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Transport minister Chikage Ogi indicated Friday that Japan will allow Delta Air Lines to transfer some of its slots to FedEx Corp. at Narita airport, as the United States has requested.

“We’ll give the matter favorable consideration,” Ogi, minister for land, infrastructure and transport, told a regular press briefing.

Ogi made the comment as U.S. Transportation Secretary Norman Mineta warned Wednesday of sanctions against Japanese airlines if Tokyo blocks the transfer, making the issue another potential source of trade friction between Tokyo and Washington.

With Friday’s decision by Japan, any U.S. retaliation is likely to have been averted.

In the wake of the Sept. 11 terrorist attacks, Delta withdrew most of its services to Japan. As a result, the U.S. airline is hoping to transfer to FedEx the slots it had obtained from the U.S. cargo carrier in 1998.

Japan notified the U.S. department Feb. 25 of its intention to refuse the planned transfer, insisting the slots should be put in a pool for reallocation to other carriers.

The U.S. has said the proposed transfer is fully in accord with the 1998 U.S-Japan aviation agreement and with international guidelines, but Tokyo had said FedEx already has numerous slots and committed unfair practices, including flying its cargo planes without cargo in order to maintain its number of slots.

“They have shown they are ready to improve,” Ogi said when asked why the ministry had changed its policy.

Delta plans to return the slots to FedEx on March 31.

Steel redress pursued

Trade chief Takeo Hiranuma has reiterated Japan’s intention to continue negotiating with the United States over compensation for potential losses caused by U.S. import curbs on steel products.

Hiranuma’s comment came after U.S. Trade Representative Robert Zoellic reportedly said the U.S. is ready to consider Japan’s request for compensation to offset the damages caused to Japanese steel exporters.

“We can lower barriers somewhere else and meet the requirements in the WTO fashion,” Zoellick said Wednesday. , according to U.S. media reports.

The U.S. would consider “reasonable” requests in terms of the level of compensation, which is the case for Japan but not the European Union, Zoellick said.

Zoellic’s comment is worth considering, Hiranuma said, and Tokyo will continue negotiating with the U.S.

Earlier this week, the U.S. imposed three-year import tariffs of up to 30 percent on 14 steel products to protect the domestic steel industry, saying U.S. producers are suffering from the increase in imports.

Under WTO rules, member countries can raise import tariffs for up to four years to safeguard domestic producers from a surge in imports.

WTO rules also allow member states to request cash compensation or lower tariffs on other import items to make up for the adverse effects of safeguard measures on their trade.

Japan accordingly demanded $169 million in compensation from the U.S. last week for the possible losses incurred by the U.S. import curbs.

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