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. Last Updated: 07/27/2016

Japan Reaches Pact With U.S. On Computer Chip Industry

VANCOUVER, Canada -- After days of marathon negotiations, the United States and Japan reached a deal on computer chip trade that allowed both sides to declare a political victory Friday.

Japanese Trade Minister Shunpei Tsukahara said the deal, which relies on cooperation between U.S. and Japanese industry and minimizes the government's role, opened up a new era in U.S.-Japan trade relations.

"This opens a new era. ... It is a fantastic agreement," Tsukahara told reporters following an all-night meeting with U.S. Trade Representative Charlene Barshefsky.

Barshefsky said the agreement was responsive to the views of both Washington and Tokyo and that industries will play a central role in collecting data concerning Japan's $44 billion semiconductor market.

The United States has long sought greater access for foreign computer chip makers to Japan.

Tsukahara said the United States and Japan would call upon the European Union and other countries to create a global government forum and a semiconductor industry council to promote private sector cooperation.

The idea for the forum had been touted by Japan and supported by the European Union, which had a representative in Vancouver monitoring the talks.

The negotiators had failed to meet a Wednesday night deadline set by U.S. President Bill Clinton and Japanese Prime Minister Ryutaro Hashimoto. But after having made some progress in industry and government discussions, the two sides decided to extend negotiations.

A 1991 semiconductor agreement setting targets for foreign access to Japan's market expired Wednesday. Japan saw the old computer chip agreement as having encouraged U.S. demands for similar deals in other trade sectors and wanted the old agreement to die. Foreign firms now have about 30 percent of Japan's market.

The U.S. industry, looking at falling prices on some chips and overcapacity among producers, was worried about continued progress in gaining access to Japan's market and potential dumping in global markets.