TOKYO -- Japan is moving cross-Pacific trade talks with Australia, New Zealand and other partner nations to the front burner as it attempts to thaw an impasse with the U.S. over tariffs.
Japan reckons it needs to make friends at the negotiating table for the Trans-Pacific Partnership -- and fast. But this approach could prove as unsuccessful as its early bet on a quick agreement with the U.S.
On Monday, Koya Nishikawa, head of the ruling Liberal Democratic Party's TPP study group, strode into the Australian Embassy, where he was met by Ambassador Bruce Miller. The two discussed how to go about finalizing a bilateral economic partnership agreement this spring. Such a deal has been in the works since Shinzo Abe's first run as prime minister in 2006-07.
Japan is now leaning toward cutting its 38.5% tariff on Australian beef, a bone of contention between the two countries. Should that happen, one of Australia's biggest exports would gain a price advantage over U.S. beef in Japanese supermarkets and restaurants. Miller told Nishikawa that Australia was ready to send Trade Minister Andrew Robb to Japan this month to hammer out an agreement.
For most of its participation in the TPP process, Japan had focused entirely on reaching a broad agreement with the U.S. on trade liberalization. Officials in Abe's government assumed that once this was accomplished, negotiations with the other countries would fall into place.
But U.S. Trade Representative Michael Froman has insisted that Japan must end all of its import duties. On the sidelines of a ministerial conference last month in Singapore, Akira Amari, Japan's economic policy minister, tried to persuade Froman to agree to some exceptions. But the two sides remained divided.
U.S. President Barack Obama is slated to visit Japan next month. Should he press the issue in his meeting with Abe, Japanese officials worry that Japan would have no choice but to concede some tariffs on politically sensitive farm goods. To be in a better position to protect its five priority areas -- rice, wheat, beef and pork, dairy products and sugar -- Tokyo aims to wrap up negotiations with Australia and other TPP participants by the time Obama touches down.
Japan will send negotiators to Mexico, New Zealand, Singapore and other countries this month. All of them are likely to make uncomfortable demands for tariff elimination -- Mexico on pork, New Zealand on dairy products, and Singapore on chocolate. Japan will not agree to drop these tariffs but will consider lowering them.
The Abe government, however, has little time to sell this deal before Obama's visit. Moreover, Japanese farmers will fight even tariff reductions. Some LDP lawmakers fear this approach could run afoul of a parliamentary committee resolution promising to defend the five priority areas. Officials at the agriculture ministry are also wary. Support for exposing the farm sector to greater foreign competition is far from rock solid within Abe's party or government.