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Japan, US hold trade deregulation talks

TOKYO: Japan and the United States opened two-days of trade deregulation talks involving high-stakes sectors such as the Japanese telecommunications market, local media reported on Monday.

The vice ministerial-level talks at Japan's Foreign Ministry are aimed at compiling a joint deregulation report by March 31, and a dispute over Japanese telecommunications fees is high on the agenda, they said.

Nippon Telegraph and Telephone Corp (NTT), Japan's biggest phone company and former state monopoly still 59 percent owned by the government, is under intense U.S. pressure to slash interconnection fees for carriers using its networks.

The firm -- which last month slashed its Internet access fees -- controls more than 90 percent of local lines connecting Japanese homes, giving it an iron grip on the huge Japanese telecoms market.

Washington is pressing hard for an immediate 41 percent reduction in the interconnect fees, saying the current charges are triple what they would be under open competition. Some analysts have agreed with Washington's point on higher fees but questioned its calculations.

The United States argues that lower telecom costs would benefit not only U.S. firms seeking access to the Japanese market but would also provide a much needed lift to Japan's fragile economy.

Japan, however, is arguing bigger cuts would jeopardise NTT's profits and threaten its workers's jobs. It has offered a 22.5 percent cut spread over four years.

U.S. and Japanese officials could not be reached immediately for comment on the state of the talks due to Japan's national vernal equinox holiday.-Reuters