Asia Times: Tit-for-tat and trade war grows


	June 23, 2001	atimes.com

Japan

Tit-for-tat and trade war grows

TOKYO - The Japanese government is willing to hold ministerial-level talks with China to settle the issue of retaliatory import tariffs Beijing imposed on Japanese products on Friday, Trade Minister Takeo Hiranuma said. "If necessary, I myself will visit China to ask Beijing to withdraw such retaliatory tariffs," he said.

Hiranuma said he would summon the Chinese diplomats in Japan to a meeting on Friday to propose such talks.

He criticized China's 100 percent import tariffs on Japanese vehicles, mobile phones and air conditioners as a violation of the World Trade Organization agreement. Nonetheless, he said "The Japanese government will not change its position in continuing to support China's membership to the WTO."

However, Agriculture Minister Tsutomu Takebe expressed on the same day no intention of ending Japan's emergency import restriction measures curbing imports of several Chinese agricultural products. Instead, he plans to discuss a method to change the current temporary import restriction, which is only effective for 200 days, to a longer one lasting four years.

Heizo Takenaka, minister of economic and fiscal policy, showed concern about possible serious trade friction with China, saying that maintaining favorable external economic relations is important, and admitting that the emergency import measure is a safety-net for farmers.

Earlier, in a move escalating the latest Sino-Japan trade tension, China's Ministry of Foreign Trade and Economic Cooperation informed the Japanese government on Thursday that Beijing would, as of Friday, levy 100 percent extra tariffs on imports of Japanese automobiles, cellular phones and air conditioners. The tariffs come in retaliation for emergency import curbs Japan placed on Chinese imports of leeks, shiitake mushrooms and rushes used in tatami mats in April. Such high tariffs are certain to hurt Japanese industry, and Tokyo will be compelled to look for some kind of breakthrough.

The new tariffs will be imposed on top of existing import duties. This means Japanese car exports to China will practically come to a standstill, as tariffs are already a steep 70-80 percent. China currently sets tariffs at 45-65 percent on buses, 30-50 percent on trucks, 25-40 percent on air conditioners and 12 percent on cell phones.

The Chinese ministry did not say how long the new measures will take effect.

"Japan will not tolerate [China's] latest action at all. It violates World Trade Organization rules," Japanese Ambassador to China Koreshige Anami told Long Yongtu, vice minister at the Chinese trade ministry.

The types of automobiles subject to the new measures will include sport utility vehicles, buses and trucks, according to China's state-run Xinhua News Agency.

Japan last year exported to China about 60.8 billion yen (US$495 million) in automobiles, 5.6 billion yen in air conditioners, and 11.1 billion yen in cell phones.

The biggest impact will be on auto exports, even though they comprise less than 1 percent of Japan's overall auto export volume. However, should the tariffs be in place for a long time, Japanese automakers may have more difficulty competing with European and US rivals, which are building sales networks and scrambling to raise their brand recognition in the promising Chinese market.

Beijing announced on Monday that it would impose tariffs in retaliation for what it said were unfair trade sanctions imposed by Tokyo on leeks and other agricultural items.

The Tariff Policy Commission said in a bulletin that the Japanese government has adopted unfair limits on export goods from China. The commission said that this activity constituted discriminative treatment to export goods from China, and incurred serious damage on the export of products and relevant domestic industries of China.

(Asia Pulse)

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