US, TAIWAN TALKS ON TOOL EXPORTS COME TO END WITHOUT AGREEMENT

US, TAIWAN TALKS ON TOOL EXPORTS COME TO END WITHOUT AGREEMENT

Five days of negotiations between the United States and Taiwan on machine tool exports ended this week without agreement.

The talks centered on whether to extend current restrictions on such shipments from Taiwan to the United States. They were the third round in a series that began when a five-year U.S. restriction lapsed at the end of last year.The two sides did not agree on the date or venue for the next round, according to C.C. Wang, deputy general secretary of the Taiwan Association of Machine Industries.

Washington's 10-member delegation, led by Deputy Assistant U.S. Trade Representative Donald W. Eiss, sought to continue some restrictions on high- technology machine tools, but Taiwan's negotiators argued it could effectively enforce self-restriction, said Mr. Wang.

Under the 1987-91 agreement, Taiwan manufacturers were limited to 3.23 percent of the U.S. market in high-technology machine tools, such as numerically controlled lathes.

Washington is not seeking to renew restrictions on more conventional models. Most production of those items has moved to nations with lower labor costs such as China.

Analysts estimate Taiwan's share of the U.S. market for advanced numerically controlled machines is 2 percent to 3 percent, while their lower-end models may have 15 percent to 20 percent.

The restraint is seen here as protectionist, especially since Taiwan's overall trade surplus against the United States continues to fall steadily.

There are 40 companies in Taiwan producing the advanced machines, with a total production value last year of US$320 million, according to Mr. Wang.

From 1986 to 1990, the industry grew by 300 percent, he said.

In the last five years, some Japanese machine toolmakers have moved production to the United States and upgraded to higher-end products. Smaller Taiwan firms have been unable to expand in the United States.

Local machine toolmakers are urging the government to strike back if the curbs are extended, a move that could hurt U.S. industry, opponents of the restraints, both here and in the United States, contend.

Aside from a small U.S. stake in Taiwan's own machine tool market, there could be repercussions on the opportunities for U.S. deals under the island's multi-billion-dollar upgrade plan for infrastructure.