The domestic auto industry welcomed the compromise Friday between Japan and China on a trade dispute.

Farmers, however, expressed anger, as the deal effectively averted an extension of import curbs on farm products from China.

Fujio Cho, president of Toyota Motor Corp., lauded China's decision to scrap punitive tariffs on Japanese products.

"I am delighted, since I had been hoping that a compromise would be reached based on the philosophy of free trade," he said at a news conference in Tokyo.

In June, China imposed 100 percent tariffs on Japanese cars, mobile telephones and air conditioners in retaliation for the 200-day safeguard curbs that Japan imposed in April on stone leeks, shiitake mushrooms and rushes for tatami mats.

"I hope that export of cars will recover to former levels as quickly as possible," Cho said. "Since July, orders for automobiles in the Chinese market have been canceled, and remaining orders are close to zero."

Farmers who had been calling on the government to impose the full four-year restrictions on the farm products under the World Trade Organization safeguard mechanism expressed disappointment and anger.

In Kusu, Oita Prefecture, which produces shiitake mushrooms, Michio Hino, a senior official of the local farm cooperative, said, "I feel anger. Because of the inflow of Chinese products, our annual sales have dropped from 500 million yen to 100 million yen in just a few years. It is a matter of life or death for us."

Hideaki Kumazawa, vice minister for agriculture, forestry and fisheries, expressed pleasure with the bilateral trade deal.

"It is most welcome," he said. "It is important that Japan and China build an orderly relationship in farm trade."

Kumazawa said the government will help to make the domestic farming industry more competitive.

"We need to promote structural reform and take comprehensive measures in the areas of production, retail and consumption," he said.

Kumazawa said it is unlikely the government will release the results of an investigation it started in December 2000 with a view to invoking the safeguard measures.

In Yatsushiro, Kumamoto Prefecture, a 45-year-old farmer who produces rushes said the government's decision has made it certain that there is now little potential for domestic producers. "With the outlook dim, we are in no state to make more investment. I think more people are going to stop production."

A 50-year-old man who also grows rushes said, "We will have to compete by upgrading our quality. That is the only way we will be able to survive in the future."