OTTAWA -- Trade negotiators from 12 countries were to wrap up the latest round of talks on the proposed Trans-Pacific Partnership trade agreement here on Saturday after making some progress.
But the 12 Pacific-rim countries, which include the U.S. and Japan, still have many hurdles to clear if they are to reach an agreement by the end of the year.
Koji Tsuruoka, Japan's top TPP negotiator, described the latest round of negotiations in Ottawa as "an important milestone toward concluding the negotiations by the end of this year." The 12 countries involved in the talks effectively reached agreements on 12 of the 21 areas under negotiation, including labor and quarantine.
But negotiations on four areas -- import tariffs, intellectual property, the environment and reform of state-owned enterprises -- have been shelved. These four areas are the biggest sticking points for reaching a TPP agreement.
The 12 countries aimed to narrow their sharp differences as much as possible through working-level talks and achieve political settlements at ministerial-level talks. But a Japanese negotiator remarked that, "Conditions are not yet ripe for holding a ministerial meeting," shortly before the end of the Ottawa talks.
In Ottawa, Japan held bilateral talks on import tariffs with all countries involved in the TPP negotiations, with the exception of import tariffs in the agricultural sector with the U.S.
Japan and the U.S. are to hold a fresh round of bilateral discussions about import tariffs on farm products in Washington on July 14-15. But an early agreement is unlikely. The future of Japan-U.S. talks will have a significant impact on Japan's import tariff negotiations with other countries. The two nations are by far the largest economies among the 12 involved in the negotiations.
An early agreement is also unlikely in the three other difficult areas -- intellectual property, the environment and reform of state-owned enterprises. These discussions have pitted developed and developing countries against each other. At issue in the area of intellectual property is the data protection period for newly developed drugs. In Ottawa, there was no session to discuss the drug issue or the environment.
Japan wants to protect its domestic farm industry as much as possible when it comes to import tariff talks with the U.S. and other countries. It is also becoming increasingly difficult for the U.S. to make a political decision in the TPP negotiations ahead of mid-term Congressional elections in November. Developing countries involved in the TPP negotiations are also hesitant about making any early reforms.
The 12 countries will hold more working-level talks, but they face a bumpy road ahead in their quest to clinch a deal that will end negotiations by the end of this year.