China-Japan trade talks fail


One of China's first acts as a member of the WTO could well now be to explain its case against Japan to Geneva

By Alex Frew McMillan
CNN Hong Kong

TOKYO, Japan -- Trade talks between Japan and China, Asia's largest trading partners, have collapsed.

Discussions at the vice ministerial level failed on Wednesday, after half a day.

The two sides reported progress and promised more talks. But with both refusing to give ground, the failure makes it even more likely the spat will go to the World Trade Organization.

"We were able to deepen mutual understanding and form common views on several points," a spokesman from Japan's foreign ministry said.

Little progress was expected at Wednesday's talks, aimed at settling a dispute that dates back to April. Similar discussions involving China's trade minister and Japan's trade and agriculture ministers failed in Beijing last week.

Japan decision on curbs due Friday

Japan has said it will decide by Friday whether to slap four-year curbs on imports of Chinese spring onions, shiitake mushrooms and the rushes used to make tatami floor mats.

It was temporary Japanese curbs on those products that provoked the trade war earlier this year.

China retaliated with 100 percent tariffs on imports of Japanese cars, air conditioners and cell phones.

But the Japanese curbs expired in November, shortly before China's admission into the World Trade Organization. Now Prime Minister Junichiro Koizumi has said officials should ready long-term restrictions.

Japan's farmers say they need help dealing with competitive pressure from cheap Chinese produce. Japan has one of the most protectionist farm industries in the world.

China insists on getting expanded access for farm goods in exchange for opening its own market to overseas companies.

The failure to resolve the dispute in bilateral talks makes it likely the fight will go to the World Trade Organization.

Both sides fault each other under WTO rules, though China's retaliatory tariffs were installed before it joined.

Reuters contributed to this report.