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Issue #591

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2014 Media Kit

Japan, fresh from Australia pact, says US trade talks “difficult”

By: | at 04:17 PM | International Trade  

Japan, fresh from clinching a trade deal with Australia, said it hoped for a similar result in negotiations with the United States and also for a broad regional trade pact, but said the talks would be difficult.

Japan and the United States are pushing for a two-way trade deal, a crucial part of a broad U.S.-led Trans-Pacific Partnership (TPP), before U.S. President Barack Obama arrives in Japan this month.

U.S. Trade Representative Michael Froman will hold talks with Japanese Economy Minister Akira Amari on Wednesday.

The TPP is a centrepiece of Obama’s push to expand the U.S. presence in Asia.

Japanese Prime Minister Shinzo Abe has touted the multilateral framework as a key part of his growth strategy but the outlook for a Japan-U.S. deal by the summit is cloudy as both sides accuse each other of inflexibility.

Australian Prime Minister Tony Abbott and Abe confirmed a basic trade agreement on Monday, overcoming sticking points on beef and autos that had threatened to stymie a deal, and agreed to work towards signing it as soon as possible.

“We hope that the fact that we could reach an agreement on the (Australian) deal will have a positive impact on the TPP and other regional economic agreements,” Japanese Chief Cabinet Secretary Yoshihide Suga told a news conference.

Suga said the United States and Japan were making every effort to resolve outstanding issues.

“The situation is very difficult, but we hope that a positive role can be taken towards a broad agreement on this.

“Dogmatic”

The United States wants Japan to open its rice, beef and pork, dairy and sugar sectors - politically powerful sectors that Abe has vowed to defend. Japan wants a timetable on U.S. promises to drop tariffs of 2.5 percent on imports of passenger cars and 25 percent on light trucks.

Froman said on arrival in Japan the TPP - which aims to scrap all tariffs - had higher standards than the Japan-Australia deal, Kyodo news agency reported.

Under that pact, Japan will reduce but not scrap tariffs on farm products such as beef, an outcome some in Tokyo hope will give them ammunition against U.S. demands to eliminate tariffs on politically sensitive farm products

But a senior Japanese government official cautioned that an agreement with the United States before Obama’s visit was unlikely, though not impossible.

“The U.S. is not flexible. It keeps a dogmatic position on Japanese tariffs,” said the official, who declined to be identified because of the sensitivity of the talks.

“That may change. It’s doable. What we are telling them is a well-considered option - improved market access through tariff reduction short of elimination.”

Froman told U.S. lawmakers last week that Japan’s reluctance to lower trade barriers was holding up agreement on the TPP, a 12-nation grouping that would stretch from Asia to Latin America.

“Both sides appear more focused on apportioning blame than on outlining possible compromises,” wrote Tobias Harris, an associate at political risk consultancy Teneo Intelligence. (Reuters)