US trade negotiator says Japan not ready for free trade deal
Associated Press | 19 October 2007
US trade negotiator says Japan not ready for free trade deal
TOKYO : Japan is not yet ready to commit to economic reforms and other "bold steps" needed to launch negotiations for a free trade agreement with the United States, a senior American official said Friday.
Assistant U.S. Trade Representative Wendy Cutler, in Tokyo for talks with Japanese officials, said Washington would need to be satisfied there was the political will for such a deal in Tokyo before starting such talks.
"During my meetings here, I didn’t sense a readiness from my Japanese colleagues, and so we agreed that we’ll just work on ways to deepen our economic relationship," she told reporters at the Japan Press Club.
"A key factor for us in considering an FTA is the readiness and willingness of any trading partner to come to the table with us and roll up their sleeves and say, ’We’re ready to do a comprehensive deal,’" she added.
The United States and South Korea signed a trade pact in June after nearly a year of difficult negotiations, spurring concerns in Japan of being left behind as nations race to tear down barriers to trade and investment.
Business communities in the U.S. and Japan agree there would be enormous benefits from a bilateral trade pact. But officials in both countries have been cautious about moving forward with such talks, citing the daunting challenges in tackling trade issues between the world’s two biggest economies.
Cutler suggested that Japan did not meet other U.S. conditions for entering into such negotiations, saying for instance that Japanese government ministries are often not unified over policy. She also cited a lack of transparency in government contract bidding.
Japan also would have to display a commitment to lowering tariff and non-tariff barriers to trade, reforming the economy and opening markets, she said, comparing the Japanese case to South Korea.
"The question is when - or some say whether - Japan will be ready to move forward with the same kind of bold steps that led Korea to embark on and conclude a high quality FTA with the largest economy in the world," Cutler said.
A major roadblock is agriculture. The U.S. has long demanded that Japan’s heavily protected agricultural sector be included - a condition that does not please Japanese farmers or its ruling party, which has traditionally catered to rural voters.
But the potential economic impact of a U.S.-Japan free trade agreement is far-reaching.
Total trade between the Japan and the United States topped US$200 billion (€139.87 billion) last year, U.S. Department of Commerce figures show, nearly three times the US$74 billion (€51.75 billion) in trade between South Korea and the U.S. during the same period. Together, Japan and the U.S. account for 38 percent of global GDP.
Business executives on both sides of the Pacific are eager for a deal. The U.S. Business Roundtable and the Nippon Keidanren, Japan’s largest business federation, jointly called for immediate study of such an agreement in January.
