US not ready for Japan free trade talks: USTR
Reuters | February 22, 2007
U.S. not ready for Japan free trade talks: USTR
By Doug Palmer
WASHINGTON (Reuters) — A top U.S. trade official on Thursday quashed business community hopes for the United States to begin talks on a free trade agreement with Japan after it finishes negotiations on a proposed pact with South Korea.
"We’re not ready for an FTA (free trade agreement) with Japan right now," Assistant U.S. Trade Representative Wendy Cutler said during a discussion at the Carnegie Endowment for International Peace in Washington. "I’m not saying it’s impossible. I just don’t see it happening in the short term."
The U.S. Business Roundtable and Nippon Keidanren, Japan’s largest business group, last month called for the world’s two largest economic to begin laying the groundwork for negotiation on a free trade agreement "as soon as possible."
That followed a similar recommendation from the U.S.-Japan Business Council last year.
However, Cutler said there were at least five major challenges that prevented the two countries from beginning negotiations any time soon.
Those include Japan’s unwillingness to substantially reform its farm sector, its significant non-tariff barriers that favor domestic companies over foreign firms and strong resistance from many Japanese bureaucrats to the type of liberalization that would be required under a free trade pact, Cutler said.
Washington would also face pressure in the talks to make politically difficult reforms to its anti-dumping legislation and to eliminate the Jones Act, which restricts shipping between U.S. ports to U.S.-flagged vessels, Cutler said.
Finally, free trade talks require "strong political leadership" on both sides because of the hard decisions required to reach a deal, she said.
There are a number of things the two countries can do to strengthen economic ties while laying for the groundwork for free trade talks sometime in the future, Cutler argued.
Those include reducing regulatory trade barriers and promoting priorities such as increased intellectual property rights protection in the Asia-Pacific region, Cutler said.
Japan and the United States also should work together to strengthen the Asia Pacific Economic Cooperation (APEC) forum and to bring world trade talks to a successful conclusion, she said.
Cutler also is the chief U.S. negotiator in the talks with South Korea on a free trade agreement.
She told the Carnegie audience she remained optimistic Washington and Seoul would be able to successfully finish those talks within the next five weeks.
