Cargo vessels from Japan's three largest shipping lines faced a ban on entering U.S. ports unless negotiators were able to achieve a last-minute agreement Friday to avert a trade war between the world's two largest economies.
Officials of the Federal Maritime Commission said that letters were being drafted to direct the Coast Guard to turn away Japanese cargo ships headed into U.S. ports and to detain any ships from the three lines that were already in port.While the commission voted 4-0 to take the action on Thursday, Bruce Domboski, an attorney for the agency, said the letters would not be sent until late Friday to give negotiators more time to settle the dispute.
He said it was likely that the first ships would not be stopped until Saturday because the Coast Guard and Customs will need time to develop procedures to carry out the orders.
Meanwhile, negotiators for the two countries met late into the night at the Transportation Department and were scheduled to resume discussions Friday afternoon. An administration official said the Japanese side had asked for a recess to confer with higher-level officials back in Tokyo.
President Clinton's top economic advisers, including Treasury Secretary Robert Rubin, Trade Representative Charlene Barshesfky and Gene Sperling, director of the National Economic Council, scheduled a noon meeting to review the status of the negotiations.
A ban on Japanese ships entering U.S. harbors would affect billions of dollars worth of products going back and forth between the world's two biggest economies, because Japanese ships also transport U.S. goods on their return voyages to Japan.
The companies - Mitsui O.S.K. Lines, Ltd., Kawasaki Kisen Kai-sha Ltd., and Nippon Yusen K.K. - typically carry containers of boxes that can be loaded onto railroad cars, Creel said. Their cargo does not include automobiles, he said, or grain or steel, for example, which is usually shipped in bulk.
The most immediate impact would be on retail stores trying to stock their shelves for the upcoming holiday season. Japanese televisions, radios and other electronic goods could become harder to find if a ban on Japanese ships were imposed, trade analysts said.
"It could take a lot of joy out of the Christmas holidays," said Jack Kyser, chief economist for the Economic Development Corp. of Los Angeles County.
The Japanese Shipowners' Association called the U.S. move "one-sided and unfair."
"We feel it will cause a large blot on friendly relations between Japan and the United States," it said.