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Staff writer

Japan and the European Union plan to hold ministerial talks for the first time in 2 1/2 years in the middle of October to discuss bilateral economic relations and international economic issues, government sources said Monday.

The sources said several ministers in charge of economic affairs from both sides will attend the Tokyo meeting and Sir Leon Brittan, vice president of the European Commission, the 15-nation EU’s executive arm, will head the EU delegation.

The final date will not be decided until after Sunday’s Upper House election. If Prime Minister Ryutaro Hashimoto’s ruling Liberal Democratic Party suffers a heavy loss in the vote, he could face strong pressure to resign or reshuffle his Cabinet, although that appears unlikely, the sources said.

Although Japan and the EU agreed in principle in the early 1990s to hold such talks annually to strengthen high-level dialogue, they were postponed last year because of scheduling difficulties on the Japanese side, the sources said. The last Japan-EU ministerial talks were held in Brussels in April 1996.

A Tokyo summit in January between Japanese and EU leaders, however, discussed political as well as economic issues. Topping the agenda at the talks will be Japan’s economic condition and the currency and financial crisis that erupted in Thailand last summer and has since spread to the rest of Asia.

The EU has expressed concern in recent months about its widening trade deficit with Japan. In 1997, the bilateral trade gap grew by 68.5 percent to 2.499 trillion yen, after shrinking for four consecutive years, with EU exports rising by a tepid 1.3 percent and imports increasing at a much faster pace, of 15.9 percent, according to Japanese trade figures.

In the first quarter of this year — the latest period for which data were immediately available — the EU trade deficit with Japan continued to surge sharply, as its exports declined 7.7 percent from a year earlier due to sluggish Japanese demand. Imports of Japanese goods to the EU meanwhile rose 19 percent due largely to a weaker yen, which makes Japanese products less costly overseas.

The EU and the United States have urged Japan in recent months to take further measures to stimulate its stagnant economy, not only as a way to make it more dependent on domestic demand, instead of exports, but also so Japan will absorb more products exported by crisis-plagued developing Asian economies.

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