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TPP exemption bid worries Mexico leader

Visiting president urges Japan to seek end to all tariffs in spirit of pact

Kyodo

Mexican President Enrique Pena Nieto has expressed concern about Japan’s attempt to win tariff exemptions for rice and other farm products when it joins trade talks on the Trans-Pacific Partnership agreement.

In written replies to questions submitted by Kyodo News ahead of his four-day visit to Japan from Sunday, Mexico’s president said Japan should respect the principle of seeking to eliminate all tariffs on trade between TPP members.

Pena Nieto, who is scheduled to meet with Prime Minister Shinzo Abe on Monday, pointed out that members of the TPP negotiations have agreed to seek a high level of trade liberalization.

“Japan has to also comply with this kind of high ambition,” Pena Nieto said.

Mexico formally joined the U.S.-led TPP talks in November 2012 after announcing its desire to participate in 2011, along with Canada.

Abe formally announced Japan’s interest in taking part last month.

During Abe’s first face-to-face meeting with U.S. President Barack Obama in February in Washington, the two leaders confirmed that Japan is not required to commit to the zero-tariff principle before joining and may be able to win exemptions in the course of negotiations.

Japan’s aging farmers, traditional supporters of Abe’s Liberal Democratic Party, have strongly opposed joining the TPP talks because they fear that the resulting liberalization will create an influx of cheaper agricultural imports that will wipe them out.

As a result, the government is seeking to protect some farm products, including rice, wheat and sugar, from tariff elimination.

The free-trade talks involve Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. By adding Japan, the TPP could account for nearly 40 percent of the world’s gross domestic product.

While welcoming Japan’s participation, Pena Nieto said Mexico had a high regard for the matters already agreed to with the other members before it joined and would not want to adversely affect the talks.

For the TPP talks to be completed by the end of the year, Pena Nieto said he “hopes Japan will share the same idea” with Mexico, noting there has already been much progress in the TPP talks.

Pena Nieto also said members of the TPP talks will greatly benefit if Japan, the world’s third-largest economy, becomes part of the new free-trade framework.

“The Japanese economy is starting to get back on a growth path,” he said, while referring to Abe’s economic push for drastic monetary easing and massive fiscal spending to temporarily juice the economy without structural reforms.

Japan and Mexico already have a bilateral free-trade agreement.

Delay possible: Takaichi

Kyodo

Liberal Democratic Party policy chief Sanae Takaichi said Sunday negotiations on entering the U.S.-led Trans-Pacific Partnership may not conclude by the end of this year if Japan’s arguments are not accepted.

“Japan is a player with a big economy,” Takaichi said on an NHK program. “It’s possible that the negotiations will be concluded later than planned.”

As for the government’s estimate that the nation’s ¥7.1 trillion worth of agricultural produce would be slashed to ¥3 trillion if it drops all tariffs to join the TPP, Takaichi said this was “the worst scenario.”