	japan in last ditch effort to save chip pact japan has launched a last ditch effort to salvage its computer micro chip pact with the united states sending a letter to top american policy makers setting out its case and instructing its producers to cut output further we must make our utmost effort to ward off any catastrophe ministry of international  and industry miti deputy director general masaji yamamoto told reporters if hasty action is taken in the united states it will create very serious problems the reagan administration s economic policy is expected to meet thursday to review japanese compliance with the bilateral agreement hammered out last year under the pact tokyo agreed to stop selling cut price chips in world markets and to increase its imports of american semiconductors washington has accused japan of reneging on the deal by selling low priced chips in asia and by failing to boost american imports and has threatened to take retaliatory action in an effort to save the agreement miti is asking japanese chip makers to limit production in the hope that will boost domestic demand and reduce the incentive to export yamamoto said that japan will slash output of kilobit dynamic random access and erasable programmable read only memory chips by pct in the second quarter this follows a cutback of more than pct in the first three months of the year he said the cutbacks were already drying up the supply of chips available for export through unregulated distributors in the so called grey market we have almost no grey market he said supply is diminishing to help ensure that the cutbacks are implemented miti called in the president of japan s largest semiconductor maker nec corp nipn t last week he said it is also issuing specific instructions on production to the japanese subsidiary of texas instruments inc  and industry minister hajime tamura spelled out the steps japan was taking to salvage the pact and appealed for u s understanding in a letter to top american policy makers the letter was sent today to u s secretary of state george schultz treasury secretary james baker commerce secretary malcolm baldrige and u s  representative clayton yeutter the four who make up the economic policy council are expected to consider evidence presented by u s chip maker micron technology inc dram o of cut price japanese sales in hong kong yamamoto admitted that oki electric industry co s hong kong subsidiary had sold chips at an inappropriate level but denied that it was dumping chips at rock bottom prices if the united states uses this as proof of dumping we will present our rebuttal he said the sales though were inappropriate in the light of miti s advice to semiconductor makers to sell chips at well above production costs to avoid any hint of dumping he said he also called the case strange but he stopped short of endorsing japanese newspaper accusations that oki had been trapped into making the sales he did say though that micron publicized the invoice documenting the sales on the same day they were made and that oki was unable to locate the person who had bought the chips when it tried to buy them back last week reuter 
