China's first WTO move: Sue Japan?

By Alex Frew McMillan

BEIJING, China -- One of China's first moves as a full-fledged member of the World Trade Organization could be to sue Japan.

Talks to resolve a festering trade dispute between China and Japan ended Tuesday without fruit.

The issue first reared its head this spring, when Japan slapped temporary curbs on Chinese farm goods.

Japan's trade minister, Takeo Hiranuma, and agriculture minister, Tsutomu Takebe, met Tuesday in Beijing with China's trade minister, Shi Guangsheng.

It was the latest in a string of meetings on the issue. Tuesday's session lasted less than three hours.

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Both China and Japan say that the other country's actions flout WTO rules. The two countries are Asia's largest trading partners.

China has said that if it doesn't see progress on getting its farm goods into Japan, it will take the issue to the WTO.

Japan has the most restrictive market for farm goods in Asia, along with South Korea, and has some of the highest tariffs in the world.

The Japanese farm lobby is politically powerful, even though its farmers cannot grow produce as cheaply as many of their Asian counterparts.

After Japan restricted imports of Chinese leeks, shiitake mushrooms and the rushes used to make tatami mats, China responded with 100 percent tariffs on Japanese car imports, as well as on mobile phones and air conditioners.

A spokesman for the Japanese Ministry of Economy, Trade and Industry told Reuters news agency in Tokyo that talks between the two will continue.

"We couldn't reach an agreement with the Chinese again. But we will keep trying. Dialog will continue," the spokesman said.

Japanese officials said there is still time to settle the dispute. Japan's curbs expired on November 8, ironically just ahead of a WTO vote to allow China into the group.

Now that China has formally joined, Japan is deciding whether to impose full sanctions. It claims that punitive tariffs are not allowed in the WTO and that its curbs are necessary as a temporary safeguard.