JAPANESE MAY OFFER TO ABANDON SATELLITES

JAPANESE MAY OFFER TO ABANDON SATELLITES

Japan reportedly is planning to offer the Bush administration a final compromise under which it would cease domestic development of new communications satellites.

The Tokyo government's aim would be to resolve the current procurement dispute with Washington.Usually reliable Japanese government sources disclosed Monday that the United States soon will be informed that Tokyo is prepared to develop only academic research satellites whose effective life will be approximately three years or less. This would mean that Japan would give up its earlier plan to develop locally a communications satellite known as the CS-4.

Also as part of the offer, these sources said, Japan would propose that both foreign and domestic manufacturers be given fair and nondiscriminatory access in Japanese procurement of commercial satellites.

But purchases of satellites used for research and other scientific purposes and those designed to last less than three years would not be open to foreign bidders. The National Space Development Agency, for instance, would

purchase research and development satellites only from local suppliers through arbitrary contracts.

If U.S. negotiators agree to the Japanese proposal, these sources said, a bilateral settlement might be worked out early in April.

However, these sources insisted that the latest offer would not apply to satellite purchase contracts concluded before a U.S.-Japan final agreement on the issue.

As the Japanese see the proposal, satellites launched by their National Space Development Agency would be limited to scientific research and development, and their life span would not extend beyond three years. Lifelong and practical-use satellites, other than research types, would be procured

from either Japanese or foreign manufacturers.

Procurement methods involved would include open bidding or non- discriminator y purchasing through the announcement of specific requirements under General Agreement on Tariffs and Trade regulations.

Originally, the Japanese government had planned to launch two CS-4 satellites in fiscal years 1994 and 1995. It is anticipated that the latest offer would bring the present CS-4 program to a halt and merge it into an experimental data relay and trace satellite project scheduled for fiscal 1995.

In addition, the program would be slashed to a three-year project from the previously planned seven years. Apparently, this would reduce the satellites' practical and commercial use.

The compromise, if accepted by the Bush administration, would drastically revamp Japan'sprograms for domestic satellite development. Japanese makers, as a result, would face tremendous competition from U.S. and other foreign satellite manufacturers.

Executives of Japan's satellite industry, which has been heavily dependent on government development contracts, already have voiced their objections to the Kaifu administration's proposal.