JAPAN: Glum outlook for reaching TPP agreement in Nov

Monday 29 September 2014

Date: 27 September 2014

Type: News

Source: The Japan News

Keywords: TransPacific Partnership Agreement, TPPA

By Kunihiko Yasue and Miyuki Yoshioka / Yomiuri Shimbun Staff WritersWASHINGTON — The forecast looks cloudy for reaching a broad agreement in November among countries participating in the Trans-Pacific Partnership free trade negotiations, as Japan and the United States remain divided over specifics on sensitive issues.

Akira Amari, state minister in charge of TPP issues, and U.S. Trade Representative Michael Froman ended their ministerial meeting Wednesday without making progress on pending trade issues. During the two-day meeting in Washington, Japan made a new compromise proposal, but the United States kept a firm stance.

Amari told reporters after the meeting, “We presented a flexible proposal and received a positive response to some extent, but discussions afterward didn’t go well.”

The U.S. side said in a statement that they failed to make further progress on the key outstanding issues.

In April, Japan and the United States reached a basic agreement to significantly cut Japanese tariffs on U.S. beef and pork. However, their subsequent talks on the details have stalled, as the two countries remain split over such issues as conditions for invoking safeguard measures intended to bring the Japanese tariffs back to the current levels in the event of an import surge of U.S. beef and pork.

During the meeting, Japan apparently made a new proposal to stiffen such safeguard conditions — a move that would favor U.S. beef and pork exports.

“I gave rather challenging instructions [to the agriculture ministry and relevant bodies] to make a proposal that would stretch to the limit in the negotiations,” Amari said.

The two countries held the ministerial meeting without setting a negotiation time. But the talks lasted for four hours on the first day and ended in less than an hour on the second day.

“Japan pulled a wild card, but the United States never made a compromise,” a source familiar with the talks said.

Washington also took a tough stand on Japan’s call for the immediate removal of U.S. tariffs on automobile parts.

U.S. holds firm

Behind such an unyielding stance are political circumstances in the United States. The administration of President Barack Obama apparently believes that the ruling Democrats would be at a disadvantage in the Nov. 4 midterm election if Washington were to easily compromise with Japan on TPP issues before then.

Labor unions and environmental groups comprise support bases for the Democrats. The Obama administration has been wary that a TPP deal may result in worsening U.S. employment by driving domestic companies to relocate to overseas and causing more cost-competitive products to flow into the United States.

The Republican Party, which has many members supporting the TPP framework, has also been critical that the Obama administration has yet to clinch a deal with Japan to scrap tariffs on U.S. beef and pork. Major U.S. farmers’ groups, including the National Pork Producers Council, have called for a TPP deal without Japan if the country continues to refuse to remove the tariffs. The conclusion of the TPP negotiations with the tariffs remaining could provide an excuse for the Republicans to criticize the Democrats. In light of this, the U.S. side has found it necessary to proceed with the TPP talks while giving consideration to the upcoming election.

The bilateral consultations between Japan and the United States — key TPP negotiating countries — must be concluded first to pave the way for the overall TPP negotiations to reach a board agreement. Obama apparently hopes for such an agreement to come before Asia Pacific Economic Cooperation (APEC) leaders meet on Nov. 10-11, after the U.S. midterm election.

Regarding Japan’s future plans on TPP matters, Amari indicated that Japan would aim to make other participating countries aware of Washington’s uncompromising attitude and build a consensus to induce a U.S. compromise.

“We want to speed up bilateral talks with other countries rather than the United States. We can then have ministerial meetings with 12 participating countries,” he said.

Both Japan and the United States have been concerned that the TPP negotiations could fall apart unless a broad agreement is reached in November. Washington is highly likely to seek a ministerial meeting between Amari and Froman after continuing working-level talks for a while. The two countries will face a test as to whether they can narrow their differences to create a new economic framework.###

See online : The Japan News

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