Memorandum on the Japan-United States Semiconductor Trade Agreement

July 31, 1986

Memorandum for the United States Trade Representative

Subject: Determination Under Section 301 of the Trade Act of 1974

Pursuant to Section 301(d)(2) of the Trade Act of 1974, as amended (19 U.S.C. 2411(d)(2)), I have determined that the Agreement between the Governments of Japan and the United States of America Regarding Trade in Semiconductors, to be implemented by an exchange of letters, is an appropriate and feasible response to the practices of the Government of Japan with respect to trade in semiconductors. These practices have been investigated by the United States Trade Representative in response to a petition filed under Section 301 on June 14, 1985, by the Semiconductor Industry Association.

The Agreement, which will be in effect until March 31, 1991, will open up the Japanese market to U.S. exports of semiconductors and will help prevent dumping of semiconductors in the United States and third country markets. It achieves a key objective of Section 301, which is to open foreign markets to U.S. exports. The satisfactory resolution of this problem demonstrates our ability to help U.S. industries and to resolve contentious trade disputes through the negotiating process.

Fulfillment of the objectives and commitments in the Agreement is of critical importance. Therefore, I hereby determine that any future failure by the Government of Japan to meet the commitments and objectives of the Agreement would be inconsistent with a trade agreement or an unjustifiable act that would burden or restrict U.S. commerce. Therefore, I instruct the United States Trade Representative to report to me on: (1) the results of each of the periodic consultations held pursuant to the Agreement; and (2) annual improvements in foreign-based semiconductor firms' access to the Japanese market. I also direct the United States Trade Representative and the Secretary of Commerce to take any further action that may become appropriate to implement the Agreement. Finally, the Section 301 proceeding on semiconductors shall be suspended and shall remain suspended as long as the objectives and commitments of the Agreement are fulfilled.

This determination shall be published in the Federal Register.

Ronald Reagan

[Filed with the Office of the Federal Register, 10:37 a.m., August 1, 1986]