US suggests trade pact without Japan

YOSHIHISA MIZUKAMI AND MIYUKI YOSHIOKA
Last updated 13:46 25/02/2014

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The United States has suggested to countries participating in Trans-Pacific Partnership free trade negotiations that they should exclude Japan and reach an 11-nation agreement first, sources told The Yomiuri Shimbun.

The suggestion is thought to be a US negotiating tactic to force Japan to abolish tariffs on farm products, according to the sources. Tokyo will keep urging the United States to relax its position regarding Japan in the ministerial TPP talks, which are set to end on Tuesday.

The sources said US Trade Representative Michael Froman warned Japanese ministers during talks in Switzerland in late January that the United States could move on and reach a TPP agreement with other countries without Japan if Tokyo does not make concessions in talks on farm products.

The US government is also said to have suggested excluding Japan to the other participating countries, worrying Japanese negotiators that their nation might be forced to make unilateral concessions during the ministerial talks, which started on Saturday.

For instance, they were afraid that if Washington made concessions in disputed fields with emerging economies and those countries accepted the removal of tariffs on a higher percentage of items, that might be too much for Japan to accept.

But the United States and emerging economies have yet to make concessions in negotiations on how to set rules to eliminate regulations on foreign investment as well as on tariffs. As a result, Japanese officials are becoming increasingly confident that Japan would not be the only country left out of an agreement.

Since the Japanese market, the second-largest in size after that of the United States, is attractive to countries participating in the negotiations, some of them are expressing their understanding of the Japanese arguments, the sources said.

Meanwhile, some countries are frustrated by the pressure imposed on them by Washington to make significant concessions to USdemands, resembling the conflict escalating between Tokyo and Washington due to the US insistence on abolishing all tariffs.

When Japan joined the TPP talks, Tokyo planned to maintain a co-operative stance with the United States, based on which Japan intended to protect its "sanctuaries" such as farm products with tariffs, while mediating negotiations on disputed fields between the United States and emerging countries, the sources said.

- Washington Post/Bloomberg

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