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Japan refuses

chip talks with

US before June

KOBE, (Japan): Japan refused a U.S request to hold talks on their contentious two-way microchip pact before June, when talks between their semiconductor industries are expected to produce results, a senior Japanese trade official said on Saturday.

At a meeting earlier in the day, acting U.S. Trade Representative Charlene Barshefsky asked Japan's Trade Minister Shunpei Tsukahara for government talks on their five-year chip trade pact after an industry meeting scheduled for April 26 in Hawaii, the official told reporters.

Tsukahara was quoted as telling Barshefsky that Japan first wanted to see the conclusion of a series of private-sector talks.

"The industries say they will come up with a conclusion in June so he said Japan would like to wait for it," the official said.

Washington has demanded an extension of the pact which expires on July 31 but Tokyo has refused, arguing that doing so would violate the spirit of world trade rules and is out of tune with market trends which have seen foreign chip makers grab a nearly 30 percent share of the Japanese market.

In the talks with Tsukahara, however, Barshefsky stressed that a government role should be maintained in the U.S chip trade with Japan, another Japanese trade official said.

U.S. businessmen have said that one solution to the dispute would be for industry groups in the two countries to make an agreement nad for the two governments to endorse it, but Tokyo insists governments have no role to play.

It was the first meeting between Tuskahara, who assumed his post in January, and Barshefsky, who succeeded Mickey Kantor in the job last week.

Barshefsky said the two newcomers had had a positive meeting.

"I thought we had a positive meeting in the sense that we were able to lay out the issues..." she told reporters.

The two nations, however, remain at odds over several trade issues including the microchip pact and a U.S. demand for talks on Eastman Kodak Co complaints about unfair treatment in Japan's photo film market.-Reuter