U.S., Japan OK 2 Talks on Tariffs : Trade: Sides will meet in Geneva and Washington before U.S. deadline on 100% surcharges for Japanese luxury cars.

After two weeks of sniping, U.S. and Japanese trade experts on Friday informally agreed to meet at least twice before the Clinton Administration’s deadline for imposing huge tariffs on the highest-priced autos Japan sells in the United States.

The meetings, in effect, accommodate both sides. As proposed by the Japanese, staff experts will meet June 12 in Geneva under the auspices of the World Trade Organization, officials in Washington and Tokyo said.

Then, as proposed by the United States, senior-level trade officials will confer in Washington after President Clinton meets with Japanese Prime Minister Tomiichi Murayama at the Group of Seven economic summit in Halifax, Nova Scotia, on June 15. The Washington meetings will probably be held June 20-21.

With U.S.-Japanese economic relations at their most difficult point in years, the negotiators’ goals are twofold, trade officials said. They want to resolve the dispute over the U.S. complaint that the lucrative Japanese auto market is essentially closed to American manufacturers, and also want to avoid letting the issue spill over into other diplomatic arenas, disrupting the Halifax meeting.

“We certainly do not see the Halifax summit as a negotiating forum,” a senior Administration official said. “We attach great importance to the Halifax summit, and we do not want U.S.-Japanese trade talks to derail the international economic agenda.”

The new talks were arranged as a result of meetings and an exchange of letters involving U.S. Trade Representative Mickey Kantor; Ryutaro Hashimoto, Japan’s minister of international trade and industry, and U.S. Ambassador Walter F. Mondale in Tokyo. The compromise was spelled out in a letter Kantor dispatched to Hashimoto on Friday.

At the end of last week, Kantor proposed that the two sides meet in Washington on June 20-21, while the Japanese insisted on an earlier meeting in Geneva, headquarters of the WTO.

The talks are aimed at heading off the June 28 imposition of tariffs of 100% of the import price on 13 Japanese luxury cars made by Toyota, Nissan, Honda, Mazda and Mitsubishi.

The sanctions would be applied retroactively to autos imported since May 20.

The Clinton Administration was also troubled by any move that would shift the negotiations solely into the realm of the WTO, the new international body established to referee disagreements in international commerce.

At its center, the dispute with Japan is about gaining access to the Japanese market for U.S. auto companies and, perhaps more importantly, for companies that make auto parts.

The sanctions are also intended to pressure Japan into accepting what has become the greatest obstacle: a “voluntary” agreement that its auto makers will use a specific percentage of imported parts in their vehicles.

Japan has argued that the U.S. sanctions are prohibited under the terms of the international trade agreement, signed in 1993 and just now going into effect, that established the World Trade Organization.

Japan has filed a complaint against the United States with the new body. Its regulations specify that consultations begin within 30 days of the filing of a complaint--a timetable that would be met by the June 12 session.

In a letter to Hashimoto, Kantor said he was “committed to working with you” to resolve the dispute.

But Kantor stressed that every nation has the right to use “its own domestic trade laws to address acts, policies or practices” beyond the reach of the international trade body.

However, the two countries still appear to be moving forward with different objectives. The U.S. focus in its contacts with Japan is on the substance of its complaint--that regulations and traditional practices make it nearly impossible for U.S. companies to crack Japan’s automotive market.

“Comprehensive discussions are essential if we are to resolve the outstanding issues between us,” Kantor wrote to Hashimoto.

Japan wants the Geneva meeting limited to discussing its contention that the $5.9 billion in tariffs threatened by the United States violates international trade rules.

A senior Foreign Ministry official in Tokyo, speaking on the condition of anonymity, said Tokyo’s representatives would be unwilling to discuss any of Washington’s complaints about access to the Japanese market at the Geneva meeting.

*

Gerstenzang reported from Washington and Holley from Tokyo.

* BREAKING IN

GM to sell Saturns in Japan through own dealers. D2