UPDATE 2-U.S. says Japan must negotiate on rice to join trade talks

Wed Feb 20, 2013 1:19pm EST

* Abe, Obama expected to discuss Trans-Pacific Partnership pact on Friday

* Current TPP members hope to finish talks on trade deal this year

By Doug Palmer

WASHINGTON, Feb 20 (Reuters) - Japan must be willing to negotiate in all trade sectors, including politically sensitive ones like rice, if it wants to join the United States and 10 other countries in talks on a regional free-trade pact, the top U.S. trade official said on Wednesday.

"We aren't going to begin the process by saying, 'Oh yeah, you get to have certain protected sectors or issues,'" U.S. Trade Representative Ron Kirk said in an interview before Japanese Prime Minister Shinzo Abe's meeting with President Barack Obama on Friday.

Japan has been considering whether to join U.S.-led talks on the Trans-Pacific Partnership (TPP) 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.

Abe, according to Japanese press reports, is looking for reassurance from Obama that some of Japan's politically sensitive products will be shielded from full market-openings if the world's third-largest economy joins the negotiations.

Kirk said the United States has long hoped that Japan would eventually join the negotiations and he did not want to speculate on what Abe might say in his meeting with Obama.

But in aspiring to craft a high-quality "next-generation" trade agreement, all the current TPP countries came into the negotiations "with the express intent to put everything on the table" and Japan must expect to do that as well, Kirk said.

At the same time, Kirk did not rule out the possibility of special treatment for Japanese rice or some other products in the final agreement.

"I think as practical matter, anyone negotiating a trade agreement will tell you that at the end of the day, you fight over those things," said Kirk, who has announced plans to leave office by the end of the month.

The 11 TPP countries - the United States, Canada, Mexico, Chile, Peru, Singapore, Vietnam, Malaysia, Brunei, Australia and New Zealand - hope to finish the talks this year.

That means there is an increasingly narrow window for Japan to join the negotiations before a deal is struck.

Meanwhile, the Obama administration faces intense pressure from Ford Motor Co and the United Auto Workers not to allow Japan into the talks until Tokyo makes a number of reforms to open its market to more auto imports.

Although Japan already has no auto tariffs, Ford and the UAW argue that the country relies on regulatory and other non-tariff barriers to keep out auto imports.

Earlier this month, the U.S. automaker and the union group delivered to the White House petitions signed by more than 40,000 Ford workers against Japan's entry into the TPP.

Kirk had noted both Ford and the UAW strongly had opposed a free-trade agreement with South Korea, but the administration was able to renegotiate that pact to their satisfaction.

Asked if that experience made him optimistic the U.S. government could address Ford and the UAW's concerns in any negotiations with Japan, Kirk said:

"I can't tell you we're going to make everyone happy ... But we are absolutely open. We have had a number of conversations with the auto industry, the ag industry and we'll do our best to see if we can't resolve those" concerns.