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UPDATE 1-US disappointed with Japan car scrappage program

Published 02/03/2010, 09:59 AM
Updated 02/03/2010, 10:03 AM

(Adds background on spat, more Kirk quotes)

WASHINGTON, Feb 3 (Reuters) - The United States is disappointed that Japan has limited the number of U.S. autos that qualify for that country's "cash for clunkers" program, the top U.S. trade official said on Wednesday.

"This is particularly unfortunate in light of its recent announcement to open opportunities for U.S. autos to qualify for its program, which was a welcome step," U.S. Trade Representative Ron Kirk said in a statement urging further changes to Japan's Eco-friendly Vehicle Purchase Program.

The spat over Tokyo's program reflects larger U.S. frustration over the huge automotive trade imbalance with Japan as U.S. automakers struggle to get back on their feet in the face of weak domestic demand.

Japan announced changes last month to allow more U.S. cars to qualify for it fleet renewal program.

But Kirk said the list of qualifying U.S. models released on Wednesday by Tokyo fell short of expectations since it was based on U.S. Environmental Protection Agency "city" mileage ratings, instead of "combined city/highway" mileage ratings.

"We will continue to urge Japan to implement its program in a manner that is transparent and as inclusive of U.S. autos as possible. We will also continue to monitor developments closely to ensure U.S. autos indeed benefit from Japan's 'cash-for-clunkers' program," Kirk said.

Deputy U.S. Trade Representative Demetrios Marantis was in Tokyo on Monday for talks with Japan on the auto issue and other bilateral trade irritants.

(Reporting by Doug Palmer; Editing by Doina Chiacu)

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