Page:Special 301 Report 1993.pdf/7



"U.S. supercomputer manufacturers are the most competitive in the world, yet they continue to be effectively shut out of the Japanese government supercomputer market," Kantor said. "The fact that no U.S. supercomputer manufacturer has ever won a head-to-head competition in a Japanese government bid, despite nearly 10 years of negotiation with the Japanese and two agreements on the issue, is particularly distressing."

U.S. manufacturers dominate most public sector markets for supercomputers. In Europe, for example, U.S. firms hold about 85 percent of the market. U.S. firms hold only an 11 percent share of the Japanese public sector market.

Over the coming months, the Japanese Government is scheduled to procure a number of supercomputers. Pursuant to section 306 of the Trade Act of 1974, USTR will undertake a comprehensive review of Japanese Government behavior under the Agreement thus far and will closely scrutinize each of the upcoming procurements. Based upon this review and the conduct and outcome of these procurements, USTR will determine whether or not Japan is in compliance with the terms of the Agreement. If USTR determines that Japan is not in compliance, it will initiate trade action against Japan under section 301.

"The 1990 Supercomputer Agreement obligates Japan to provide a fair and open government procurement market for supercomputers," Kantor stated. "We are determined to ensure that Japan treats our companies fairly and complies with its obligations under the Agreement." Kantor added, "We are taking this action with a view toward ensuring that, in the years ahead, the Japanese Government market is fully open to new and emerging supercomputer technologies in which U.S. manufacturers have a decided lead."

The 1990 Supercomputer Agreement resulted from a 1989 Super 301 investigation of Japanese Government procurement practices that discriminated against foreign supercomputer firms. Under the agreement, Japan agreed to undertake unilateral measures to open its supercomputer procurement market to competition. The 1990 Agreement replaced a previous agreement concluded in 1987, under which no foreign supercomputers were procured by the Japanese Government.