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China and the European Union (EU) are likely to resolve their disagreement over China's tariffs on imports of auto parts through continued consultation.

"The common understanding is we are not interested in litigation but in the resolution (of the dispute)," visiting EU director-general for Enterprise and Industry Heinz Zourek said.

Zourek made the remark after his meeting with Zhang Guobao, China's vice-minister of the National Development and Reform Commission.

Serge Abou, an ambassador with the European Commission's delegation to Beijing, who also attended the talks with Zhang, said it was "the first time" the European side had received a clear message that China wanted to discuss the issue with the EU.

Abou said the delegation would convey the message to authorities in Brussels.

He said the two sides are still at the consultation stage and do not want to go through the litigation process.

The Chinese side is yet to comment on the meeting.

The EU, together with the United States, filed complaints on March 30 to the World Trade Organization (WTO) against China, accusing the country of violating its WTO commitment by imposing a discriminatory tariff regime on foreign car parts.

According to a regulation on the imports of vehicles implemented last April, China applied the tariffs for "whole vehicles" (25 percent) to imports of spare parts making up 60 percent or more of the value of a final vehicle, although under its WTO commitment the country agreed it would lower its tariffs to 10 percent by July this year.

Major US and EU automakers said the regulation hindered their access to China, one of the world's largest auto markets.

The two sides have previously held consultations on the issue, but the EU and the US have not brought the case before a WTO panel to kick off litigation, despite having the option according to WTO rules.

The auto parts issue was a side topic of Zourek's meeting with the Chinese officials, which covered the development of the whole industry.

"The development in China's car industry is unbelievable," Zourek said.

He said they discussed, at the working group-level, issues ranging from legislation in the car industry to reduction of emissions pollution in cars to the future design of cars, such as how to make them less energy-intensive and less prone to damage in accidents. They also talked about how to facilitate investment in China's car industry.

Zourek also met officials with China's Administration for Quality Supervision, Inspection and Quarantine for the EU-China Regulatory Dialogue; the Ministry of Science and Technology in order to explore a means of establishing co-operation in space technologies; and the Ministry of Information Industry to discuss regulatory co-operation.

The director-general did not disclose the detail of the meetings, but called the talks "constructive" and "fruitful."

During his visit Zourek will also attend two seminars one on corporate social responsibility and the other on toys, in particular the EU legislation in relation to safety and environmental requirements on imported toys.

According to EU statistics, 80 percent of toys imported into the EU come from China.

(China Daily July 12, 2006)