Deadlocked US-Japan passenger negotiations are testing the resolve of both sides, as the mood in Tokyo swings towards renunciation and the US attempts to avoid passenger talks this year.

Early June talks in Tokyo became bogged down when the US insisted on resolving outstanding issues, principally plans by Northwest Airlines and United Airlines to begin serving Jakarta via Japan. Instead, a round of late June talks were scheduled which could lead to another 11th-hour approach to resolving specific applications that touch on the highly contentious US fifth freedom rights beyond Japan. Japan's transport officials believe that more US beyond services will create an even wider disparity in rights in an agreement they feel already favours the US.

Support in Japan is growing to renounce the bilateral, while US officials continue to debate over the best negotiating approach. One US negotiator flatly states that 'we're not going to do a passenger agreement in 1996,' though the source does indicate the US would like at least to begin talks. Before that Washington wants to 'clear out the underbrush' by securing approval for outstanding applications from three US carriers, including new services by FedEx. The freight carrier has had its application blocked since it won the rights in a sanction-averting agreement between the US and Japan last July.

Richard Hirst, Northwest's general counsel, says the US must be insistent: 'Japan has followed a pattern of agreeing and then refusing to implement what they have agreed to. The proper way to proceed is to ensure existing rights are being implemented.'

Mead Jennings

Source: Airline Business