Japan and US Working on Bilateral Agreement Ahead of TPP

Japan and the United States are arranging to hold a ministerial meeting around late February or early March to secure a much-awaited bilateral agreement that is seen as vital for a 12-country Pacific Rim free trade deal, negotiation sources said Monday.

The two countries have yet to bridge their differences over market access for farm products and autos. Japan’s TPP minister Akira Amari and U.S. Trade Representative Michael Froman will meet to settle the most politically sensitive issues if working-level talks starting Monday in Washington make enough progress, the sources said.

Japan and the United States, accounting for some 80 percent of gross domestic product in the so-called Trans-Pacific Partnership framework, also hope to convene a 12-country plenary ministerial gathering in mid-March to conclude the broader talks before Washington enters campaign mode later this year for the 2016 presidential election.

The two countries have struggled to find common ground on how drastically Japan should open up its agricultural market. While the U.S.-led TPP aims for abolition of all tariffs in principle, Tokyo has sought to protect its key agricultural product categories — rice, wheat, beef and pork, dairy and sugar.

In response to persistent calls from the United States for greater market access regarding those agricultural goods, Japan has offered to slash its 38.5 percent tariffs on beef to 9 percent over 15 years, together with a plan to raise tariffs back to 20 percent as a safeguard measure should imports of U.S. beef surge under the TPP.

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