Asia-Pacific pact seen on agenda for Obama-Abe talks

WASHINGTON Fri Feb 15, 2013 5:47pm EST

Japan's Prime Minister Shinzo Abe speaks to media after attending a meeting of Security Council of Japan at his official residence in Tokyo February 12, 2013 after reports of North Korea's possible nuclear test. Seismic activities detected at around 0300 GMT in North Korea may be the result of a nuclear test, Japan's top government spokesman said on Tuesday. REUTERS/Issei Kato

Japan's Prime Minister Shinzo Abe speaks to media after attending a meeting of Security Council of Japan at his official residence in Tokyo February 12, 2013 after reports of North Korea's possible nuclear test. Seismic activities detected at around 0300 GMT in North Korea may be the result of a nuclear test, Japan's top government spokesman said on Tuesday.

Credit: Reuters/Issei Kato

WASHINGTON (Reuters) - President Barack Obama and Japanese Prime Minister Shinzo Abe are expected to discuss Japan's possible entry into regional free trade talks with the United States at a White House meeting late next week, U.S. trade policy specialists said on Friday.

A nuclear test by North Korea on Tuesday that drew international condemnation is also expected to figure prominently in their talks, the first meeting of the two leaders since Abe led his party back to power in December.

"The president looks forward to in-depth discussions with Prime Minister Abe on a range of bilateral, regional and global issues, including the U.S.-Japan Security Alliance, economic and trade issues, and deepening bilateral cooperation," Obama's press secretary, Jay Carney, said in a statement.

Japan has been considering whether to join U.S.-led talks on the Trans-Pacific Partnership since at least 2011.

Its decision was put on the back burner in the face of more pressing domestic concerns and stiff opposition from Japanese farmers opposed to opening the country's market to rice imports from the United States.

In recent weeks, Japan addressed a major U.S. precondition for its participation in the talks by easing restrictions on American beef that date back to discovery of several cases of mad cow disease in the U.S. cattle herd nearly a decade ago.

A group of U.S. senators led by Senate Finance Committee Chairman Max Baucus thanked Abe in a letter for that move and urged Japan to take additional steps to fully open its market to U.S. beef.

According to Japanese press reports, Abe is interested in joining the Trans-Pacific Partnership if he gets reassurance from Obama that some of Japan's politically sensitive products will be shielded from full market-openings.

That is a tough commitment for Obama to make up front since the official position of TPP negotiators is that everything is "on the table in the talks," said Jeffrey Schott, a senior fellow at the Peterson Institute for International Economics,

However, as a practical matter, it is not unusual for the United States to agree at the end of negotiations to less than full market opening for one or more products, Schott said.

The United States did not require South Korea to open its rice market in a trade pact the two signed a few years ago. Washington also shielded U.S. sugar producers from increased imports in a deal with Australia, Schott said.

The 11 TPP countries - which include Canada, Mexico, Australia, New Zealand, Chile, Peru, Singapore, Malaysia, Vietnam and Brunei - hope to reach an agreement this year.

The difficult nature of the talks makes it possible that the deadline will be missed, Clayton Yeutter, a former U.S. trade representative, said during a panel discussion at the Peterson Institute.

But the window of opportunity for Japan and others such as South Korea to join the negotiations is closing. "People need to understand, particularly folks in Japan, that this train is not going to sit in the station forever," Yeutter said.

Next week's meeting is an opportunity for Obama and Abe to discuss how to handle Tokyo's "sensitivities" in way that sets the stage for Japan to join in timely fashion, Yeutter added.

(Reporting by Matt Spetalnick and Doug Palmer; editing by Christopher Wilson)