China and Japan Prepare For Talks in Export Duties Battle

by Mary Swire, Tax-News.com, Hong Kong

02 July 2001

Japan and China are (slowly) preparing for talks over the export duties that have sparked a trade row between Asia's two largest trading partners, according to the Japanese Trade vice-minister Katsusada Hirose. China told Japan last week that it was willing to talk, but that it wanted Japan to remove tariffs on Chinese agricultural products before China would discuss its retaliatory 100% duty on Japanese cars, mobile phones, and air-conditioners.

'It's up to Japan,' said Ma Dezhi, spokesman for China's foreign trade ministry. 'Japan must drop the tariffs on Chinese agricultural products before we can start negotiations.' However, the progress in the dispute which began in April may have been halted before it has begun, as Japan has said that the issues are 'two different things', which should be discussed separately.

There are several other delicate issues which must also be agreed upon before talks can commence; neither side can agree on where the two governments should meet, for a start. Bejing agreed last week to hold the talks in China, but only on the condition that negotiations centred entirely on the Japanese removal of what it sees as punitive export duties on products such as mushrooms, leeks, and straw.

There is speculation that the topic may be raised in talks about China's 15 year bid for entry into the World Trade Organisation, but Mr Hirose assured the Chinese that Japan would not oppose their entry: 'We will still maintain our position to support China,' he said, 'Our stance won't change.' However, he did insist that the Japanese tariffs on agricultural products, scheduled to expire in November, are in accordance with WTO rules, whereas the Chinese action in raising the duties on Japanese products is in violation.

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