Japan FTA feeds into wider trade talks

Australia's free trade deal with Japan has brokered new ground for negotiators trying to hammer out an even more ambitious agreement with Tokyo.

Andrew Robb (l) and Yoshimasa Hayashi (r)

Australia's FTA with Japan has opened up the possibility of a future, more ambitious agreement. (AAP)

Not everyone shared Australia's enthusiasm when it signed an historic free trade agreement with Japan last month.

The United States, for one, was concerned the deal wasn't ambitious enough and could undermine its own painstaking bargaining process with Japan over a far broader regional trade agreement.

The success of the Trans Pacific Partnership agreement - a giant 12-nation pact covering a quarter of the world's trade - hinges on the US persuading Japan to open up its protected agriculture sector.

The US has been driving a hard bargain but is confident it's on the brink of gaining major concessions from Japan, the third-largest economy in the world and the big fish in the TPP.

Naturally, the US was a little miffed when Australia accepted terms from Tokyo far below what the Obama administration has been demanding in four years of TPP negotiations.

"Because it was a distraction from the main event of TPP and because you settled for a little less than the US thought was ideal," Matthew Goodman, a former White House adviser and Asia-Pacific expert at US think tank CSIS, told AAP.

The US is desperate to clinch the TPP.

It's the economic centrepiece of the administration's rebalance strategy towards Asia and the Pacific, known as the "pivot".

But the talks have been slow. Trade ministers - including Australia's Andrew Robb - will meet in next week Singapore for yet another round of negotiations.

The sticking point is agricultural tariffs, with Japan's influential and protectionist farm lobby opposing greater liberalisation of its key agricultural markets, above all beef.

Australia has experience in this, having gained concessions in beef tariffs and other farm products as part of its groundbreaking deal with Japan.

Mr Goodman said Australia had "broken the taboo" of Japanese protectionism, but the US would be pushing for even bigger tariff cuts than Canberra achieved.

"I think the US is going to keep driving this," he said.

"I think Japan is on the cusp on making some bigger concessions on agriculture, and that would be a very big deal."

There is pressure in Japan to get the deal done, with Prime Minister Shinzo Abe banking on the TPP as a central plank of his economic reforms.

Australia would receive equal treatment if the US wrangled a better deal, because it was granted "most-favoured nation" status under its Japan FTA.


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Source: AAP


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