(Repeats story published late Monday; no change to text)
By Kiyoshi Takenaka
TOKYO, April 7 Japan and Australia clinched a
basic trade deal on Monday to cut import tariffs, as U.S. and
Japanese officials stepped up efforts to reach a parallel
agreement that would re-energise stalled talks on a broader
The agreement between Japan and Australia comes as the
United States and Japan push for their own two-way trade deal -
a key component of a broader U.S.-led Trans-Pacific Partnership
(TPP) pact - before a visit this month by President Barack
Australian Prime Minister Tony Abbott and Japanese Prime
Minister Shinzo Abe confirmed a basic agreement on the deal at
talks in Tokyo, and agreed to work towards signing it as soon as
possible, the two sides said in a statement.
"The Japan-Australia EPA (economic partnership agreement) is
an extremely important framework that promotes bilateral trade
and investments," Abe later told a news conference with Abbott.
"This basic agreement has historical significance for
getting the two countries closer together."
The bilateral deal, expected to be finalised when Abe
travels to Australia in July, features cuts to Japanese tariffs
on Australian beef - including a halving of the levy on frozen
beef to 19.5 percent with deep cuts in the first year - and an
end to an Australian duty on cars.
A deal with Australia that lets Japan keep even reduced
tariffs on politically sensitive agricultural products such as
beef gives Japan ammunition against U.S. demands to scrap
tariffs in the TPP deal, which aims to remove import levies,
Such a deal means "Australia gets preferential treatment
over the U.S., and America will be under pressure to strike a
TPP deal short-term that puts it on a level playing-field with
Australia," said Aurelia George Mulgan, a professor of Japanese
politics at the University of New South Wales.
Australia had a lower hurdle on tariffs for Japanese cars
after Australia's three remaining carmakers - Toyota Motor Corp
, General Motors Corp and Ford Motor Co -
decided to quit Australian domestic production by 2017 due to
high costs and a strong Australian currency.
U.S.-JAPAN "GAME OF CHICKEN"
U.S. Trade Representative Michael Froman leaves on Monday
for Tokyo, his office said. He will meet Economy Minister Akira
Amari on Wednesday, Japanese media said, in a bid to break a
bilateral stalemate bogging down the 12-nation TPP talks.
Washington and Tokyo are each urging the other to be more
flexible on the sticking points of access to Japan's farm and
car markets and U.S. tariffs on imported cars and trucks.
The TPP is a centrepiece of Obama's push to expand the U.S.
presence in Asia. The talks have entered their fifth year. The
Japanese and U.S. economies dominate the grouping, which
encompasses one-third of global imports and exports.
"What is going on is a game of chicken," Mulgan said. The
U.S. and Japan "want an agreement but they are not prepared to
pay a high price. Japan knows that America wants it on board
because TPP without Japan is not worth all that much. Japan is
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
Advocates say the TPP could accelerate global economic
growth, boost U.S. exports and level the playing-field between
emerging and rich nations in. The TPP talks, including Canada,
Mexico, New Zealand, Malaysia and others, missed a deadline for
an agreement by the end of last year.
Abe and Abbott also stressed close security ties as Japan
seeks tighter relations with regional partners to cope with a
rising China. They agreed to start talks on cooperation in
defence technology and equipment, following Japan's recent
overhaul of a decades-old ban on arms exports
"The relationship between Australia and Japan is about much
more than economics and trade and growing wealthy together,"
Abbott said at the news conference. "It's about respect, it's
about values and that's why this is such a very strong
In a symbolic gesture, Abbott became the first foreign
leader to attend a special session of Japan's National Security
Council, set up last year to coordinate policies.
"I think this fact that we are having this session with you
signifies the fact that there is a strong bond of trust between
Japan and Australia," Abe told Abbott at the beginning of the
(Writing by Linda Sieg and William Mallard; Additional
reporting by Krista Hughes and David Brunnstrom in Washington
and Kaori Kaneko and Elaine Lies in Tokyo; Editing by Eric
Meijer and Clarence Fernandez)