Japan sees no breakthrough in China trade dispute

Reuters, Tokyo

Japan wants a negotiated solution to a festering trade dispute with China but sees no signs of a major breakthrough, a senior Japanese government official said on Wednesday, the eve of talks between the two countries in Beijing.

"We believe it is possible to settle the issue through dialogue. But we do not see a scenario of such a solution," the official, who declined to be further identified, said.

"The window for a solution is very small," the official added.

Japan and China have been locked in a bitter trade dispute since April when Japan decided to impose temporary curbs on surging imports of Chinese leeks, shiitake mushrooms and tatami rushes used to make traditional Japanese mats.

Angrily disputing Tokyo's action, China lashed back in June with 100 percent punitive tariffs on Japanese cars, mobile phones and air conditioners.

Japan says its decision to impose temporary "safeguard" curbs under World Trade Organization (WTO) rules, which preclude retaliation, was to protect its farmers from cheap imports.

China disputes that, calling the move trade protectionism.

Japanese media have said that Tokyo would not immediately impose full import curbs even if the two sides failed to reach an agreement before a Nov.8 deadline.

The two countries agreed earlier in the month to resolve the issue through dialogue.

Japanese Trade Minister Takeo Hiranuma said last week that Tokyo would be flexible in resolving the dispute while adhering to international rules set by the world trade watchdog.

But the Japanese official said Prime Minister Junichiro Koizumi and Chinese Premier Zhu Rongji had no plans to discuss the issue when they meet in Brunei next week on the sidelines of a summit of Southeast Asian nations plus China, Japan and South Korea.

Sino-Japanese ties have also been strained by a row over Japanese school textbooks that China and South Korea say whitewash Tokyo's wartime atrocities.