US and Japan Talk Farm Tariffs Ahead of TPP

Japan and the United States resumed bilateral talks on Tuesday over Tokyo’s proposed exceptions to tariff elimination for key farm products under a Pacific free trade initiative, aiming to set the stage for Tokyo and Washington to secure a two-way agreement within the month.

The two-day working-level talks in Tokyo come after the Japanese minister in charge of Trans-Pacific Partnership negotiations said it is desirable for Tokyo and Washington to secure a bilateral deal by the end of September.

A deal between the two largest economies involved in the TPP negotiations is seen as vital to advancing the broader talks involving 12 nations. How much progress Tokyo and Washington make this month could determine whether the dozen nations involved in the negotiations can seal a broad deal by year-end as envisioned by U.S. President Barack Obama, trade observers said.

Hiroshi Oe, Japan’s deputy chief negotiator for the TPP, and Wendy Cutler, acting deputy U.S. trade representative, are heading the working-level negotiating teams. They are planning to meet again within this month.

Obama has placed the TPP, which would encompass 40 percent of global gross domestic product and a third of world trade, at the core of his “rebalance” to Asia, while for Japanese Prime Minister Shinzo Abe, it is a pillar of his growth strategy to shore up the country’s economy.

Though both Japan and the United States share the goal of striking a deal at an early date, they have struggled to settle huge disagreements over Japan’s calls for exempting five farm product categories — rice, wheat, beef and pork, sugar, and dairy — from tariff elimination, causing the overall negotiations to stall.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza