• Kyodo

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Trade minister Takeo Hiranuma wrapped up two days of talks with senior U.S. trade officials Wednesday, unable to bridge the gap over Japan’s demand for compensation for temporary safeguard tariffs the U.S. recently imposed on steel imports.

“We remained apart,” the minister of economy, trade and industry said after emerging from a meeting with U.S. Trade Representative Robert Zoellick.

Hiranuma, who met with Commerce Secretary Don Evans on Tuesday, said he and Zoellick will meet again in Paris when they attend the May 15-16 ministerial meeting of the Organization for Economic Cooperation and Development.

The Paris meeting is shaping up to be the last chance for the two countries to resolve the steel issue without plunging into a tit-for-tat trade war.

Japan faces a May 17 deadline to decide whether to take retaliatory action over the U.S. decision to impose three-year tariffs of up to 30 percent on an array of steel imports to help struggling domestic steelmakers.

Under World Trade Organization rules, a country seeking to impose countervailing tariffs on American goods is required to notify the WTO of the step by that date.

The higher U.S. tariffs, which went into effect March 20, have prompted Japan, the European Union and other steel-exporting countries to file complaints with the WTO.

Hiranuma said he told Zoellick that Japan will impose countervailing tariffs if the U.S. rejects Tokyo’s call for compensating Japan for potential export losses due to the U.S. import curb.

Zoellick effectively rejected the demand, saying the United States has no obligation to offer compensation under WTO rules, a Japanese official said.

“There is still time before Japan makes a final decision. But we are very pessimistic about a favorable answer from the U.S. on the compensation issue,” the official said.

Hiranuma said Zoellick voiced concerns over retaliation by Japan.

Hiranuma quoted Zoellick as saying any immediate retaliation would be unprecedented in the history of the WTO and would be unacceptable to the U.S.

The U.S. seems to want to settle the issue by letting more Japanese steel products be exempted from the higher tariffs.

Hiranuma said Zoellick told him the U.S. is ready to consider more exemptions for Japan.

The U.S. is now selecting steel products to be exempted from the import curb, considering the effect on U.S. industries.

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