Fuji Accuses Kodak of Fabricating Trade Charges : Commerce: A top official at the U.S. film maker calls the Japanese allegations ‘garbage.’

TOKYO —  Even as the U.S. and Japanese governments were making peace overtures Monday on trade, the two nations’ top film manufacturers traded exceptionally bitter charges and accused each other of unethical business behavior.

At a news conference marked by a level of harshness rarely seen in Japan, Minoru Onishi, president of Fuji Photo Film Co., accused Eastman Kodak Co. of basing a high-profile trade complaint against his firm on “complete fabrications.”

A top Kodak official here called Fuji’s charges “garbage.”

Fuji was taking aim at a 300-page Kodak document that describes barriers to foreign access to Japan’s film market. The document recently prompted the Clinton Administration to take action against alleged anti-competitive practices by Fuji.

Kodak’s report “is a piece of fiction that mischaracterizes facts,” Onishi said. “Kodak has violated all the standards of business ethics. . . . It has shamelessly made false allegations against Fuji Film in a self-serving attempt to use political pressure to accomplish what its own lack of managerial effort and failed marketing strategies have not been able to accomplish.”

Fuji released its own document of more than 500 pages rebutting many of Kodak’s specific claims and countercharging that the U.S. firm engages in anti-competitive practices in the United States. A recurring theme is that quotes from Japanese publications used by Kodak to back up its charges are taken out of context.

Ira Wolf, Kodak’s Tokyo-based director of Japan relations, said his company stands by its initial report. He accused Fuji of trying to “shift the focus” to Kodak’s marketing efforts in Japan and the United States rather than the “rigged” film-distribution system in Japan, the focus of Kodak’s complaint.

“We want the governments to sit down and talk about the issues--not this kind of garbage, this verbiage that is irrelevant,” he said.

Last month, the Clinton Administration agreed to pursue Kodak’s complaint, which was filed under Section 301 of U.S. trade law. This could ultimately lead to retaliatory sanctions against Japan similar to those narrowly avoided in the recently resolved dispute over auto trade.

Fuji’s broadside was leveled as the two nations agreed to launch a new effort to encourage cooperation and keep such trade fights from getting out of hand.

U.S. Undersecretary of Commerce Jeffrey E. Garten, speaking at a Foreign Correspondents Club luncheon, said the Clinton Administration wants the two sides to find “a way to sit down periodically and talk about their broader trade interests.” Later in the day, he told reporters that Tokyo had accepted the proposal.