Japan moves closer to trade pact despite concerns

WASHINGTON (AFP) - Japan has made clear to the United States that it is seriously considering talks on a sweeping Pacific trade pact, but Tokyo's entry already faces fierce opposition in both countries.

Japan's newly elected conservative prime minister, Shinzo Abe, sounded an increasingly upbeat tone on the 11-nation Trans-Pacific Partnership during a visit on Friday to Washington despite tepid support from much of his party.

President Barack Obama has cast the Trans-Pacific Partnership as a centrepiece of renewed US engagement in Asia, saying that the emerging pact could boost growth and set rules to govern the dynamic but unwieldy region.

The participation of both Japan and the United States, the world's two largest developed economies, would make the pact cover nearly 40 per cent of the world economy and potentially offer a model for an elusive global trade accord.

But Japan's agriculture lobby had fought the previous government over its desire to enter talks on the Trans-Pacific Partnership, fearing that unprecedented foreign competition would devastate a deeply rooted rice culture.

Mr Abe's Liberal Democratic Party, whose support bases include both farmers and big business, had said during the election campaign that Japan would only enter negotiations if certain sectors were declared off the table from the start.

In a carefully worded statement after Mr Abe's talks with Mr Obama, the two countries said that "all goods would be subject to negotiation" if Japan decided to enter talks on the Trans-Pacific Partnership.

But the statement acknowledged "sensitivities" on both sides, particularly in agricultural and manufactured goods, and said that no country would be "required to make a prior commitment to unilaterally eliminate all tariffs."

Mr Abe, addressing reporters after his talks with Mr Obama, suggested that Japan could still achieve his party's campaign promise to spare sectors during the course of negotiations.

Mr John Neuffer, a former US trade official who is senior vice-president for global policy at the Information Technology Industry Council, which advocates on behalf of the tech sector, called the Japan-US statement "a beautiful piece of political finessing."

"I think this summit creates a pathway forward for Abe to finally get Japan into the TPP," Neuffer said. "Both sides had to give a little if there was any hope of making it happen."

But Representative Sandy Levin, the top lawmaker from Mr Obama's Democratic Party on the critical House Ways and Means Committee, voiced concern. He said that Japan was closed not only to US agriculture but also cars and insurance.

"There must be a clear, concrete understanding that before Japan would join the TPP negotiations, that those negotiations would result in a real change in Japan's policies and practices," Mr Levin said in a statement.

"An agreement that does not result in two-way trade is not an agreement that I or this Congress will support," he said.

Civil society groups have voiced concern about the lack of details from the Trans-Pacific Partnership talks, which involve Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.

Activists fear that the deal would allow companies to skirt domestic laws protecting consumers by going to foreign courts. In Australia and New Zealand, campaigners have expressed concerns that US pharmaceutical giants would push up the prices of medicine.

But in Japan, advocates say that the Trans-Pacific Partnership would boost a long-stagnant economy by giving it an edge over a rising China and leveling the playing field with South Korea, which secured a hard-fought free trade deal with Washington and which produces many of the same products as Japan.

Mr Neuffer argued that the United States stood to gain more than Japan from Tokyo's participation as Japan had the more closed market.