Pacific trade talks progress but gap between U.S., Japan lingers

SYDNEY (Reuters) - Negotiations for an ambitious trade pact among Pacific countries made significant progress over the weekend, but a gap between Japan and the United States over market access and other hurdles remains, trade representatives said on Monday.

The 12-nation Trans-Pacific Partnership (TPP) is central to President Barack Obama's policy of expanding the U.S. presence in Asia and the president has expressed hopes of concluding a deal by the end of the year.

"There is no prospect for an agreement on market access (between Japan and the U.S.) at the moment," Japanese Economics Minister Akira Amari told a news conference in Sydney.

"I expect we will reach results that satisfy both (countries)," he said, adding that they would hold further talks.

An agreement between Tokyo and Washington is crucial to securing the broader pact as other partners are reluctant to commit until they see how the two resolve their differences, particularly over access to each others markets for industries such as agriculture and automobiles.

Australian Trade Minister Andrew Robb, who hosted the meeting, said the shape of an "ambitious, comprehensive, high standard and balanced deal" was forming.

"There is a real sense that we are within reach of the finish line and the prize does look very attractive," Robb said, describing the negotiations as at the "compromise stage".

"We are seeing a preparedness to make some of the difficult decisions. This includes some of the key issues that we've been circling for a long time in the whole IP (intellectual property) area and market access and state-owned enterprises and other areas."

The United States insists that Japan lower barriers to agricultural imports, but Japan wants to protect sensitive products, including pork, beef, dairy and sugar.

"We made substantial progress but there certainly are issues that remain," U.S. Trade Representative Michael Froman said.

"We've not yet reached a final agreement on a market access package and therefore there is more work to be done before we can say that we are satisfied with market access."

Other outstanding issues include intellectual property rights, particularly on products such as pharmaceuticals, environmental protections and country-specific issues around state-owned enterprises.

(Reporting by Matt Siegel in Sydney and Kaori Kaneko in Tokyo; Writing by Lincoln Feast; Editing by Chris Gallagher & Kim Coghill)