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U.S., Japan TPP Talks Collapse; Trade Ministers Cancel Meeting Out of Frustration

Bilateral trade talks between the U.S. and Japan, intended to rescue Trans-Pacific Partnership (TPP) negotiations hamstrung by disagreement between the two nations, left unresolved the major points of contention.

Akira Amari, Japan’s economy minister, met with U.S. Trade Representative Michael Froman to hammer out resolutions that would put the TPP talks back on the path to an eventual agreement. However, today, April 25, Amari told reporters that no progress was made, including on the stubborn issue of Japan’s agricultural protectionism. In fact, a meeting between the two negotiators scheduled for this afternoon was cancelled as a consequence of the expectation that the impasse is currently irresolvable.

U.S. President Obama, in Tokyo to meet with Japanese Prime Minister Shinzo Abe, said, “There are always political sensitivities in any kind of trade discussions. But Mr. Abe has to deal with his politics and I’ve go to deal with mine.”

Stymied by halted talks, the U.S. and Japan have committed themselves to a flurry of meetings to find any common ground that could inspire future compromise. In the past three weeks alone, Froman and Amari have been locked in more than forty hours of intense face-to-face discussion. Also, on March 27, Acting Deputy United States Trade Representative Wendy Cutler met with Japanese Ambassador Hiroshi Oe in Washington, D.C. Last January, Froman met with Japanese Minister Takeo Mori in Switzerland with the purpose of designing a roadmap for remaining discussions. Amari despondently reported that intense negotiations couldn’t close the “fairly big” divide between the squabbling countries. His prognosis was not optimistic. Speaking at a press conference, he said, “We have yet to be able to break the stalemate. We cannot make headway on key items. It seems difficult to make progress on the central part (of the negotiations).”

The persistent controversy has been the distance between the U.S. and Japan over the thorny issue of agricultural reform. The U.S. has insisted that Japan move toward a tariff-free regime under the TPP, but Japan has resisted fully liberalizing its agricultural sector, nominating five product areas as “sacred,” which means effectively taken off the table for negotiation. Problematically, beef and rice are among the areas the U.S. has been equally insistent are, at the very least, open to the possibility of future revision.

Last week, there was a glimmer of hope when Froman and Amari were at least able to clarify the terms of that distance between them. Japan agreed to slice its tariffs in half, reducing the duty on Australian beef to less than 20 percent from 38.5% over the next eighteen years. Japan, though, still maintains its tariff on U.S. beef at 38.5%.

Many trade experts believe the ultimate settlement of the TPP squarely hinges upon the US. and Japan affecting a rapprochement on a series of contentious issues. Smaller nations have been exchanging concessions regarding intellectual property, regulatory reform, foreign investment and infrastructural improvements for additional access to both American and Japanese markets. However, that greater access is widely understood as contingent upon the prior opening of markets between the U.S. and Japan. And now a series of smaller arrangements have been imperiled by the stalled talks between the two industrial leaders. Froman then said, “We’ve made some progress over the last two days, but there are still considerable differences in our positions on key issues.”

Despite the fact that no compromise was reached in the latest round of discussions, both sides jointly reported that they “have identified a path forward on important bilateral TPP issues” and that this discovery “will inject fresh momentum into broader talks.” However, neither side specified the nature of this path.

 

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