Business / Economy

U.S., Japan enter 'final' trade talks ahead of possible TPP agreement

by Eric Johnston

Staff Writer

Trade negotiators from the U.S. and Japan met Thursday in Tokyo to work out what they hope will be a final bilateral deal needed for the Trans-Pacific Partnership agreement.

The meeting took place as Kyodo News reported that the government was discussing a nontariff framework for certain imports in return for allowing Japan to maintain high tariffs on rice.

Along with beef, pork, wheat, sugarcane, and dairy products, rice is one of Japan’s so-called sacred sectors, where political pressure to maintain high tariffs in the face of cheaper imports from the U.S. has stymied efforts to conclude a TPP agreement.

The U.S. is pushing Japan to accept 175,000 tons of American rice above current levels, plus another 40,000 tons of rice products, for a total of 215,000 tons. The Japanese government has said it cannot accept more than an additional 50,000 tons of rice.

According to Kyodo, Japan is also considering expanding imports of rice from Australia under a special quota, the amount of which is expected to be around 12 percent of that for the United States.

Despite the tough negotiations so far, Prime Minister Shinzo Abe expressed confidence ahead of the bilateral meeting.

“We’re approaching the finish line,” Abe said at a symposium in Tokyo on Thursday morning.

Japan is also moving toward reducing tariffs over the next 10 to 15 years on imported beef from the current 38.5 percent to around 10 percent and tariffs on imported pork, which are as much as ¥482 per kilogram, to about ¥50 per kilogram, also within at least a decade. That’s under the condition that Japan would be allowed to temporarily raise the tariff again if there is a sudden increase in imports.

While Japan is anxious to guard its politically sensitive agricultural sector against cheaper imports, the U.S. wants to protect its politically sensitive auto parts sector, especially ahead of the U.S. presidential election late next year. Tough negotiations to eliminate tariffs on parts where both U.S. and Japanese firms fiercely compete have yet to produce a final agreement.

If Tokyo and Washington do conclude negotiations, it’s expected to boost talks later this month between the 12 countries negotiating the broader TPP deal.

While the U.S. Congress granted President Barack Obama the authority last month to negotiate TPP, it remains unclear whether a final deal would be approved by the legislative branch, given stiff opposition from many trade groups, small businesses, unions, environmentalists, consumer rights advocates, and human rights groups.