France says talks with China failed to solve Cognac dispute

PARIS (Reuters) -Talks between China and France on Thursday failed to end a dispute between the two countries over Cognac tariffs, French Finance Minister Eric Lombard said, although he added the door was open for further discussions.

After trade tensions flared between Beijing and Brussels, China began an anti-dumping investigation into European Union brandy in January. It was extended in April, giving EU exporters more time to find a way to avoid Chinese penalties.

"At this stage, the economic dialogue has not led to a definitive solution to this dispute," Lombard told journalists after wide-ranging talks with visiting Chinese Vice Premier He Lifeng at the finance ministry in Paris.

"I know, having discussed it at length with His Excellency, that the door to discussion remains open," he added.

In France, the Chinese anti-dumping probe is regarded as retaliation for Paris' support for EU tariffs on imports of Chinese electric vehicles.

"The investigating authorities will make a decision on the basis of investigation in accordance with laws and regulations and on the basis of the facts," He said.

Cognac lobby, the National Interprofessional Bureau of Cognac said in a statement the absence of an agreement could have "catastrophic effects" on its industry and region, saying that every day that passed without a resolution was painful.

"We expect full mobilisation of our government to avoid the definitive imposition of these tariffs on July 5," it said.

Separately, the French agriculture ministry said the two countries had signed two protocols to formalise an agreement to allow unaffected regions to continue poultry exports in the event of a bird flu outbreak in France, and to provide access for French poultry to the Chinese market.

(Reporting by Leigh Thomas; additional reporting by Gus Trompiz and Dominique Patton in Paris and Xiuhao Chen in Beijing; Editing by Makini Brice, Alex Richardson, Tomasz Janowski and Barbara Lewis)