"Breakthrough" Means No Deal

OMAHA (DTN) -- President Barack Obama left Japan on Thursday with no agreement on resolving the Trans-Pacific Partnership talks, but a senior administration official spun the talks as a "breakthrough" that would "inject fresh momentum" for a major trade deal nonetheless.

Comments to press by a senior administration official released by the White House show Japan offered a range on potential new tariffs for products but little more than that. Several agricultural commodities remain classified by Japan as "sanctuary products," including beef, pork, dairy, wheat, rice and sugar.

Agriculture and access for U.S. automakers remain the major sticking points between the U.S. and Japan that have blocked headway on the bigger, 12-country TPP.

The Trans-Pacific Partnership was buried in the fifth paragraph of a joint statement by the Obama administration and Japanese officials. The statement said the two countries were committed to "taking the bold steps necessary" to complete a deal. The countries had "identified a path forward" on the issues, which marked a "key milestone in the TPP negotiations and will inject fresh momentum into the broader talks."

The Wall Street Journal reported that Japanese officials indicated there would be no deal until after the U.S. mid-term elections in November. They also want Congress to give President Obama trade promotion authority that would block Congress from trying to change any final deal, the paper reported.

Japan is the fourth-largest market for U.S. agricultural products, importing $12.1 billion in 2013, but tariffs remain high and some products are blocked altogether. Feed corn, pork, beef and soybeans are the largest agricultural exports to Japan.

The unnamed senior administration official who took questions from reporters said the talks revolved around a range of tariffs for certain products and the possible timeframes for lowering those tariffs. The official noted that some agricultural products have been effectively shut out of Japan for 60 years.

The official said the Japanese detailed some possible changes in current tariffs, though the specifics weren't explained. "I think parameter is a good way of thinking about it. There are these parameters and there are tradeoffs among parameters. The deeper the cut in the tariff, the longer time it may take to get there. And so we have a sense of what the packages might be and what the pathway forward is to us resolving this."

The Japanese trade minister said there were still gaps that must be negotiated, but they have been narrowed to what the official said translated in such a way that "we really do have a breakthrough in our bilateral negotiations."

"The way I would describe it is we have a breakthrough. We have a breakthrough; we have a pathway toward the resolution of these issues."

There is no timeline for resolving the tariff gaps. However, all of the TPP countries will be getting together in mid-May for another round of talks.

"I'd say that these are sensitive sectors for them, and what we do in TPP in these sectors needs to take into account their sensitivities, but at the same time, needs to take into account the requirements of ambition for TPP as a whole and the need to create new, meaningful market access," the administration official said.

Chris Clayton can be reached at chris.clayton@dtn.com

Follow Chris Clayton on Twitter @ChrisClaytonDTN

(AG/SK)

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