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To: Bobby Yellin who wrote (12444)	6/1/1998 5:30:00 AM
From: Alex	Respond to of 116922

From Colin Seymores' homepage......................... Monday's Wall Street Journal reports that, according to U.S. ship operators, Japan isn't living up to its agreement to improve access to its ports, seven months after the agreement led Washington to drop trade sanctions against Japan. Will pressure resume in Washington to impose sanctions? Note the potential for an impact on the stock markets- see Background section, below. How would the Japanese respond to new sanctions? Might they recall what Japanese Prime Minister Ryutaro Hashimoto said on 23rd June 1997: "I hope the U.S. will engage in cooperation to maintain exchange stability, so that we will not succumb to the temptation to sell U.S. Treasury Bills and switch our funds to gold." Hashimoto also said: "There are many countries in the world which conduct the management of their foreign exchange reserves in Treasuries. These countries continue to hold on to those Treasuries, even when the dollar plummets. And to some extent, it is this continued holding of Treasuries which supports the U.S. economy." In one of my previous commentaries, updated at 21:30 pm GMT on October 31st, 1997, I said: The agreement now has to stand the test of being put into practice. We may soon see the results of that test. Background to the U.S.-Japan port access agreement On October 16th, 1997, according to Bloomberg Online, the US Federal Maritime Commission placed a ban on Japanese cargo ships and directed the coastguard to seize ships from Nippon Yusen KK, Mitsui O.S.K. Lines Ltd. and Kawasaki Kisen Kaisha Ltd. who refused to pay fines of $4 million arising from alleged discriminatory practices for Japanese port access, known as "prior consultation". The three companies ship something between $15-60 billion p.a. of goods to the US (estimates vary). Following this news, and disappointing results from several companies, the Dow Jones index dropped 160 points before recovering to close at -119. Overnight the Nikkei lost 229 points and the Dollar dropped 1.25% against the Yen, its biggest drop since September 9th 1997. The Taiwanese stock index fell 2%, and the Indonesian Rupiah fell 3% against the Dollar, prompting central bank intervention. On the 17th, a deal was supposedly struck to prevent US action against Japanese cargo ships being taken. However, the statements made afterwards were heavily defensive: "While an agreement is not yet in hand, it is clearly within reach... Ultimately, the determination of whether to issue a denial of entry rests with the Federal Maritime Commission, which is an independent body" said US Undersecretary of State Stuart Eizenstat, and Japanese Ambassador Kunihiko Saito said "Our position is that imposition of fines is against the provisions of Japan-United States Treaty on Friendship, Commerce and Navigation." The U.S. Federal Maritime Commission met over the weekend of October 25/26th, 1997, to negotiate the U.S.-Japan port access agreement, and resolve the situation regarding the ban that had been placed on Japanese cargo ships. After some delay, the agreement was finalised on October 30th 1997 on the basis of a cut in three Japanese shipping companies' fines from $4 million to $1.5 million- and, presumably, concessions over Japanese officials' objections (made on October 25th) to Federal Maritime Commission demands for monitoring and enforcement. So, was it agreed that Japan would be let off $2.5 million in fines, and the US wouldn't look too closely at their subsequent access arrangements? That doesn't sound very fair to me. Wouldn't it be nice if we could negotiate our parking fines and taxes down like that? users.dircon.co.uk