(Adds details from hearing, quotes, detail on next TPP talks)
* Republican: Japan should sit out trade talks if not ready
* Froman says biologics rules one challenge in Pacific pact
By Krista Hughes
WASHINGTON, April 3 (Reuters) - The United States pressed Japan on Thursday to open its farm and auto markets to overseas competition and said it could not expect special treatment in a Pacific trade pact covering one-third of global imports and exports.
U.S. Trade Representative Michael Froman told U.S. lawmakers that Japan’s reluctance to lower trade barriers was holding up agreement on the 12-nation Trans-Pacific Partnership, which would stretch from Asia to Latin America.
Despite intense talks between the United States and Japan, the two biggest economies in the negotiations, Japan has yet to come forward with an offer to close the gaps on trade in farm goods and autos.
“It’s time for Japan to step up to the plate,” Froman told the House Ways and Means Committee during a three-hour hearing on the U.S. trade policy agenda.
Washington’s frustration at the slow progress in formal negotiations on the TPP, a centerpiece of President Barack Obama’s push to expand the United States’ presence in Asia, is growing as talks enter their fifth year.
Japan was the last to join in 2013. The move raised the stakes for all participants given the size of Japan’s economy, but some say it was premature given the country’s desire to protect its rice, wheat, beef, pork, dairy and sugar sectors.
Ways and Means Committee Chairman Dave Camp, a Republican, said Japan should be cut out of the talks if it is not ready to make the necessary commitments.
Froman said such a decision was up to Japan, but that one country could not refuse to negotiate on sensitive issues while others put up more ambitious offers.
“All the other countries are waiting for Japan to play its appropriate role in these negotiations, and once the market access piece falls into place we expect to be able to resolve the other issues,” Froman said.
Obama is expected to press the case for an ambitious TPP deal with Japanese Prime Minister Shinzo Abe during a visit to Japan later this month, but USTR officials have played down expectations for a breakthrough.
Two rounds of U.S.-Japan talks on agriculture and autos in the last week made little progress. Acting Deputy U.S. Trade Representative Wendy Cutler will visit Tokyo from April 7 for further negotiations ahead of Obama’s visit. A further round of broad TPP negotiations is penciled in for May.
Japan’s deputy chief trade negotiator, Hiroshi Oe, said on Friday the United States also had to show some flexibility.
The United States had hoped to complete the TPP, which includes Canada, Mexico, New Zealand, Malaysia and others, by the end of last year but the timetable has now slipped to some time in 2014.
Aside from Japan, Froman said, one of the biggest challenges was intellectual property protection for biologics, medicines made from a living organism or its products and used in the prevention, diagnosis or treatment of cancer and other diseases.
The United States is seeking 12 years of protection, but other TPP countries either have no protection at all or have protection for shorter periods, and a consensus has not yet emerged, he said.
Some trade experts say the U.S. negotiating position is weakened by opposition in Congress, especially among Obama’s Democrats, to granting the White House power to fast-track trade deals and put them to lawmakers for a yes-or-no vote, without amendment.
Critics say the TPP will hurt U.S. industries and jobs by encouraging factories to move production to cheaper locations offshore and inhibit lawmakers’ freedom to design policies suitable for local conditions.
Froman said he was ready to work with Congress on fast-track authority and also to renew the Generalized System of Preferences, under which the United States gives developing countries duty-free access on a range of goods. This would help Ukraine, he said, in response to a question about the U.S. reaction to Russia’s annexation of the country’s Crimea region.
Froman also said the United States was waiting for the outcome of elections in India to tackle complaints over intellectual property rights from U.S. businesses upset about Indian companies that produce cheap generic versions of medicines. (Reporting by Krista Hughes; Editing by Mohammad Zargham)