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Japan, U.S. begin ministerial talks on TPP in bid to resolve pesky differences

Kyodo

Japan and the United States began ministerial talks Tuesday in Washington on a much-awaited bilateral agreement seen as crucial to cementing the Trans-Pacific Partnership.

The two-day meeting between Akira Amari, minister in charge of the TPP initiative, and U.S. Trade Representative Michael Froman is taking place as President Barack Obama looks to reach a deal in time for his trip to Asia in November.

The meeting between the trade chiefs, the first since May, is aimed at breaking the deadlock over thorny bilateral issues and advancing the broader 12-member negotiations.

A USTR spokesman said the meeting “provides an opportunity to review progress, identify where gaps remain, and begin working through outstanding issues.”

After wrapping up the first day of talks, Amari told reporters in Washington that negotiations with Froman have proven to be “difficult,” but was quick to add that “it’s not that we have no clear vision (for reaching an agreement) at all.”

Prime Minister Shinzo Abe, who is in New York for the U.N. General Assembly, said Tuesday that negotiations are “in the final phase” but did not give a specific date for concluding a deal.

Talks on the TPP, which would create a massive free trade zone encompassing some 40 percent of global output, have long been stalled, due partly to bickering between Japan and the United States — the biggest economies in the TPP framework — over removal of barriers for agricultural and automotive trade.

The biggest sticking point has been Tokyo’s proposed exceptions to tariff cuts on its five sensitive farm product categories — rice, wheat, beef and pork, dairy products and sugar — and safeguard measures it wants to introduce should imports of the products surge under the TPP, which aims for zero tariffs in principle.

It is uncertain how much closer the two sides can move given that their recent working-level talks yielded little progress, negotiation sources said.

Hiroshi Oe, Japan’s deputy chief TPP negotiator, has admitted that talks with his counterpart, Wendy Cutler, Froman’s top deputy, earlier this month in Tokyo made very little progress.

One negotiation source said the hurdle for solving the outstanding bilateral problems remains “extremely high,” suggesting it was premature to bring the talks to the ministerial level.

Amari had been reluctant to meet one on one with Froman after the working-level negotiations failed to achieve any progress.

He apparently decided to ramp up efforts in response to strong calls from Washington for arranging a meeting with Froman, who has said the two sides are “now at a critical juncture in this negotiation.”

A summit of the Asia-Pacific Economic Cooperation forum scheduled for November in Beijing that Obama and leaders from other TPP countries are slated to join is seen as a chance for concluding the TPP talks, which have entered their fifth year.

But an agreement depends on whether Japan and the United States can bridge their gaps before that.

On the multilateral track, the 12 countries are arranging to hold a plenary meeting of top negotiators next month in Australia, which will likely be followed by a ministerial gathering, according to people familiar with the matter.

However, there are a number of issues over which developed and developing economies are locking horns, such as intellectual property rights, reform of state-owned firms to establish fair competition and environmental protection issues.

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