA), a group of U.S. chip manufacturers, asked the U.S. Trade Representative (USTR) to take trade action against Japan. The USTR found no evidence of the AIS allegation and took no action against Japan. The European Community (EC) argued that the semiconductor agreement amounted to price fixing by governments and was therefore illegal under the General Agreement on Tariffs and Trade (GATT).

In 1987, the European Community filed a lawsuit against the United States and Japan under the GATT. In 1988, a GATT committee ruled in favour of the EC and found that the pricing of semiconductors for third countries was contrary to international trade rules and therefore should be stopped. (The Momentum of Managed Trade” The Economist, January 13, 1990, p. 19.) The Japanese semiconductor industry developed above all as a sector of the large consumer electronics industry and remained thus, contrary to the American industry. Thus, the Japanese industry consists of a number of major manufacturers such as Fujitsu, Ltd., Hitachi, Ltd., Mitsubishi Corporation, NEC Corporation and Toshiba Corporation. These companies mainly manufacture semiconductors for their own internal use in the various electronic products they manufacture. Although U.S. computer manufacturers are still the best in the world, they compete fiercely for global markets.

In 1980, U.S. companies had 82 percent of the global computer market, while the Japanese had only 10 percent. Some forecasts indicate that the U.S. share will be reduced to 38% by 1992 and that Japanese companies will come to 42%. (Computers and Other Targets, New York Times, May 5, 1990, p. A 34.) If the United States