Crucial trade deal eludes Obama on Japan visit

Farm and auto tariffs remain a hurdle despite all-night talks during first stop of US president's Asia tour.

The US president Barack Obama attends a press conference with Japanese prime minister Shinzo Abe at the Akasaka guesthouse in Tokyo on April 24, 2014. Junko Kimura-Matsumoto / AFP

TOKYO // The US president Barack Obama wrapped up a state visit to Japan on Friday during which he assured America’s ally that Washington would come to its defence, but failed to clinch a trade deal key his “pivot” to Asia and to the Japanese prime minister Shinzo Abe’s reforms.

Mr Obama and Mr Abe had been seeking to show the alliance was strong in the face of a rising China, but their success in putting recent strains behind them was partly marred by a failure to reach a trade deal seen as crucial to a broader regional pact.

That failure delayed a joint statement on security and economic ties until shortly before the US leader left for Seoul, the next stop on his week-long, four-nation Asian tour, where he held talks with the South Koren president, Park Geun-hye.

Mr Obama and Mr Abe had ordered their top aides to make a final push to reach a trade agreement after the leaders met on Thursday, but Japan’s economy minister, Akira Amari, said on Friday that gaps remained despite recent progress.

“This time we can’t say there’s a basic agreement,” Mr Amari told reporters after a second day of almost around-the-clock talks failed to settle differences over farm products and cars. “Overall, the gaps are steadily narrowing.”

Seeking to put a positive spin on the trade front, the two sides said in a statement that they were committed to taking “bold steps” to reach a two-way deal, which would inject momentum into a delayed 12-nation Trans-Pacific Partnership (TPP) trade pact.

A senior US trade official said the two sides had achieved a breakthrough on market access, but provided few details.

“There are still details to be worked out. There is still much work to be done ... We believe we do have a breakthrough in our bilateral negotiations,” said the senior official accompanying Mr Obama to South Korea.

The TPP is high on Mr Abe’s economic reform agenda and central to Mr Obama’s policy of expanding the US presence in Asia.

Mr Obama on Thursday assured Japan that Washington was committed to coming to its defence, including of tiny isles at the heart of a row with China, but denied he had drawn any new “red line” and urged dialogue over the dispute.

Friday’s joint statement echoed those comments and put in writing a long-held US stance that the uninhabited islands in the East China Sea are covered by a security treaty that obliges Washington to defend Japan.

Those comments drew a swift rebuke from Beijing, which also claims sovereignty over the Japanese-controlled islands, known as the Senkaku in Japan and the Diaoyu in China. Japanese and Chinese patrol ships have been playing cat-and-mouse near the isles, and Washington is wary of being drawn into any clash.

“Extending the US-Japan security treaty to those islands is both morally and legally wrong,” the China Daily newspaper said in an editorial on Friday. “Obama should not expect Chinese connivance in his turning a blind eye to Japan’s thievery and its claims of innocence.”

The allies also said they wanted to build productive ties with China but expressed concern about its Air Defence Identification Zone covering the disputed isles, announced last year, as well as activities fanning tensions in the South China Sea, where other Asian countries have rows with Beijing.

“Our two countries oppose any attempt to assert territorial or maritime claims through the use of intimidation, coercion or force,” the statement said.

The diplomatic challenge for Mr Obama during his week-long, regional tour is to convince Asian partners that Washington is serious about its promised strategic pivot, without harming US ties with China, the world’s second-biggest economy. Beijing has painted the “pivot” as effort to contain the rising Asian power.

* Reuters