Japan and the United States have reached a new agreement in on going trade talks on auto and auto parts.

The agreement came after three days of intensive negotiations between Ryutaro Hashimoto, head of the Ministry of International Trade and Industry and U.S. Trade Representative, Mickey Kantor.

Under the agreement, the U.S. will not impose sanctions based on Section 301 of the Trade Act.

For their part, the Japanese will withdraw a complaint previously submitted to the World Trade Organization. At a press conference following the talks, Kantor said, “We have achieved genuine gains. The agreement will begin to create a level playing field.

Hashimoto, attributed the success of the negotiations to Kantor’s “realistic” approach.

He also claimed that the agreement was not only a success for the two nations, but for the fledgling WTO as well.

He added that all agreements reached would be applied to every trading partner across the board.

The agreement effectively defuses persistent U.S. demands for the Japanese government to enforce “voluntary plans” on domestic auto makers.

Those would require makers to outline their intended purchases of foreign car parts and to guarantee their implementation.

Japan has consistently refused to set numerical targets. The agreement will be reviewed by both sides in 1998.