Japan eyes trade pact concessions as US talks start

America puts pressure on Japan to scrap tariffs on agricultural products as part of Pacific deal

PUBLISHED : Wednesday, 19 February, 2014, 1:33am
UPDATED : Wednesday, 19 February, 2014, 1:33am

Japan could make concessions on tariffs on some sensitive farm products as US and Japanese officials began talks ahead of next week's high-level multilateral negotiations on a US-led free trade deal, a key cabinet minister said.

A deal between the United States and Japan, the two biggest economies taking part in talks on the Trans-Pacific Partnership (TPP) pact, is vital if a broad agreement is to be clinched at talks among all 12 participants in Singapore from Monday.

The US had hoped to wrap up the TPP, which aims to cut tariffs in countries forming 40 per cent of the world economy and set common standards on other issues, by the end of last year.

But obstacles remain over issues including Japanese protection of sensitive agricultural products, such as rice, and US carmakers' fears of increased competition from Japan.

I don’t think anyone thinks there will be no change in any of the tariff lines

"If we were not to move even slightly on any product line in the five categories [that Japan has vowed to protect], that would not be negotiations," Japanese economics minister Akira Amari told a news conference yesterday.

"I don't think anyone thinks there will be no change in any of the tariff lines."

Washington has been pressing Tokyo to scrap all tariffs in the five categories of rice, beef and pork, dairy products, wheat and sugar. These include 586 product lines. Japanese media said US pressure was especially strong on the categories of beef and pork, and dairy products.

Japan wants the United States to set a timeline for scrapping tariffs of 2.5 per cent on imports of passenger cars and 25 per cent on light trucks.

Japan's politically powerful farm lobby is bitterly opposed to concessions, but Prime Minister Shinzo Abe's government has designated the pact as a key part of a growth strategy to revive the world's third largest economy.

Abe took office in December 2012 vowing to revive the economy with his "Three Arrows" of hyper-easy monetary policy, fiscal spending and a growth strategy including deregulation and structural reforms. So far, many investors have been disappointed with progress on the growth strategy.

"From here on, I think that the 'arrow' with the longest flight time will be TPP," said Chief Cabinet Secretary Yoshihide Suga.

Washington still wants to complete the TPP deal this year, a senior US administration official said on Friday.

The other countries engaged in the TPP talks are Australia, Brunei, Chile, Canada, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Ministerial meetings are scheduled to start in Singapore on February 22.