THE U.S.--JAPAN TRADE SHOWDOWN : Talks Yielding Little Progress, Both Sides Say : International relations: Top officials Mickey Kantor, Ryutaro Hashimoto will lead the final stage of negotiations today.

If American body language is any guide, an agreement that will avert the imposition of punishing tariffs on $5.9 billion worth of imported Japanese luxury cars may be on the horizon. If verbal statements are any indicator, then all bets are off.

U.S. negotiators emerged from their fourth day of automotive and auto parts trade talks Sunday appearing relaxed and upbeat compared to previous appearances. U.S. Commerce Undersecretary Jeffrey Garten went so far as to say, “We’ve had a good morning.”

But Garten couldn’t point to any specific progress, and the Japanese negotiators presented a more pessimistic face. There has been “absolutely no progress whatsoever” on the central issue of whether Japanese auto manufacturers can be prodded to use more U.S.-made components in their cars, said Japanese Deputy Trade Minister Yoshihiro Sakamoto.

Both negotiating teams were awaiting the arrival of their superiors, U.S. Trade Representative Mickey Kantor and International Trade and Industry Minister Ryutaro Hashimoto.

Kantor arrived late Sunday, and Hashimoto was to arrive today to begin the final stage of negotiations before a deadline of midnight Wednesday for the sanctions. If no accord is reached by then, the United States has vowed to impose 100% tariffs on 13 models of Japanese luxury cars.

There has been speculation that the Japanese delegates are making the situation look particularly dire so that Hashimoto can claim credit for a breakthrough, if and when an accord is reached. Hashimoto is said to want to become prime minister of Japan.

But not even the jovial Americans reported any concrete developments, and said that would have to await Kantor and Hashimoto.

“The experts have resolved some technical issues,” said Ira Shapiro, general counsel for the U.S. Trade Representative, who has been leading the U.S. team with Garten. He was referring to sub-negotiating groups working on specific questions involving Japanese auto dealerships and car repair shops.

But, Shapiro added, there has been no real movement on the major philosophical differences between the U.S. and Japanese sides.

“On the big [issues], we’re going to dish those up to the ministers, because we haven’t been able to resolve them in the last few days,” Shapiro said.

Kantor told reporters on his arrival at the Hotel Intercontinental that President Clinton “has directed me to come here and make our best efforts to see if there is any way to open Japanese markets and expand trade as we have been trying to do.” Of prospects for a settlement, he said only, “I am realistic.”

In general, the U.S. team says the Japanese auto and parts markets are unfairly closed to foreign competition. The Japanese respond that their markets operate fairly, and complain that the threatened sanctions would violate the rules of international trade.

Beyond the political theater and atmospherics of the meetings lurks the danger of a painful trade war between the worlds’ two biggest economies, with Japan taking retaliatory action against unspecified American products should the luxury-car sanctions indeed be imposed.

Awareness of this has given the Geneva talks a sense of urgency and purpose that was absent from recent U.S.-Japanese auto talks at the Canadian resort of Whistler, Garten said.

“At Whistler, there was a lot of posturing and a lot of rehashing of old positions,” he said. “The mood here has been more serious, and there has been almost no polemics, or ideology,” but instead a sense that something has to be accomplished, he said.

That was underscored Sunday in Washington by Vice President Al Gore, who reiterated the Administration’s tough stance. Gore said on ABC-TV: “We’re not going to blink, I can tell you that. If we don’t get an agreement . . . the sanctions will be [in effect].”