Japan, U.S. Telecom Talks Fail Again

TOKYO (03/24/2000) - The latest round of telecommunications deregulation talks between trade officials of the U.S. and Japan broke down yesterday with no agreement.

The talks, the latest in a string of such discussions, were derailed by the contentious issue of the interconnection rates telecom carriers must pay Nippon Telegraph and Telephone Corp. (NTT), Japan's de facto monopoly local access provider, for use of its circuits to complete a call, said a report on local television.

The U.S. Government is demanding an immediate 41 percent cut in NTT's rates, which is says are among the highest in the world, but NTT is insisting the best it can do is a 22.5 percent reduction over four years. Anything greater, says NTT, would impact profits and put jobs at risk.

The most recent failure to agree on the issue, which represents the hottest trade issue between the two countries, poses extra problems for the ruling Liberal Democratic Party. If an agreement is not reached soon, the U.S. is expected to bring the matter up at the Group of Eight (G8) summit that Japan is hosting this summer in Okinawa.

This has the potential to overhang the summit, as Prime Minister Keizo Obuchi is facing a general election before the end of the year and is widely believed to be banking on a successful summit in the lead up to the nationwide poll.

This could lead the government into exerting pressure on NTT to come to a successful agreement with the U.S., several local reports speculated today.

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