Japan and the US have found "common ground" to forge a two-way trade deal, but may not be able to resolve remaining sticking points in time for a mid-May meeting of top negotiators seeking a broad regional deal, a senior Japanese official said.
Marathon talks during President Barack Obama's visit to Tokyo last week yielded progress that was hailed by the two sides as a "key milestone". However, both stopped short of announcing a deal vital to the Trans-Pacific Partnership (TPP), a 12-nation bloc that would extend from Asia to Latin America.
The positive tone, however, was a contrast to the emphasis on "gaps" after previous rounds of talks on a bilateral deal that was at a stalemate due to differences over access to Japan's agriculture market and both countries' car markets.
"What Obama's visit produced after many lengthy negotiations was a common ground on which the two sides believe we can continue to work to find a mutually acceptable solution," the senior Japanese official said.
"We no longer have to worry that the lack of a Japan-US pathway is going to block negotiations with other countries. This is a very important landmark Obama was able to produce," he said. But he added he was "not optimistic" that Washington and Tokyo could work out remaining issues "in a month or two".
Negotiators from the 12 TPP countries are to meet in Vietnam in mid-May, followed by a gathering of Asia-Pacific trade ministers in China on May 17-18. Obama and Japanese Prime Minister Shinzo Abe are likely to meet next at an Asia-Pacific summit in China in November.
Both Obama and Abe have domestic constituencies keen to see their leaders stick to rival stances, with a US demand that Japan scrap all tariffs and Japan's pledge to protect politically powerful farmers in five sectors including rice, beef and pork.