Two challenges lie ahead as Washington, Japan move forward TPP talks

WASHINGTON, Nov. 6 (Xinhua) -- The United States and Japan face "two challenging and difficult issues" to wrap up the ongoing Trans-Pacific Partnership (TPP) trade negotiations by the end of this year, a U.S. trade official said here Wednesday.

The first challenge was the market access negotiations, particularly the tariff negotiations for agricultural products in Japan, Wendy Cutler, acting deputy U.S. trade representative said at a panel discussion on the Japanese economic policy held by Peterson Institute for International Economics, a Washington-D.C. based think tank.

Japan had largely excluded sensitive agricultural products under its traditional free trade agreements, also known as economic partnership agreements, but this approach would not work in the TPP negotiations, which aimed for "ambitious and comprehensive outcome," said Cutler, who directly oversees U.S. engagement with Japan in the TPP negotiations.

Japan, which joined TPP negotiations for the first time in July, is under pressure to open up its agricultural sector as the U.S. aims to conclude the free trade talks involving 10 other nations in the Asia Pacific region by the end of this year.

Cutler pressed the Japanese government to make "tough decisions" in the negotiations, as "opening up the agriculture market is really sensitive and difficult" for any prime minister.

Cutler also said it was an encouraging sign that "there was a lot of emphasis put on the agricultural reform" as part of Japan's growth strategy, dubbed "the third arrow of Abenomics," although Japan Prime Minister Shinzo Abe faced opposition not only from farmers and the opposition party, but also within the ruling Liberal Democratic Party.

The Abe government has planned to eliminate tariffs on about 95 percent of the nation's trade items in the TPP agreement, including some high sensitive items like leather products, wine, tobacco and beef tongue, said Yorizumi Watanabe, a professor of international political economy at Keio University in Tokyo, at the panel discussion.

That's higher than 88.4 percent, the biggest tariff concession Japan offered in previous free trade agreements, indicating that the Abe government used the TPP trade deal as leverage for domestic reforms, the professor added.

The second challenge was long-standing issues covered in the bilateral parallel negotiations between U.S. and Japan, said the U.S. official. The two countries agreed in April to launch bilateral negotiations on the automotive and insurance sectors and other non-tariff measures, in parallel to the TPP negotiations, as these issues will not be addressed in the TPP agreement.

However, the two sides haven't reached a major breakthrough after three rounds of bilateral parallel negotiations. "We have made some progress, but we still have a lot of great work to do," Cutler said. "We've made it clear to Japan these negotiations should be concluded at the same time with TPP negotiations."

Cutler believed it was "doable" to finish the TPP trade negotiations by the year-end despite these challenges. But according to the optimistic scenario of Jeffrey Schott, senior fellow at the Peterson Institute, the 12 TPP participants will probably conclude the TPP talks in the first half of next year.

Source: Xinhua