China says it is working with France on trade differnces no sign yet of a cognac deal

BEIJING/PARIS - China and France have agreed to resolve their trade disputes through dialogue, Chinas foreign ministry said on Friday, though there was no indication that agreement had been reached in talks on lifting Chinese levies on European brandy.

Talks to resolve the cognac dispute accelerated this week with Chinas commerce minister Wang Wentao meeting his French counterpart in Paris on the sidelines of an OECD conference, and technical talks on the matter taking place in Beijing.

The latest round of negotiations have raised hopes of a settlement, two industry sources with knowledge of the discussions said.

The two sides have reached consensus on resolving economic and trade issues through dialogue and consultation, the Chinese foreign ministry said after a call between the Chinese and French foreign ministers.

Chinese anti-dumping measures that applied duties of up to 39% on imports of European brandy - with French cognac bearing the brunt - have strained relations between Paris and Beijing.

The brandy duties were enforced days after the European Union took action against Chinese-made electric vehicle imports to shield its local industry, prompting Frances President Emmanuel Macron to accuse Beijing of pure retaliation.

The Chinese duties have dented sales of brands including LVMHs Hennessy, Pernod Ricards Martell and Remy Cointreau.

Beijing was initially meant to make a final decision on the duties by January, but extended the deadline to April and then again to July 5.

China is seeking to strengthen trade ties with the 27-member bloc as relations with the United States have soured in the escalating trade war.

France will not compromise on ... the protection of its industries, such as cognac, French trade minister Laurent Saint-Martin said after talks with Wang on Wednesday.

Chinese officials, meanwhile, signalled to industry officials during three rounds of technical meetings in Beijing this