The US and Japan should reach a compromise in bilateral trade negotiations to help conclude a trans-Pacific free trade pact by year's end, a senior Japanese official said today.
Hiroyuki Ishige, who is chairman of the Japan External Trade Organisation, told a Washington think tank that political leaders of both sides need to make bold decisions and recognise the strategic importance of finalising the Trans-Pacific Partnership, or TPP.
His comments come as the US continues negotiations with Japan in Washington this week on opening up its auto market. Japan is also under pressure to open up its heavily protected agricultural sector.
Ishige said the top trade officials have already spent 60 hours in talks and can find common ground.
"Each knows his counterpart's red line. It's time for them to show the political urge for compromise," Ishige told the Center for Strategic and International Studies. "There is no perfect TPP."
Wendy Cutler, acting deputy US trade representative, said there had been progress in the auto talks, "but we still have a lot of work to do."
The US and Japan are the largest players in the 12-nation TPP and resolving their differences is a major hurdle in finalising the pact, whose members account for 40 per cent of global economic output. The chief negotiators of the 12 nations are due to hold another round of negotiations next month.
The TPP is aimed at cutting tariffs and setting trade rules, and is central to the Obama administration's attempt to boost American exports to Asia and re-orientate US foreign policy toward a region of growing economic importance.
The pact is seen as a precursor to a future wide free-trade arrangement for the entire Pacific Rim region.
The pact was slated for completion at the end of 2013. It is still opposed by many of Obama's fellow Democrats.
Cutler steered clear of predictions on when TPP could be completed but pushed back suggestions that would happen without Japan, if they fail to resolve their difference over market access in the auto and agricultural sectors.
