Joint Statement by
the Government of Japan and
the Government of the United States
Concerning Semiconductors

August 2, 1996
Vancouver, Canada

1. Introduction

Bearing in mind that the Arrangement between the Government of Japan and the Government of the United States of America concerning Trade in Semiconductor Products (the Arrangement) expires on July 31, 1996, the Government of Japan and the Government of the United States of America have consulted on their relationship after the termination of the Arrangement as well as on global conditions facing the semiconductor industry.

2. Principles

The two governments share the view that cooperation with respect to semiconductors should be carried out based on the following principles.

a. Importance of Market Principles

The competitiveness of companies, not government intervention, should be the principal determinant of industrial success and international trade.

b. Consistency with WTO Rules

Government measures should be fully consistent with the letter and spirit of the WTO Agreement. Governments should avoid any form of discrimination based upon the origin of a product, including discrimination on the basis of capital affiliation.

c. International Cooperation

Cooperative efforts to respond to global challenges, both multilateral and bilateral, are likely to become more common and more important. It is important that a larger number of nations take on an equal role in bringing about mutual benefit. In this regard, discussion of markets should not unduly single out any particular market.

3. Cooperative Activities

1. Both governments recognize that the private sector has the primary responsibility for meeting the challenges posed by the dramatic structural changes in the semiconductor industry, of fulfilling the promise of the "information society," of promoting industry cooperation, and of providing market opportunities for all competitive suppliers.
2. The two governments welcome the Agreement between EIAJ and SIA on International Cooperation regarding Semiconductors (the Agreement) establishing the Semiconductor Council (Council), through which the industries will discuss and engage in a variety of activities, including cooperative activities between users and suppliers, in addition to industrial cooperation concerning newly arising global issues.
3. The two governments also welcome the provisions of the Agreement under which the industries will collect data on semiconductor markets, provide the governments with reports on trade flows, market developments, and cooperative activities, and will make recommendations on issues of concern.
4. Both governments affirm their intention to support industry-to-industry cooperative efforts, including support for trade promotion and seminar activities, and to establish a consultative mechanism.
5. Pursuant to paragraph d, at least once per year the two governments will hold consultations to:

   (i) receive and review reports on data collected and analyzed and recommendations made under the Agreement or by the Council members, and to meet with them to discuss these matters;

   (ii) review and discuss the cooperative activities conducted under the Agreement and market trends and developments, including those related to competitiveness and foreign participation, in major markets, taking into account the information provided in the industry reports; and

   (iii) discuss government policies and activities affecting the semiconductor industries, taking into account industry recommendations.

6. Other governments whose national industry associations have joined the Council may join the consultations, if they so wish.

4. Global Governmental Forum

1. To deal with the global challenges facing the semiconductor industry in the coming years, as well as to facilitate sound development of the semiconductor industry, the Government of Japan and the Government of the United States call for the creation of a Global Governmental Forum (GGF), and invite other governments of major semiconductor-producing countries and other economies to participate in this annual forum without any preconditions. Both governments welcome the strong expression of interest by the EU and encourage the interest of other semiconductor producing countries and other economies as well.
2. The Government of Japan and the Government of the United States intend to consult with other prospective GGF participants on the scope of the GGF and the agenda for the GGF's first annual meeting, to be held no later than January 1, 1997. Without prejudice to the scope of the GGF or the first annual meeting agenda that ultimately may be agreed upon, both governments envision that the forum will provide an opportunity for its participants, in a manner consistent with the letter and spirit of the WTO Agreement, to discuss the following issues as they affect the future outlook of the global semiconductor industry:

   (i) trade and investment liberalization, including removal of tariffs and other market barriers;

   (ii) legal regimes that affect the semiconductor industry, such as regulation and taxation;

   (iii) environment, worker health and safety, and standardization;

   (iv) protection of intellectual property rights;

   (v) present and future approaches to basic scientific research; and

   (vi) promotion of the information society, including market development.

5. Antidumping

Both governments recognize that Article VI of the General Agreement on Tariffs and Trade 1994 (GATT) condemns injurious dumping, and reaffirm the need to avoid the problem of injurious dumping through effective and expeditious antidumping measures consistent with GATT and the WTO Agreement on Implementation of Article VI of GATT (Antidumping Agreement).

6. Termination

Activities described in this Joint Statement will be terminated on July 31, 1999, unless otherwise agreed.