No Progress For US, Japan In TPP Crunch Talks

There was a complete failure to make any progress regarding the outstanding market access issues between Japan and the United States on the agriculture and automobile sectors, during two days of Trans-Pacific Partnership (TPP) meetings, from September 23-24, between the US Trade Representative (USTR) Michael Froman and Japan's Minister for Economic and Fiscal Policy Akira Amari.

A statement from the Office of the USTR pointed that, "while there were constructive working level discussions previously, we were unable to make further progress on the key outstanding issues. The US continues to demonstrate a commitment to the level of ambition that all TPP countries agreed to attain when they entered negotiations."

With regard to agriculture, although the elimination of tariffs is meant to be a key feature of the TPP agreement, Japan has continued to insist that it should keep import duties on its ultra-sensitive agricultural products – rice, wheat, beef and pork, dairy products, and sugar and starch – in large part due to pressure from its domestic farming lobby.

There has also been resistance from Japan with regard to the non-tariff barriers (NTBs) maintained for its automotive industry. Those NTBs include issues relating to standards and certification, the lack of sufficient opportunities for stakeholder input in the development of standards and regulations, barriers that hinder the development of distribution and service networks, and the lack of equivalent opportunities for US models to benefit from temporary fiscal incentive programs.

The USTR's Office was merely able to conclude that the US and Japan "will consider next steps following consultations in both capitals." There is currently no information on when further meetings may be held, and the two issues therefore remain a major roadblock to the conclusion of a TPP agreement.

It is now thought doubtful that overall TPP talks can be concluded by the end of 2014, as had been hoped by the US Administration. However, if that target is to be maintained, consideration may have to be given to calls, for example from the Chairman of the House of Representatives Ways and Means Subcommittee on Trade, Devin Nunes (R – California) last month, to complete the negotiations without Japan, and allow it to rejoin later if and when it can commit to full tariff elimination.

Source: Tax News