US-Japan Farm Trade Divides Persist as TPP Chief Negotiators End Hanoi Meet

10 September 2014

Chief negotiators from 12 Trans-Pacific Partnership (TPP) countries concluded a 10-day meeting in Hanoi, Vietnam, earlier today, in an effort to pare down some of their remaining differences. While progress was reported in some areas of the trade talks, a concurrent set of bilateral meetings in Tokyo between the US and Japan showed that the two sides remain at odds on the key issue of agricultural tariffs.

Issues on the 1-10 September agenda for the TPP group included investment, rules of origin, intellectual property, state-owned enterprises, financial services, and the environment, according to an Australian government summary published ahead of the talks.

US trade negotiator Barbara Weisel, speaking to Bloomberg, said that the week had yielded “important progress,” particularly in the area of state-owned enterprises. However, “we are not done and further work is needed,” she clarified, noting that parties are trying to address country-specific sensitivities without undermining TPP goals.

Advances were also made in sanitary standards involving agriculture, Weisel told the news agency, without going into specifics.

Chief negotiators had last met in the Canadian city of Ottawa in July, touting progress in areas such as labour and sanitary and phytosanitary standards (SPS), without reporting any major breakthroughs in the more controversial areas. (See Bridges Weekly, 17 July 2014)

US-Japan: little progress on farm trade talks

The TPP’s members include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam. However, the spotlight has lately been on the US and Japan as they attempt to hammer out a bilateral deal on agriculture trade within the TPP context, as well as a separate agreement on automobiles. 

The farm trade subject has been particularly difficult, with Tokyo pushing to keep protections on a series of “sacred” agricultural products, such as beef, dairy, pork, rice, and sugar. The US had previously pushed for full tariff elimination on these items, while Japan had asked for more flexibility, given how politically sensitive the issue of farm trade is domestically.

Meetings between American and Japanese negotiators on these subjects were held this week, in an effort to narrow differences in these areas. These were held away from the main TPP negotiating site in Hanoi, in the Japanese capital of Tokyo. Some had hoped that progress here could pave the way for a ministerial-level meeting between the two trading partners later this month.

“We were not able to make as much progress as we had expected,” said Hiroshi Oe, Japan’s deputy chief negotiator for the TPP, afterward in comments reported by Kyodo News. Oe, who was referring specifically to the agriculture discussions, added that “considerable gaps” remain between the two sides.

The slow pace of the US-Japan farm talks has sown impatience among agricultural producers in other TPP members, given that whatever outcome is reached there will likely affect the overall negotiations.

A group made up of the Canadian Pork Council and various US, Australian, Chilean, and Mexican pork producers recently warned that “a broad exemption for Japan will encourage other TPP countries to withhold market access concessions,” among other dangers, potentially unravelling the Pacific Rim trade deal.

“It would set a dangerous precedent,” they added, according to a letter quoted in The Globe and Mail, a Canadian newspaper.

Upcoming meetings?

Dates for the next meetings, along with what level these would be at, had not been publicly announced as Bridges went to press on Wednesday evening. However, some expect that a TPP leaders’ meeting could be held on the sidelines of the Asia-Pacific Economic Cooperation (APEC) leaders’ week, being hosted in November by China. All 12 TPP members are part of the 21-country APEC regional grouping. China is not involved in the Trans-Pacific Partnership talks.

Should a TPP leaders’ meeting be held, a ministerial-level meeting could potentially precede it, as done in years past. (See Bridges Weekly, 10 October 2013) The most recent meeting of TPP ministers was this past May in Singapore, where the countries’ top trade officials pledged to intensify the talks, while not setting out publicly a timeframe for their completion. (See Bridges Weekly, 22 May 2014)

US midterms

Some officials – including New Zealand Prime Minister John Key – have suggested in recent months that any progress on wrapping up a TPP deal might not happen until after the US holds its congressional midterm elections, set for early November.

“I’m of the view Obama won’t go anywhere near this thing prior to the mid-terms,” Key said at a conference in Wellington earlier this month, noting that US President Barack Obama has stressed to him the importance of reaching a strong deal.

Obama had previously said, during a meeting in June with the New Zealand premier, that he hoped TPP members might also have something ready in November, without clarifying at the time whether this would be a draft deal or a finalised agreement. (See Bridges Weekly, 26 June 2014)

No other TPP members have publicly backed that date, however, and some – such as Australia – have openly said that 2015 is far more likely, given the fraught political climate in Washington.

ICTSD reporting; “Japan, U.S. see little progress in talks for TPP farm tariffs,” KYODO NEWS, 10 September 2014; “Canadian pork producers balk at Trans-Pacific Partnership trade deal,” THE GLOBE AND MAIL, 9 September 2014; “Obama urged to boot Canada from trade talks or gain concessions,” THE GLOBE AND MAIL, 3 August 2014; “Top U.S. Trade Negotiator Sees ‘Important Progress’ in TPP Talks,” BLOOMBERG, 10 September 2014; “PM Key sees more TPP traction after US mid-terms,” SCOOP NZ, 8 September 2014.

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