U.S. Trade Representative Addresses Trade Conflicts With Japan Ahead Of TPP Brunei Talks

Via The Wall Street Journal

By Toko Sekiguchi

TOKYO--Top trade negotiators for Japan and the U.S. met on Monday to discuss the Trans-Pacific partnership free trade talks, hoping to work out long-running points of contention ahead of a 12-nation meeting in Brunei later in the week.

Framing the TPP talks as an integral part of President Barack Obama's Asia Pacific rebalancing strategy, U.S. Trade Representative Michael Froman described the U.S. as wanting to build "a stable, secure, prosperous and peaceful region, in which free open transparent market democracies can flourish." He added that Mr. Obama has placed top priority on concluding the TPP negotiations before the year's end.

"We agreed to accelerate our cooperation for a speedy settlement of the TPP, along with our parallel bilateral talks in 2013," Akira Amari, the minister in charge of TPP free trade talks told reporters after meeting with his counterpart earlier in the day. The two nations are concurrently discussing trade issues alongside the broader TPP framework.

Mr. Froman's stopover in Tokyo was seen as an attempt by the two nations to be in lock-step over their commitment to concluding the trade talks without being weighed down by strong opposition from influential Japanese lobby groups to the removal of tariffs and regulations on goods seen as being in the national interest, such as rice and other agricultural products.

Japan's Central Union of Agricultural Cooperatives adopted a declaration on Aug. 8. saying it has "grave problems" with the TPP, as it could jeopardize food safety and universal healthcare services, and undermine the nation's sovereignty. "It's extremely regrettable that the government has entered the negotiations without clarifying such concerns," the statement said.

The Japanese government, led by the Liberal Democratic Party, has vowed to protect tariffs on farm products including rice, beef, pork, dairy, wheat and sugar. However, Mr. Froman maintained that while sensitivities will be "dealt with in the negotiations," the U.S.'s goal is for "a high-standard, ambitious, comprehensive agreement that includes the elimination of tariffs."

The meeting between the two biggest economies in the TPP framework comes as data show growing trade ties between the U.S. and Japan. Data released Monday showed that Japanese exports to the U.S. rose 18.4% on year in July amid political tensions with China and economic stagnation in Europe.

There are also non-tariff barriers that the U.S. is demanding Japan lift in its parallel bilateral negotiations-- mainly automobile industry standards and insurance product access.

Noting that while the two countries have come a long way since the trade wars of 1980s, Mr. Froman said "Barriers to access to Japan's automotive and insurance markets, and non-tariff measures and other sectoral and cross-cutting areas hold back growth and innovation, undermine competitiveness, and hurt workers, businesses and consumers in both our countries."

"The foreign share of the Japanese market is about 6%, the foreign share of the U.S. market is closer to 40%. I don't think there's any question that the U.S. market is quite open to imports," Mr. Froman said.

In the first round of Japan-U.S. talks earlier in the month, the U.S. criticized the recent move by Japan Post Holdings Co. to allow American Family Life Assurance Co. to sell insurance at Japan's post offices as falling short of opening the insurance market to private companies.

Ainsley Shea