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Wednesday, 31 October, 2001, 13:06 GMT
China Japan trade row rumbles on
Chinese paddyfield
Chinese farm products have been targeted
A round of talks between Japanese and Chinese trade officials on Thursday is unlikely to resolve a six-month-old trade spat between the two countries, according to reports.

The state-owned China Daily News on Wednesday played down the prospect of an agreement, claiming the officials involved aren't senior enough to negotiate a deal.

The window for a solution is very small

Japanese official

In Tokyo, an official who did not wish to be identified said the Japanese government was not expecting a breakthrough.

"The window for a solution is very small," he said.

Deadline looms

Thursday's meeting is part of a rolling programme of talks designed to settle the dispute by 8 November, the deadline by which Japan must decide whether or not to renew controversial import tariffs on Chinese goods.

No date has yet been set for the next round of discussions.

The dispute began in April when Japan slapped 256% import tariffs on a range of Chinese agricultural exports, including mushrooms, leeks, and straw, worth $100m a year.

The Japanese government said the tariffs were a temporary measure sanctioned under the World Trade Organisation's "safeguard clause".

This permits WTO members to give domestic producers limited protection against a sudden surge of cheap imports.

In June, China retaliated with punitive 100% tariffs on a range of Japanese imports, including mobile telephones, cars and air conditioning units, worth $700m a year.

Speedy settlement needed

Analysts say a speedy settlement would be in both sides' interests.

China's use of retaliatory tariffs will not be popular with the WTO, which has recently approved China's membership application but has yet to formally admit the country, while the Japanese government may also come under fire for its protectionist stance on agriculture.

The Organisation for Economic Cooperation & Development has previously sharply criticised Japan for failing to open up its markets to agricultural imports.

The cost of the dispute, estimated at $400m so far, provides another powerful incentive to reach agreement.

Japan is China's single largest trade partner. Trade between the two countries has boomed in the past 10 years, reaching $83bn in 2000.

"These are the two major powers in the region, how they get along is very important," Commerzbank Tokyo economist Ron Bevaqua told the BBC's World Business Report. "The LDP has always very much favoured the interests of domestic agricultural producers."

"The political interest in favour of protection of agricultural products are so large and so powerful that I can't imagine the Japanese government will give in."

Commerzbank's Ron Bevaqua
"The LDP has always favoured the interests of domestic agricultural producers"
See also:

03 Jul 01 | Business
China and Japan tackle trade row
19 Jun 01 | Business
China-Japan trade row escalates
09 Jun 01 | Business
China and US clinch WTO deal
30 Oct 01 | Business
China feels trade hiccups
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