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China, Japan Fail to Resolve Trade Dispute - 2001-11-08

On the eve of the opening of a World Trade Organization meeting in Qatar, China and Japan have failed to resolve a drawn-out trade spat. The two countries say they will continue to negotiate.

China and Japan ended two days of trade talks in Tokyo Thursday without making progress on resolving a dispute that has lasted for seven months. The impasse comes just ahead of a World Trade Organization meeting in which China is expected to finally join the trade body after years of lobbying.

At issue are trade restrictions that Japan in April slapped on imports of Chinese mushrooms, leeks and rushes used in straw mats. China hit back with 100 percent tariffs on Japanese cars, mobile phones and air conditioners.

During the talks in Tokyo, Japanese negotiators unsuccessfully demanded that China withdraw its retaliatory tariffs. In turn, Tokyo rejected Beijing's request that Japan abandon a plan to introduce longer-term import curbs.

Japanese trade officials appear to be under heavy pressure from the country's powerful agricultural groups to maintain the limits on cheap Chinese products.

Masaaki Sakaguchi, is a spokesman for a Japanese farmers' union. "If the Japanese government was to lift the current restrictions on Chinese goods, we farmers could not compete," he says. "Our livelihoods over the next few years are at stake." Japanese officials say they will continue talks with Beijing on the issue, though they have not yet set a date to do so. China warns it may take the dispute to the WTO if it is not resolved by the end of the year.

Analysts say the disagreement between China and Japan reflects some of the tensions between rich and poor nations that threaten the launch of a new WTO trade round at the upcoming meeting.