Bloomberg News

Japan ‘Cautious’ About Concessions Ahead of Washington TPP Talks

February 07, 2012

Feb. 7 (Bloomberg) -- Japanese Foreign Minister Koichiro Gemba said the government is “cautious” ahead of talks today on joining an Asia-Pacific trade bloc that will include demands to eliminate tariffs on protected goods.

Japanese officials will meet with their American counterparts in Washington to discuss participation in the U.S.- led Trans-Pacific Partnership. Prime Minister Yoshihiko Noda is pushing to join the free trade group over the opposition of some lawmakers concerned that slashing tariffs such as Japan’s 778 percent duty on rice will hurt farmers.

President Barack Obama is seeking to expand the nine-nation talks to include Japan in what would be the biggest U.S. trade deal since the 1994 North American Free Trade Agreement. U.S. automakers oppose Japan’s participation, arguing the country can’t be counted on to lower import barriers.

“We have heard many positive views but there are various demands regarding tariff and non-tariff barriers,” Gemba told reporters today in Tokyo. “We need to be cautious. We have to first examine what the U.S. is requesting and decide on what we can and cannot respond to.”

A dispute emerged almost immediately after Noda met Obama in Honolulu in November at the Asia Pacific Economic Cooperation summit. The U.S. released a statement saying Noda said he was willing to negotiate on all of his country’s goods and services in the TPP talks, which Japan then denied.

“Our basic policy is to include all products in liberalization talks while taking into consideration sensitive items,” Chief Cabinet Secretary Osamu Fujimura said today in Tokyo.

Agriculture Opposition

Noda has said Japan must open its markets to revitalize an economy threatened by a strong currency, falling prices and the impact from last year’s record earthquake and nuclear crisis. Japan’s largest farm lobby submitted a petition in November with almost 11.7 million signatures saying the trade deal would mean the “collapse” of the agriculture industry, which accounts for about one percent of gross domestic product.

Obama administration officials have welcomed Japan’s interest in joining the talks while calling on the Tokyo government to commit to free trade.

“It’s too soon to tell” whether Japan is “up to the task of meeting the high standards that we expect,” Deputy U.S. Trade Representative Demetrios Marantis told Congress in December.

The American Automotive Policy Council, which represents Ford Motor Co., General Motors Co. and Chrysler LLC, supports the TPP while opposing Japan’s participation.

‘Most Closed’

“Japan remains the most closed auto market to imports in the developed world and the automotive sector currently represents 70 percent of the total U.S. bilateral trade deficit with Japan,” the group said in a Jan. 13 statement. “Japan’s trade barriers in the auto sector cannot be addressed easily or quickly, and will needlessly slow down the negotiations.”

Japanese automakers dispute that contention, saying American cars don’t appeal to local consumers.

“Japan has no tariffs and has no restrictions on foreign automakers,” Toshiyuki Shiga, chairman of the Japan Automobile Manufacturers Association, said at a Nov. 15 press conference. “It’s completely open.”

Two-way trade between the U.S. and Japan totaled $181 billion in 2010, more than the $171 billion in U.S. trade with the eight other nations already in the talks, according to the U.S. Commerce Department.

The other countries participating in the TPP are Australia, Chile, Peru, Singapore, Malaysia, New Zealand, Vietnam and Brunei.

--With assistance from Takashi Hirokawa in Tokyo. Editors: John Brinsley, Nicholas Wadhams

To contact the reporter on this story: Sachiko Sakamaki in Tokyo at ssakamaki1@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net


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