Japan urges compromise in prolonged negotiations with US to spur trans-Pacific trade pact

WASHINGTON – The U.S. and Japan should reach a compromise in trade negotiations to help conclude a trans-Pacific free trade pact by year’s end, a senior Japanese official said Tuesday.

Hiroyuki Ishige, who is chairman of the Japan External Trade Organization, told a Washington think-tank that political leaders of both sides need to make bold decisions and recognize the strategic importance of finalizing the Trans-Pacific Partnership, or TPP.

His comments come as the U.S. continues negotiations with Japan in Washington this week on opening up its auto market. Japan is also under pressure to open up its heavily protected agricultural sector.

Ishige said the top trade officials have already spent 60 hours in talks and can find common ground.

“Each knows his counterpart’s red line. It’s time for them to show the political urge for compromise,” Ishige told the Center for Strategic and International Studies. “There is no perfect TPP.”

Wendy Cutler, acting deputy U.S. trade representative, said there had been progress in the auto talks, “but we still have a lot of work to do.”

The U.S. and Japan are the largest players in the 12-nation TPP and resolving their differences is a major hurdle in finalizing the pact, whose members account for 40 per cent of global economic output. The chief negotiators of the 12 nations are due to hold another round of negotiations next month.

The TPP is aimed at cutting tariffs and setting trade rules, and is central to the Obama administration’s attempt to boost American exports to Asia and re-orientate U.S. foreign policy toward a region of growing economic importance. The pact is seen as a precursor to a future wide free-trade arrangement for the entire Pacific Rim region.

The pact was slated for completion at the end of 2013. It is still opposed by many of Obama’s fellow Democrats.

Cutler steered clear of predictions on when TPP could be completed but pushed back suggestions that would happen without Japan, if they fail to resolve their difference over market access in the auto and agricultural sectors.

“We really are focused on concluding TPP with Japan and that’s why we are spending so much time with them,” she said.

Ishige said the U.S. and Japan should play a leadership role in the world economy, but he also welcomed the possible future participation of China in TPP, saying it would be conducive to market-based reforms there.

He also acknowledged that a separate regional trade pact being championed by China — the Regional Comprehensive Economic Partnership — was also a “powerful driver” for economic integration in the Asia-Pacific.

The other countries negotiating the TPP are Australia — whose prime minister meets Obama in Washington Thursday — Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.