• Kyodo

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Japan and the United States are close to agreeing to hold talks on issues related to the automobile and auto parts industries, following the expiration of a bilateral trade accord at the end of last year, trade sources said Wednesday.

The U.S. government proposed the new talks after Japan rejected its call to renew the 1995 bilateral trade agreement aimed at boosting sales of U.S.-made automobiles and auto parts in Japan, the sources said.

The new round of discussions among working-level officials would be held once a year, starting this fall, to discuss problems between the two countries related to these industries, they said.

In the previous five-year agreement, Tokyo promised to further open its market to imports and agreed to annual reviews of progress toward that goal.

In late June, Prime Minister Junichiro Koizumi and U.S. President George W. Bush agreed to create a trade forum to focus on auto, agriculture and other trade issues raised by the two sides and act as an early warning mechanism to help resolve emerging trade disputes.

But with the potential for those discussions to focus primarily on disputes, Washington wants to hold separate talks on the auto and auto-parts industries — which together form the largest portion of bilateral trade — in keeping with Bush’s policy of promoting cooperation with Japan, the sources said.

They said setting up new talks will ease calls from within the U.S. for the government to pressure Japan with a new agreement that will include numerical targets for imports from the U.S.

But if the rapid slowdown of the U.S. economy increases protectionist sentiment, the talks may still be dominated by U.S. demands to boost exports across the Pacific.

Vice ministers to meet

WASHINGTON (Kyodo) Japan and the United States plan to hold the first of their vice ministerial-level talks, called the Economic Dialogue, in Tokyo next month, trade sources said Wednesday.

The dialogue is part of a new framework for bilateral economic talks set up by Prime Minister Junichiro Koizumi and U.S. President George W. Bush during their summit in Camp David, Md., in late June.

The dialogue is intended to set the overall direction of the two countries’ partnership through informal meetings at least once a year to address bilateral, regional and international issues.

The coming meeting will deal with, among other issues, the pressing concerns of how to revitalize the Japanese economy and differences over the proposed new trade round, expected to be launched at the World Trade Organization ministerial meeting in November.

Representing Japan in the dialogue will be senior officials of the Foreign Ministry, Finance Ministry, and Ministry of Economy, Trade and Industry as well as the Cabinet Office, the sources said.

The U.S. delegation will include officials of the State Department and the Office of the U.S. Trade Representative as well as the White House, they said.

At the Camp David summit, Koizumi and Bush also agreed to set up four governmental forums and a government-private sector commission.

One of the four forums, the Investment Initiative, will also be launched in Tokyo in September, the sources said.

According to Koizumi and Bush, the investment forum is meant to address legislation, policies and other steps to improve the environment for foreign direct investment in both countries.

The other three forums are the Regulatory Reform and Competition Policy Initiative, the Financial Dialogue and the Trade Forum.

The Financial Dialogue will also commence next month, on the sidelines of a meeting in China of finance ministers from the Asia-Pacific Economic Cooperation forum.

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