1986 U.s.-Japan Semiconductor Agreement

In 1986, following the insistence of the United States, Japan agreed to limit its exports of semiconductors, in particular the “Dynamic Random Access Memory” (DRAM) chips, to America. These chips are used in high-tech consumer electronics such as computers and video cassette recorders. The agreement expires on July 1, so the Bush administration must quickly decide whether to renew it or not. This would make Washington a hypocrite in its free trade efforts to open markets abroad to American products. Finally, the 1986 chip agreement limits trade, supposedly to help certain U.S. segments of the semiconductor industry. The agreement has hurt U.S. computer manufacturers, who pay higher prices for computer chips. This makes U.S. computer manufacturers less competitive and drives up computer prices for all Americans.

Under the threst of criticism from U.S. consumers who paid the bill, the U.S. semiconductor industry is now agreeing to lift trade restrictions on rowing chips when the 1986 agreement expires in September. But industry lobbyists say they want to maintain government restrictions on other chips and maintain a mechanism to protect against semiconductors when U.S. industry asks for help. In other words, they want the consumer to be restocked with electricity. The error in question was the 1986 Japan-U.S. Semiconductor Agreement, in which Ronald Reagan and his consultants imposed trade restrictions on Japanese companies that manufacture storage chips and certain other integrated circuits used in PCs. As everyone now recognizes, this has caused the Japanese to fall into megayen at the expense of American consumers and computer manufacturers. In a parallel round of negotiations, the two sides failed to reach an agreement to open Japan`s $382 billion insurance market until the deadline set by Clinton and Japanese Prime Minister Ryutaro Hashimoto on July 31.

“Our semiconductor industry is much stronger than it was five or ten years ago,” said a senior U.S. trade negotiator. “If you have a 30% foreign market share, you obviously don`t need a similar deal.” After a marathon 33-hour session, U.S. and Japanese negotiators agreed Friday morning on a new trade pact on semiconductors, which replaced a decades-long agreement created to improve foreign access to the Japanese chip market with a much smaller series of private and state agreements. American consumers were no longer trusted to make their own decisions about what to buy. Under the 1986 agreement, the government did not decide how many chips to import from Japan and how much they would cost. During the agreement, the Share of the Japanese market abroad increased to 31% and tripled in 1986. And the U.S. chip industry, which struggled to survive in 1986, has returned to the back and now dominates many key markets.

The alleged objective of this exercise was to give more U.S. storage companies a chance to maintain themselves. It was a total failure. The same three national companies that sold rame tokens in 1986 now sell them. There was not a single new national participant. The share of U.S. companies in the Japanese market has increased only one time. The agreement appears to have been more successful for U.S. manufacturers in the field of programmable ROM memory chips.

1) monitor the exports of Japanese companies to ensure that they do not sell semiconductors at prices below the cost of production; In the early 1970s, the United States

This entry was posted in Uncategorized by yolan. Bookmark the permalink.