Negotiators were still trying to come up with a formula to avert the risk of trade war between the US and Japan, as we went to press last night, shortly before the controversial five-year US-Japan semiconductor trade agreement expired at midnight. With 30% of the Japanese market, the US side has nothing to complain about, but President Bill Clinton is concerned with saving face with American chipmakers, clustered in the politically challenging state of California. Washington still wants a two-way government deal to prevent Japanese backsliding – such bilateral deals are anathema to Europe – Tokyo proposes a global government body and a world chip industry council.
