Differences between Japan and the US – the two biggest economies in the TPP talks – on agricultural and automobile trade have been cited as the largest stumbling blocks for clinching an overall 12-country deal.

 

The two sides have therefore held a series of bilateral meetings on both topics over the past several months in an effort to reach a mutually acceptable agreement.

 

Regarding automobiles, Washington is pressing Tokyo to open its market to more imports, mainly through the removal of non-tariff barriers. The two sides had agreed last year that bilateral discussions on the subject – a long-standing sticking point between them – would be held in parallel to the TPP talks, as one of Japan’s conditions for entry into the overall negotiations. (See Bridges Weekly, 18 April 2013)

 

On the agricultural front, Washington had until recently been pushing for total tariff elimination, which Japan has said it cannot agree to given the domestic sensitivities surrounding farm trade. (See Bridges Weekly, 22 May 2014). 

 

Following an April summit between US President Barack Obama and Japanese Prime Minister Shinzo Abe, it appeared that Washington would settle for tariff elimination “to the maximum extent possible,” giving Tokyo some room to maintain limited protections for particularly sensitive agricultural goods like beef, sugar, and dairy.

 

This prospect has rankled the highly influential US farm lobby, which has repeatedly threatened to withhold its support for the deal if tariffs are not eliminated as previously hoped.

 

“We are not going to allow a bad deal with Japan to go forward,” said Nick Giordano, vice president of the National Pork Producers Council, which represents American pig farmers. “It’s going to invite other countries in the TPP to scale back what they are willing to give to the United States.”

 

American dairy farmers have similarly complained, with members of the National Milk Producers Federation and the US Dairy Export Council saying in a letter to the Office of the US Trade Representative (USTR) and the US Department of Agriculture that it would be “unacceptable” for Japan not to grant full access to this sector.

 

US trade officials have said that they are working with Japan to achieve the maximum possible access for American farm exports.

 

“I’m confident that TPP will cover the full range of Japanese agricultural products,” US Trade Representative Michael Froman told the Reuters news agency this week.

 

 

This week’s two-day talks were the first since last month’s ministerial-level meeting in Singapore, where the group pledged to ramp up their negotiating efforts in order to soon clinch a deal.

 

To that end, chief negotiators are reportedly gathering the week of 3 July in Canada, in a meeting that has been termed by some officials as crucial for achieving a near-term result.

 

Even so, whether an agreement will indeed be possible this year remains in question, with Australian Trade Minister Andrew Robb recently suggesting that the talks could drag on into late 2015.

 

“It’s a very complicated thing and I think we have probably negotiated 80 percent,” Robb told AAP last week, noting that the bulk of the remaining work revolves around market access.