Japan, US set to hold cabinet-level trade talks before summit

USTR Froman to visit Tokyo for ministerial talks; bilateral trade deal key to broad Pacific trade pact; progress towards granting Obama ‘fast track’ trade authority Reuters/Tokyo/WashingtonJapan and the US look set to hold cabinet-level trade talks in coming days as the allies race to seal a bilateral trade deal, seen as crucial for a broader trans-Pacific free trade pact, ahead of a summit this month. Economy Minister Akira Amari was to hold a news conference later last night, the government said after Kyodo News reported that US Trade Representative Michael Froman will visit Tokyo to meet Amari on talks over the agricultural and auto sectors. A US-Japan deal is considered vital to the success of a long-delayed Trans-Pacific Partnership pact, as the two economies, the world’s biggest and third-biggest, account for about 80% of the economic output of the 12-member TPP. Japanese media said the ministerial talks could begin as soon tomorrow, suggesting progress at the senior working level in bilateral talks in Tokyo that ran through yesterday. “There are still issues to be solved,” Agriculture Minister Yoshimasa Hayashi said yesterday morning. “We will do our utmost so that a parliament resolution (to protect five agricultural products) can be seen to be kept.” Tokyo has said a bilateral deal would require that the US Congress give President Barack Obama “fast track” authority to negotiate TPP, a pact that is central to his strategic shift toward Asia. On Thursday, senior US lawmakers agreed on the wording of a bill that would give them the opportunity for an up-or-down vote but not to alter a TPP agreement. Still, passage of the fast-track bill remains far from assured. The agreement, over six months in the making, sets the stage for a tough legislative battle over the rules for Obama’s proposed Trans-Pacific Partnership (TPP). The pact would connect a dozen economies by cutting trade barriers and harmonising standards covering two-fifths of the world economy and a third of global trade. The bill gives lawmakers the right to set negotiating objectives, but would restrict them to a yes-or-no vote on trade deals such as the TPP, a potential legacy-defining achievement for President Obama. The Obama administration announced in late 2009 that it was entering TPP negotiations with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The US Trade Representative calls the negotiation the “cornerstone” of Obama’s Asia-Pacific economic policy. It also is important to US manufacturers and farmers eager to expand already significant sales to the region by winning lower tariffs and other breaks. US labour unions that are active supporters of Democratic politicians fear the deal will favour big US Corps at the expense of American jobs and tougher foreign safety and environmental standards. While trade associations and companies such as Intel Corp, Emerson Electric Co and Microsoft Corp welcomed the move, unions immediately announced a new advertising campaign to pressure lawmakers. Similar arguments raged in the run-up to the 1993 congressional approval of the North American Free Trade Agreement between the US, Canada and Mexico. Twenty-two years later there is still a debate over that deal, which badly split the Democratic Party and was passed in the House of Representatives by a narrow 234-200 vote. The bill also faces opposition from some conservative Republicans opposed to delegating power to the White House. The Obama administration has faced pressure to make progress on the TPA bill ahead of a meeting between Obama and Japanese Prime Minister Shinzo Abe on April 28 in Washington. Japanese and US officials met this week in Tokyo in a bid to strike a two-way deal giving momentum to the pact. Japanese officials have said success depends on whether the US Congress approves fast-track measures to ease passage of trade deals, or trade promotion authority (TPA). Japan and other TPP countries have said fast-track authority would give trading partners certainty that agreements will not be picked apart. “This is a smart, bipartisan compromise that will help move America forward,” Republican Senate Finance Committee chairman Orrin Hatch said after leaders of Congress’s tax-writing committees reached agreement on the legislation, which will be introduced in the Senate and House of Representatives. TPP must pass Congress this year to avoid being bogged down in the run-up to the 2016 US elections where it could put Hillary Clinton, who is seeking the Democratic nomination for president, in a difficult spot. As a former member of the Obama administration, she needs to walk a tightrope between supporting her former boss and warning of the need for tougher trade deals. Her husband, former President Bill Clinton, oversaw passage of the Nafta deal that many unions loathe. The deal between Hatch and the panel’s top Democrat, Ron Wyden, to move Trade Promotion Authority ahead in tandem with a bill to extend support for workers hurt by trade is no guarantee the legislation will pass Congress. Opponents are lobbying hard to defeat it and many Democrats are still undecided.