TPP sides may cut tariffs bilaterally


The 12 countries involved in the Trans-Pacific Partnership free trade talks are considering letting members decide their tariff phaseout periods on a bilateral basis instead of adopting a unified rule, sources said.

Such an exceptional approach on tariffs, which could enable each country to retain tariffs on sensitive goods for a longer period of time, is being proposed because the whole negotiation process has been hampered by the Japan-U.S. dispute over whether Tokyo can retain tariffs on its “sacred” five farm products, the sources said Sunday.

The overriding principle behind the U.S.-led TPP is to abolish all tariffs. The 12 members have sought to allow each nation to scrap their tariffs within 10 years, in principle.

However, Japan and the United States, the two biggest economies in the TPP framework, have yet to find common ground on how to deal with Japan’s duties on key farm goods, as well as the phaseout period for U.S. auto tariffs that Washington wants to maintain as long as possible.

If the TPP members give up on adopting its basic rule — scrapping all tariffs within 10 years — it could allow both Tokyo and Washington to set longer phaseout periods for their priority goods and eventually contribute to moving the broader negotiations forward.

However, industry observers fear that such a move would dent the quality of the free trade pact, which aims to create comprehensive, high-standard trade rules.

On Sunday, ministers from the 12 TPP countries continued efforts to clinch a deal at their four-day gathering through Tuesday in Singapore, with each engaging in bilateral talks on the margins of the main session.

Akira Amari, minister in charge of the TPP talks, told reporters Sunday evening that the possibility of striking a deal by the end of the current round is “nowhere in sight.”

He added that the Japanese-U.S. talks did not take place Sunday but that plans were being formed to hold another meeting at some point if necessary. Amari and U.S. Trade Representative Michael Froman failed to make any progress over the thorny issues Saturday.

Resolving the Japan-U.S. conflict is seen as the key to successfully concluding the TPP at a reasonable date.

The TPP involves Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.