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Trade battle may substitute one insanity for another

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AS US Trade Representative Mickey Kantor fired a salvo warning of a US-Japan trade war, he brilliantly illustrated both why conflict is inevitable and the grave dangers inherent in any such confrontation.

The gung-ho spirit in the White House last Friday was palpable as a senior administration official - almost certainly Mr Kantor himself - briefed the press following the failure of the summit between US President Bill Clinton and Japanese Prime Minister Morihiro Hosokowa to reach any agreement on the burning issue of trade.

The official said: ''What you saw today was the ending of the former United States policy of trade insanity, repeat, insanity - that is, doing the same thing over and over again and expecting a different result.

''Today represents a clear break with the past. Before, we would accept cosmetic agreements. The status quo is unacceptable. There's no more business as usual with Japan in trade. This is a turning point in our trade relationship.

''We have been prepared [with] quite a menu. We will proceed promptly, responsibly and carefully. We will insist that the Japanese market, which is out of step with the rest of the world in terms of being closed, be opened up.'' Few wars have ever been so precisely defined at their outbreak, and Mr Kantor followed up on Tuesday as he announced the first battleground.

His choice, cellular phones, illustrates past trade insanity in several ways.

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