reuters/test/14826

ASIAN EXPORTERS FEAR DAMAGE FROM U.S.-JAPAN RIFT
  Mounting trade friction between the
  U.S. And Japan has raised fears among many of Asia's exporting
  nations that the row could inflict far-reaching economic
  damage, businessmen and officials said.
      They told Reuter correspondents in Asian capitals a U.S.
  Move against Japan might boost protectionist sentiment in the
  U.S. And lead to curbs on American imports of their products.
      But some exporters said that while the conflict would hurt
  them in the long-run, in the short-term Tokyo's loss might be
  their gain.
      The U.S. Has said it will impose 300 mln dlrs of tariffs on
  imports of Japanese electronics goods on April 17, in
  retaliation for Japan's alleged failure to stick to a pact not
  to sell semiconductors on world markets at below cost.
      Unofficial Japanese estimates put the impact of the tariffs
  at 10 billion dlrs and spokesmen for major electronics firms
  said they would virtually halt exports of products hit by the
  new taxes.
      "We wouldn't be able to do business," said a spokesman for
  leading Japanese electronics firm Matsushita Electric
  Industrial Co Ltd <MC.T>.
      "If the tariffs remain in place for any length of time
  beyond a few months it will mean the complete erosion of
  exports (of goods subject to tariffs) to the U.S.," said Tom
  Murtha, a stock analyst at the Tokyo office of broker <James
  Capel and Co>.
      In Taiwan, businessmen and officials are also worried.
      "We are aware of the seriousness of the U.S. Threat against
  Japan because it serves as a warning to us," said a senior
  Taiwanese trade official who asked not to be named.
      Taiwan had a trade trade surplus of 15.6 billion dlrs last
  year, 95 pct of it with the U.S.
      The surplus helped swell Taiwan's foreign exchange reserves
  to 53 billion dlrs, among the world's largest.
      "We must quickly open our markets, remove trade barriers and
  cut import tariffs to allow imports of U.S. Products, if we
  want to defuse problems from possible U.S. Retaliation," said
  Paul Sheen, chairman of textile exporters <Taiwan Safe Group>.
      A senior official of South Korea's trade promotion
  association said the trade dispute between the U.S. And Japan
  might also lead to pressure on South Korea, whose chief exports
  are similar to those of Japan.
      Last year South Korea had a trade surplus of 7.1 billion
  dlrs with the U.S., Up from 4.9 billion dlrs in 1985.
      In Malaysia, trade officers and businessmen said tough
  curbs against Japan might allow hard-hit producers of
  semiconductors in third countries to expand their sales to the
  U.S.
      In Hong Kong, where newspapers have alleged Japan has been
  selling below-cost semiconductors, some electronics
  manufacturers share that view. But other businessmen said such
  a short-term commercial advantage would be outweighed by
  further U.S. Pressure to block imports.
      "That is a very short-term view," said Lawrence Mills,
  director-general of the Federation of Hong Kong Industry.
      "If the whole purpose is to prevent imports, one day it will
  be extended to other sources. Much more serious for Hong Kong
  is the disadvantage of action restraining trade," he said.
      The U.S. Last year was Hong Kong's biggest export market,
  accounting for over 30 pct of domestically produced exports.
      The Australian government is awaiting the outcome of trade
  talks between the U.S. And Japan with interest and concern,
  Industry Minister John Button said in Canberra last Friday.
      "This kind of deterioration in trade relations between two
  countries which are major trading partners of ours is a very
  serious matter," Button said.
      He said Australia's concerns centred on coal and beef,
  Australia's two largest exports to Japan and also significant
  U.S. Exports to that country.
      Meanwhile U.S.-Japanese diplomatic manoeuvres to solve the
  trade stand-off continue.
      Japan's ruling Liberal Democratic Party yesterday outlined
  a package of economic measures to boost the Japanese economy.
      The measures proposed include a large supplementary budget
  and record public works spending in the first half of the
  financial year.
      They also call for stepped-up spending as an emergency
  measure to stimulate the economy despite Prime Minister
  Yasuhiro Nakasone's avowed fiscal reform program.
      Deputy U.S. Trade Representative Michael Smith and Makoto
  Kuroda, Japan's deputy minister of International Trade and
  Industry (MITI), are due to meet in Washington this week in an
  effort to end the dispute.