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 Talks on the Trans-Pacific Partnership, a 12-nation bloc which
would span 40 percent of the world economy and extend from Asia to
Latin America, have been deadlocked as the United States and Japan
stared off over farm and auto exports.
Although Obama and Abe did not announce an end to the stalemate at
Thursday's meeting in Tokyo, a joint statement issued shortly before
Obama left on Friday said the two countries identified a "path
forward" on key issues, a contrast to the "gaps" highlighted after
previous talks.
Briefing reporters on the president's plane from Japan, a senior
U.S. official said negotiators set the parameters for agreement on
Japan's sensitive sugar, beef, pork, rice, dairy and wheat sectors,
involving which trade barriers to eliminate, which to reduce, and
over which time period.
"There are these parameters, and there are trade-offs among
parameters. The deeper the cut in the tariff, the longer time it may
take to get there," he said.
A U.S. congressional aide briefed on the negotiations said there was
momentum heading into TPP negotiations in Vietnam in May, where
concrete trade-offs could be made.
"That's the first time we have seen the Japanese moving in our
direction," said the aide, who declined to be identified because of
the sensitive nature of the discussions.
"We were on a path of gridlock and now there seems to be a path
forward, if you're a trade negotiator you've got to be excited about
that."
Trade experts said the administration comments pointed to a long
phase-out period for tariffs Japan was prepared to move on such as
beef, which it agreed to cut in a deal with Australia weeks earlier,
while allowing continued protection for sectors such as rice.
"That's something that the United States can do, because U.S.
negotiators are not under extreme political pressure to get a
comprehensive reform on rice," said Peterson Institute for
International Economics trade analyst Jeffrey Schott.
Officials from other TPP countries noted U.S. recognition of the
role market access played in persuading other TPP partners to sign
up to common rules on issues such as intellectual property,
important to the United States and Japan.
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For big agricultural exporters such as Canada, New Zealand and
Australia, access to Japan's markets might offset doubts about the
intellectual property rules.
"Once it's clear that there is going to be a U.S.-Japan deal that is
perceived to be a good deal for everybody ... there will be
decisions made," the aide said. "There will be trade-offs,
trade-offs not just in the market access talks but trade-offs within
the rules package as well, across the entire agreement."
The joint statement also called on other trading partners to take
steps needed to conclude the agreement, making clear the United
States and Japan do not want to bear the burden alone.
"It's going to take all 12 countries, not two, in order for TPP to
cross the finish line," said Alston & Bird policy adviser Eric
Shimp, a former U.S. Trade Representative negotiator.
But Japan would likely have to go into more detail about its
concessions to prompt Canada to open up its dairy and poultry
markets.
"It's hard for me to see Canada offering more market access, or
showing its hand, before Japan does. The sequence is fairly clear,"
said McDermott Will & Emery partner Jay Eizenstat, also a former
USTR negotiator.
(Reporting by Krista Hughes; editing by Mohammad Zargham)
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