Japan's car exports to EC to be cut further

BRUSSELS - Japan has agreed to cut still further the number of cars it exports to the European Community this year, although still negotiating the size of the reduction with the European Commission, writes Sarah Lambert.

After three days of talks in Tokyo the two sides were still far apart, but EC Commission officials said they were hopeful of an accord after another round of negotiations in September.

'Yes, you could say that the Japanese Ministry of International Trade and Industry (Miti) has taken on board the idea that it is going to have to cut deeper, but because we even have problems on agreeing export numbers, it will be even harder for us to agree by how much,' a Commission official said yesterday.

In April, under Commission pressure, Tokyo agreed to cut exports by 9.4 per cent in the light of a market slump then predicted as a 6.5 per cent fall in demand for new cars and light commercial vehicles.

But, with the exception of the UK, all European markets have fared even worse. 'June, for example, was very, very bad news indeed,' an official said, predicting a drop in EC new car sales this year of between 15 and 16 per cent. The talks also focused on the establishment of a proper adjustment mechanism to better match imports to demand in future.