China-Japan hit 'consensus' on trade


China and Japan have come up with a trade-consultation plan to solve disputes over imports like cell phones "properly"

By staff and wire reports

BEIJING, China -- China and Japan made a deal Friday to end a nine-month trade row over imports of Chinese farm produce, Chinese officials said.

China's Trade Minister, Shi Guangsheng, said Japan has agreed to stop import restrictions of three farm goods from China, according to state news agency Xinhua.

In return, China is canceling its punitive tariffs on three Japanese products.

Shi said China and Japan have agreed to a trade-consultation mechanism to settle disputes between the two sides properly.

'Consensus reached'

The two sides reached a deal in last-minute talks on Friday morning.

"China and Japan have reached a consensus," a spokesman for China's Ministry of Foreign Trade told Reuters news agency.

The dispute started in April when Japan imposed temporary "safeguard" curbs on surging imports of Chinese leeks, shiitake mushrooms and the rushes used to make tatami floor mats.

China struck back in June with 100 percent punitive tariffs on Japanese cars, mobile phones and air conditioners.

Japan's original curbs expired on November 8, coincidentally just before the World Trade Organization voted to accept China as a member.

Farmers may swap output details

Tokyo had a Friday deadline for deciding whether to slap full long-term sanctions on China. Under WTO rules, those would have lasted four years.

After a series of talks yielded no progress, Prime Minister Junichiro Koizumi had given instructions to prepare those curbs.

But Japan's Trade Minister, Takeo Hiranuma, and Agriculture Minister, Tsutomo Takebe, flew to the Chinese capital on Thursday in a last-ditch effort to shore up relations in talks with Shi.

Both sides faulted each other under WTO rules. But China's retaliatory tariffs were installed before it joined the WTO and were unlikely to stand up.

Japan had pressed China's farmers to accept voluntary curbs on production. Though WTO rules bar countries from promising to cut trade volumes, they do not prohibit voluntary curbs on output.

The Nihon Keizai Shimbun reported Friday that both sides had agreed to form a bilateral trade group in early 2002, made up of producers and exporters.

The business daily reported that Japan has submitted a plan in which Japanese farmers would tell their Chinese counterparts how much produce they are growing and what demand is like.

The two sides would then negotiate "appropriate" output levels in China.

Reuters contributed to this report.