February 1, 2013 / 12:25 PM / in 5 years

Japan may not decide on U.S.-led trade talks by July poll

TOKYO (Reuters) - Japan may not make a decision ahead of a national election in July on whether or not to join talks on a U.S.-led free trade pact that businesses say would enable them to compete better, the agriculture minister said on Friday.

Prime Minister Shinzo Abe is set to meet U.S. President Barack Obama in Washington in the third week of February, and feels pressure to clarify Tokyo’s stance on the U.S.-led Trans-Pacific Partnership (TPP) free trade pact.

Abe said this week that he wanted to “set the direction” on Japan’s position about the trade talks ahead of the July election for parliament’s upper house, although members of his Liberal Democratic Party (LDP) are wary of doing so for fear of upsetting the powerful farm lobby.

Agriculture Minister Yoshimasa Hayashi, however, told Reuters he felt no such deadline pressure and that it could take time to assess the economic impact of joining the pact on Japan’s economy.

“We should not come to a conclusion blindly before discussions mature. There is no change to this regardless of the timing of the July election,” Hayashi, 52, told Reuters in an interview.

He said the government was working on a comprehensive review of the economic impact from joining the TPP and that he would like to deepen the discussions as early as possible.

“We don’t have to react to what people outside say and rush without enough preparation,” he added.

Abe has repeatedly said Japan will not join the talks if the pact is to require the elimination of all tariffs, but officials have suggested there may be scope for exceptions, such as politically sensitive rice, the country’s staple food.

Hayashi, however, declined to specify for what sectors Tokyo might seek exemptions.

“To say such things would underline how poor Japan is in negotiations,” said Hayashi, who is Harvard-educated and the son of former finance minister Yoshiro Hayashi.

Many businesses want Tokyo to join the pact so that exporters can better compete with overseas rivals, but powerful agricultural lobbies oppose participation for fear of the influx of overseas farm products.

Japan is already the world’s biggest net importer of agricultural products of over 6 trillion yen ($66 billion) a year as Tokyo has gradually opened the market to imports, including beef.

The LDP-led ruling bloc swept to power in a December election for parliament’s lower house, but needs to gain a majority in the upper chamber as well to smooth the passage of legislation. ($1 = 91.2600 Japanese yen)

Editing by Linda Sieg and Ron Popeski

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