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World|politics|April 25, 2014 / 10:14 AM
U.S., Japan fail to clinch trade deal

AKIPRESS.COM - obama The U.S. and Japan failed to clinch a last-minute deal on free trade, damping hopes for an early conclusion of a broader trade deal across the Pacific.

Japan's economy minister Akira Amari told reporters Friday morning that the two countries have been unable to reach accord on any of the major contentious issues, including market access for automobiles and agricultural products, the Market Watch reported.

A bilateral accord is a crucial step for moving forward discussions on the Trans-Pacific Partnership, a U.S.-led free trade initiative involving 12 nations. It is also the main economic component of Mr. Obama's foreign policy "pivot" to Asia.

Mr. Amari and U.S. Trade Representative Michael Froman were tasked with resolving all outstanding issues on bilateral free trade while President Barack Obama was in Tokyo. The instruction was given Thursday by Mr. Obama and Japan's Prime Minister Shinzo Abe. An expected meeting Friday between Messrs. Amari and Froman didn't take place, as the representatives decided further talks wouldn't yield any more progress, Mr. Amari said.

In a statement, the two countries said they "have identified a path forward on important bilateral TPP issues" that "will inject fresh momentum into the broader talks." The statement didn't give specifics and cautioned that "there is still much work to be done to conclude TPP."

Mr. Obama left Tokyo Friday morning to continue a four-nation Asia tour, which will take him also to South Korea, Malaysia and the Philippines.

Messrs. Froman and Amari held face-to-face talks over 40 hours in the past three weeks, either in Tokyo or in Washington, aiming to scrape together a broad accord that would demonstrate that the two countries stand together on key economic issues in the face of an assertive China.

But rather than showing the strength of the bilateral alliance, which the two countries call the cornerstone of peace and security in Asia Pacific, the failure to make a breakthrough has revealed a divide between the two allies.

The U.S. had hoped to conclude an agreement on TPP as early as last year. The initiative, widely touted by officials as a model for 21st century trade and investment rules, is aimed at eliminating tariffs among 12 economies that account for around 40% of global economic output and 30% of trade.

It is meant to create an open and predictable environment of doing business in the Asia Pacific region. Representing the two largest economies of TPP, Messrs. Obama and Abe emphasized in a news conference Thursday the importance of an early conclusion of the TPP negotiations.

For Mr. Abe, TPP also provides an opportunity to demonstrate his commitment to opening up the country to greater competition, especially in the long-protected agricultural sector, to help revive the long-moribund Japanese economy.

Japan offered some tariff reductions for sensitive farm products, such as beef and pork, a senior Japanese official said, but the U.S. stuck to the principle of eliminating tariffs on all items without exception, leaving the negotiations in a deadlock.

Mr. Obama has repeatedly pressed Mr. Abe to make tough political decisions necessary to move the TPP talks forward.

"There are always political sensitivities in any kind of trade discussions," Mr. Obama said at the news conference Thursday. "But Mr. Abe has to deal with his politics and I've go to deal with mine."

Mr. Obama noted that Japan's pace of economic growth has stalled in the past two decades, and "if Japan wants to push forward in this new century, then reforms are going to have to take place. TPP is consistent with those reforms."

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