Japan offers 75% tariff elimination in 1st year of TPP accord

Kyodo News International | September 23, 2013

Japan offers 75% tariff elimination in 1st year of TPP accord

Japan formally offered 75 percent of its goods for tariff liberalization in the first year in negotiations for the Trans-Pacific Partnership free trade pact on Saturday, a source close to the negotiations said.

Japan made its offer as the TPP chief negotiators, meeting in Washington, agreed to set Oct. 17 as the date for all 12 countries to exchange offers on all goods with the aim of concluding a deal by the end of this year.

Other TPP countries also formally made their offers, with different countries offering different levels, on Saturday.

Japan’s tariffs on the remaining 25 percent of goods are expected to be removed within a period of not more than 10 years, based on a prevailing view among the TPP members that the tariffs for goods not offered for elimination in the first year should be eliminated within this time frame, which they call the "phase-out" period, the source said.

Some countries have requested a period of 14 years or even 17 years, but this is expected to be fiercely resisted by other TPP members, according to the source.

TPP is a free trade agreement that requires all goods to be included for tariff elimination. The negotiations began in 2010, with Japan joining only in July this year.

The TPP countries have maintained their plan to conclude a deal by the end of this year. A summit of TPP leaders on Oct. 8 in Bali, Indonesia, and a ministerial meeting that precedes it, will be a critical occasion for the TPP countries to make decisions on politically sensitive issues that have hindered their negotiations so far, the source said.

The chief negotiators’ meeting has prepared a draft statement to be issued by the TPP leaders at the end of their summit next month, which will be held on the sideline of the annual summit meeting of Asia-Pacific Economic Cooperation forum in Bali. Basically the leaders will say in their statement in October that they have agreed on most of the chapters but that some chapters need further work, the source said.

The chief negotiators agreed at their meeting in Washington to set Oct. 17, after the summit, as the deadline for presenting offers for 100 percent of goods for tariff liberalization to each other, the source said. It was the first time they have set such a date.

According to a previous schedule of milestones obtained by Kyodo News earlier this year, it was only slated for sometime in October with no specific date.

Soon after that date, the TPP countries are expected to resume their negotiations so as to hammer out a deal by the end of this year.

Some chapters such as market access, intellectual property rights and state-owned enterprises are facing obstacles in negotiations and will be difficult to conclude before Oct. 17, the source said. Nevertheless, negotiators still aimed to resolve the issues before the end of this year.

On Saturday, Koji Tsuruoka, Japan’s top TPP negotiator, told a press conference after the four-day meeting of TPP chief negotiators in Washington that they had succeeded in laying the groundwork before upgrading negotiations to the political level.

"Our goal is to realize an economic partnership that is bigger than World Trade Organization (frameworks) and free trade agreements," he said.

Meanwhile, the Office of the U.S. Trade Representative said in a statement on Saturday that ministers from the 12 countries will meet in Bali, Indonesia, in early October to "discuss pathways forward on remaining issues and plans for concluding the negotiation."

"Progress toward conclusion was made" on many issues in the chief-negotiator talks in chapters including customs, telecommunications, sanitary and phytosanitary issues, technical barriers to trade, cross border services and labor, the USTR said.

Besides Japan and the United States, the TPP talks involve Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

The Japanese government faces strong domestic pressure to protect its agricultural sector on key farm products such as rice.

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source: Kyodo