Statement on Japan-United States Semiconductor Trade

June 8, 1987

As we open this economic summit, one of our primary concerns must be the removal of barriers that seek to maintain trade imbalances and lead to protectionism. Our pledge should be to free competition in a fair market environment. Almost 6 weeks ago, I signed an order placing sanctions on Japanese products resulting from their failure to comply with our antidumping and market-access agreement on semiconductors. The clear message was that we intend to be serious about fair trade; equally clear was our desire to lift these sanctions just as soon as the data showed ``clear and continuing evidence'' of compliance. Japan is a major economic partner as well as a staunch friend and ally, and we want to make every effort to resolve our differences as rapidly as possible.

Unfortunately, the initial review of the data relating to the semiconductors is not sufficient for me to remove the full range of sanctions which were imposed. However, in one area, there are strong indications that third-country dumping of [dynamic random-access memory devices] DRAM's has declined. Clearly, there has been marked improvement in this one area. I am aware of congressional concern that there be consistent, positive movement toward compliance.

Therefore, I have today ordered a proportional response. DRAM's account for 60 percent of the $135 million in sanctions related to dumping. The data for DRAM's show an increase from 59 percent to 85 percent compliance with fair market value, or more than halfway to an acceptable goal. I am directing a sanction release of $51 million, a 17-percent reduction in the total value. This release is strictly proportional to progress to date. The Japanese Government has given me assurances that this positive pattern with respect to third-country dumping will continue. If this does not prove to be the case, I will not hesitate to reimpose the partial sanctions that have been lifted.