Gains Reported in Japan Import Talks : Trade: Suggestions are exchanged on lowering the barriers. An envoy meets with President Bush.

U.S. Trade Representative Carla Anderson Hills said today that progress has been made in talks to end Japanese barriers to imports, but a Senate leader said an interim report on the negotiations showed more barriers have to be lowered.

The talks to remove Japan’s so-called structural barriers to foreign goods opened Monday and were to end Tuesday, but have been extended into today.

At the White House, Special Envoy Nobuo Matsunaga, sent here for the talks by Japanese Prime Minister Toshiki Kaifu, met for 30 minutes with President Bush.

Later he told reporters, “We do hope that the talks between the two governments will come to a mutual and satisfactory conclusion.”

White House spokesman Marlin Fitzwater said the interim report might not be ready until Thursday, but added that progress had been made in other U.S.-Japanese trade disputes.

Hills said the delay in completing the fourth round of the talks did not represent any setback.

“There is no deadlock. We are making progress,” she said after a speech to the National Assn. of Manufacturers. But she gave no details.

Sen. Max Baucus, chairman of the Senate Finance subcommittee on international trade, told the same group later that he had seen part of the interim report. While it showed Japan was ready to lower some barriers, others remained, he said.

Baucus, a Montana Democrat, said “the report is not all we had hoped for.” But “it does go further than I would have thought a few days ago.”

“Make no mistake about it, more progress is necessary,” he said, adding that he hoped additional progress would be evident in the final report on the talks.

In her remarks to the manufacturers, Hills renewed a warning to Japan that if its markets aren’t opened to U.S. and other foreign goods, there is a strong chance Congress would write protectionist legislation.

Baucus said he would withhold pressing a bill that would require punitive actions for continued unfair trading practices until a final report is issued in July.

Since the talks began last summer, the United States and Japan have exchanged ideas on what each can do to spur U.S. exports to help reduce America’s chronic $50-billion annual trade deficit with Japan.

At the talks this week, the Japanese submitted about 80 suggested reforms the United States could make in government policies and business practices and the Americans gave about 200 suggestions to the Japanese, U.S. officials said.

Both sides acknowledge that any changes in long-established practices would take many years to implement, and the interim report is to be a “blueprint” for later action to be defined more fully in the July report.