JAPANESE OFFICIALS VEXED BY REPORTS OF CIA SPYING DURING AUTO TALKS

JAPANESE OFFICIALS VEXED BY REPORTS OF CIA SPYING DURING AUTO TALKS

Japanese officials expressed concern Monday over reports that the Central Intelligence Agency spied on Japanese officials during auto trade talk negotiations.

"If this is true, I think it will be a matter of grave concern that will badly affect our diplomatic negotiations in the future," Deputy Chief Cabinet Secretary Hiroyuki Sonoda told Japanese reporters with Kyodo news agency.But officials from Prime Minister Tomiichi Murayama on down also said they wanted more information and were careful to add that they didn't believe the spying, even if true, would have affected the outcome of negotiations.

The New York Times reported Sunday that a small team of CIA intelligence officers last spring fed information gleaned from CIA agents and National Security Agency eavesdropping devices to U.S. Trade Representative Mickey Kantor during negotiations.

The Journal of Commerce reported in August that President Clinton had commissioned a report setting the guidelines for a shift to economic intelligence gathering for the CIA. The story provided examples from the auto trade talks and the global Uruguay Round negotiations and quoted those who said Mr. Kantor's enthusiasm for such intelligence had been a major factor in establishing this new mission for the CIA.

In the Japan talks, U.S. officials learned through the CIA that Japanese auto executives were not taking seriously U.S. threats of trade retaliation, according to the article in The Journal of Commerce. They responded by publicizing White House meetings at which retaliation was endorsed.

In that article, former trade and economic officials questioned the accuracy of CIA analysis and whether spying is of any real use in a trade negotiation. They also warned that tactics like bribing informants and rifling attache cases could poison relations with friendly countries.

Japanese officials said Monday the first task will be to gauge the report's accuracy. "We want to make clear whether the report is true so we can maintain our relations of mutual trust," said Koken Nosaka, Japan's chief Cabinet secretary, in a news conference.

A spokeswoman with the U.S. Embassy in Tokyo declined to respond. "We don't comment on intelligence issues," she said.

The CIA in recent years has tried to find a new role for itself in the wake of the Cold War and during an era of smaller budgets. As global interest in trade has accelerated, the agency has stepped up its interest in economic espionage.

The disclosure comes amid signs of growing distrust on both sides of the Pacific. U.S. financial regulators were angered in recent days by evidence that Japanese regulators and bank officials waited over a month to tell them about irregular trades at Daiwa Bank's New York office.

The unauthorized transactions in U.S. government securities resulted in a $1.1 billion loss for the bank over an 11-year period at the hands of a rogue trader. Japan's finance minister formally apologized and promised closer cooperation in the future.

Residents in Okinawa, Japan, meanwhile, are enraged over the alleged rape this fall of a 12-year-old girl by three U.S. servicemen. That incident has prompted some Japanese officials to call for cutbacks in the number of U.S. bases on its soil.