China and Japan held talks on establishing a consultation mechanism for "orderly trade" in farm produce on Tuesday and Wednesday in Beijing, said the Chinese foreign trade ministry.

"We talked over the consultation mechanism with Japanese officials on Tuesday, and the China Chamber of Commerce for Importers and Exporters of Foodstuffs, Native Produce and Animal Byproducts (CCCFNA) carried on the meeting on Wednesday," said Zhang Kening, vice-director general of the foreign trade administration department of the Ministry of Foreign Trade and Economic Cooperation (MOFTEC).

Zhang said the mechanism will be non-governmental and carried out by the CCCFNA and the China Chamber of Commerce for Importers and Exporters of Light Industry Products and Arts and Crafts (CCCLA).

Under the mechanism, the two chambers of commerce are expected to meet with their Japanese counterparts on bilateral trade of three farm products: onions, mushrooms and tatami rushes.

"The mechanism is a general one, and any subjects that interest both sides could be covered, including market demand and product quality, quantity and pricing. But we are still at the starting point and have yet to work it out," Zhang told China Daily in an interview.

The mechanism was agreed upon by Chinese and Japanese foreign trade ministers to solve their trade row over the three farm products on December 21. It is expected to help prevent future trade friction between the two countries from having a similarly damaging impact, said Li Guanghui, a senior researcher with the Chinese Academy of International Trade and Economic Cooperation, a MOFTEC think tank.

Japan imposed temporary import curbs on imports of the three farm products, mostly from China and valued at about US$150 million each year, from April 23 to November 8, 2001.

China retaliated in June last year with 100 percent tariffs on imports of cell phones, automobiles and air conditioners from Japan, totaling about US$1 billion each year.

The two sides reached a last-ditch agreement on the dispute and agreed to set up a consultation panel to explore and enhance bilateral farm trade.

Officials from the Japanese Foreign Ministry, the Ministry of Agriculture, Forestry and Fisheries and the Ministry of Economy, Trade and Industry traveled to Beijing on Tuesday to discuss timing of the establishment and management of the panel.

But Zhang Kening said, "You cannot expect it (the mechanism) to be formed in months. It takes time to persuade Japan to give up its chronic high protection of the agriculture industry and become more open to farm imports. It can take years."

He said the mechanism is economically motivated because Japanese firms invest heavily in China and sell back the three farm products to Japan.

(China Daily January 10, 2002)