"Steel free trade between the three countries is possible as East Asia tightens economic cooperation ties, but is unlikely in the next five years," said an official with the China Association of Iron and Steel Industries.

The official, who refused to be named, said the Chinese mainland is tightening its control over steel imports and Japan, South Korea, Russia and China's Taiwan Province are the main targets of the safeguard measures, to be announced tomorrow.

With dwindling domestic demand, South Korean and Japanese iron and steel companies are wanting to sell more to the Chinese mainland.

Foreign media outlets have said chief executive officers from major South Korean, Japanese and Chinese iron and steel companies will discuss steel free trade on the sidelines of a commerce forum, to be held on Friday in Seoul.

The talks will be the first on the issue between iron and steel companies from the three nations and will widely be seen as a prelude to the establishment of a free trade block.

Once established, it is expected the trade block will create a steel market that consumes one-third of the world's iron and steel production.

Liang Cai, secretary-general of the Chinese Iron and Steel Association, confirmed he will head a delegation that includes Baosteel and Anshan Iron and Steel Corp to the Seoul forum, but would not say if the three sides will negotiate on the feasibility of free trade.

Japan's Ministry of Economy, Trade and Industry announced late last month that Chinese and Japanese government officials in charge of the iron and steel industry and representatives from major iron and steel companies from the two countries will meet in Tokyo on November 28.

It said they will talk about industrial policies, steel trade, corporate operations and production management.

The Japanese Government and company officials said they deem it necessary to set up regular dialogue with the Chinese Government and iron and steel companies.

Since China implemented its temporary steel safeguard measures in May, the Japanese Government and company representatives have been seeking enhanced communication with their Chinese counterparts in the hope of impacting on China's industrial policies.

(China Daily November 18, 2002)