Japan and the United States will resume working-level talks in Tokyo Tuesday on finding common ground over a wider Pacific free trade pact, with U.S. President Barack Obama due to arrive in Tokyo on Wednesday.
The fresh round of negotiations — the last chance to break the stalemate before the two leaders meet — comes after Tokyo and Washington failed to resolve their differences during ministerial talks in Washington last week.
U.S. trade officials are arriving in Tokyo on Monday afternoon, and Acting Deputy U.S. Trade Representative Wendy Cutler is expected to engage in comprehensive discussions with Hiroshi Oe, Japan’s deputy chief TPP negotiator, from Tuesday.
The two sides are aiming to secure a bilateral deal — seen as necessary to reach a broader 12-country agreement on the Trans-Pacific Partnership — at the summit between Obama and Prime Minister Shinzo Abe on Thursday. The main sticking point remains market access for Japanese beef and pork.
Japan’s minister in charge of TPP negotiations Akira Amari said after meeting with U.S. Trade Representative Michael Froman in Washington last week that they still have “big differences,” although “the gaps are getting smaller.”
According to negotiation sources, Japan is considering cutting tariffs on beef imports from the United States to around 15 percent from the current 38.5 percent.
The latest proposal, if accepted by Washington, would give U.S. beef exporters better access to the Japanese market compared with Australia, with which Japan has recently agreed in a bilateral free trade deal to lower its beef tariffs by up to half.
But Washington is calling on Tokyo to lower its tariffs to below 10 percent after giving up on its demand for the complete abolishment of beef tariffs, and it is unlikely the United States will accept the current proposal, the sources said.
The Abe-Obama summit is seen by many as the catalyst that might break the TPP deadlock, but Amari said Saturday the two countries have yet to reach a stage where a broad agreement on the TPP can be expected at the summit.
Abe has instructed Amari to accelerate negotiations ahead of the summit.
While the U.S.-led TPP aims at scrapping all tariffs in principle, Tokyo has sought to retain some level of tariffs on five farm product categories — rice, wheat, beef and pork, dairy products and sugar.
The two have yet to find a solution over the phase-out period of U.S. tariffs on Japanese automobiles, one of Japan’s main exports.