Barshefsky Due in Japan as Telecom Talks Continue

TOKYO (07/17/2000) - U.S. Trade Representative Charlene Barshefsky is due to arrive in Japan later Tuesday as key trade talks between the two nations appear to be on the verge of conclusion.

Negotiators from the U.S. and Japan began working-level talks on a number of issues last Monday and vice-ministerial level talks later in the week when Deputy USTR Richard Fisher arrived in Japan to help work towards a deal. The arrival of Barshefsky is thought to indicate the two sides are on the verge of a conclusive agreement, although both Japan and the U.S. have been quiet on the current status of the negotiations.

Chief among the issues on the table is a cut in Nippon Telegraph and Telephone Corp.'s (NTT's) interconnection rates -- the rates dominant Japanese telecommunications company NTT charges other carriers for use of its circuits.

The two sides have been discussing the issue for several years and it presently represents the most contentious trade dispute between Japan and the U.S.

At the heart of the problem is a disagreement on how the rates are calculated and a U.S. demand for a reduction of 22.5 percent over the next two years on the way to a total cut of 40 percent. NTT insisted such a fast cut would eat into the bottom line at its two local carrier units, NTT East Corp. and NTT West Corp., leaving the two sides deadlocked.

With the upcoming Group of Eight summit, which begins Friday in Okinawa, Japan, and a U.S. imposed deadline of July 28 before it brings the dispute in front of the World Trade Organization (WTO), the talks represent a last ditch attempt to prevent the issue becoming a major trade dispute between the two nations.

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