Japan, fresh from Australia pact, says U.S. trade talks 'difficult'

TOKYO Mon Apr 7, 2014 11:19pm EDT

Japan's Chief Cabinet Secretary Yoshihide Suga speaks during an interview with Reuters in Tokyo February 15, 2014. REUTERS/Yuya Shino

Japan's Chief Cabinet Secretary Yoshihide Suga speaks during an interview with Reuters in Tokyo February 15, 2014.

Credit: Reuters/Yuya Shino

TOKYO (Reuters) - Japan, fresh from clinching a basic trade deal with Australia after years of negotiations, said it hoped for a similar result with the United States and for a regional pact, but cautioned that talks were "difficult."

Japan and the United States are pushing for a two-way trade deal, a crucial part of a broad U.S.-led Trans-Pacific Partnership (TPP) before U.S. President Barack Obama arrives in Japan later this month, with U.S. Trade Representative Michael Froman arriving for talks with Economy Minister Akira Amari.

Australian Prime Minister Tony Abbott and Japanese Prime Minister Shinzo Abe confirmed a basic agreement on a deal on Monday, overcoming sticking points on beef and automobiles that had long stymied an agreement, and agreed to work towards signing it as soon as possible.

The hurdles to a deal between Washington and Tokyo include access to Japan's farm and car markets, and U.S. tariffs on imported cars and trucks.

"We hope that the fact that we could reach an agreement on the (Australian) deal will have a positive impact on the TPP and other regional economic agreements," Japanese chief cabinet secretary Yoshihide Suga told a news conference on Tuesday.

He said the United States and Japan were making every effort on pending issues, adding: "The situation is very difficult, but we hope that a positive role can be taken towards a broad agreement on this."

Deputy U.S. Trade Representative Wendy Cutler began talks with Japanese counterparts on Monday. Froman and Amari are likely to meet on Wednesday, Japanese media said.

The deal with Australia, which will allow Japan to keep reduced tariffs on politically sensitive agricultural products such as beef, will give Japan ammunition against U.S. demands to scrap tariffs in the TPP deal, experts said.

But others cautioned that an agreement before Obama's visit was unlikely, noting that the United States - which has said it wants a "high-quality TPP" - was unlikely to favor an arbitrary deadline over results.

"Both sides appear more focused on apportioning blame than on outlining possible compromises," wrote Tobias Harris, an associate at political risk consultancy Teneo Intelligence.

The United States wants Japan to open its rice, beef and pork, dairy and sugar sectors - areas Abe has vowed to defend. Japan wants a timetable on U.S. promises to drop tariffs of 2.5 percent on imports of passenger cars and 25 percent on light trucks.

(Reporting by Elaine Lies; Editing by Richard Pullin)