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US slow to talk free trade if Japan keeps rice off table
The United States said Wednesday it was reluctant to negotiate a free-trade deal with Japan unless the Asian nation opened up its tightly shut agriculture sector.

Although Washington agreed to exclude rice from the recently concluded free-trade agreement with South Korea, it would not offer a similar concession to Japan, Assistant US Trade Representative Wendy Cutler told reporters.

Cutler was the chief US negotiator of the pact with South Korea, the biggest free-trade deal since the 1993 North American Free Trade Agreement.

"Clearly the agriculture sector provides an obstacle to entering into such negotiations with Japan because to date, Japan, unlike Korea, has been -- let's be honest -- unwilling to put its agriculture sector on the table and negotiate concrete market-opening provisions," she said.

Rice, of which the United States is a major producer, has long been one of Japan?s most protected products.

Tokyo uses tariffs, farm subsidies and production controls to block nearly all cheap foreign rice.

Seoul's agreement with the United States will give Korean companies an edge in the US market over Japan and their other Asian competitors.

A day after the deal, Japan said it would study a free-trade agreement with the United States and wanted to restart trade talks with South Korea.

But Cutler said excluding rice would not become a pattern as Washington negotiates other free-trade pacts in Asia.

"The fact that rice was excluded from this agreement does not set a precedent for other FTA negotiations US may enter into in the future," she said when asked whether rice might be excluded in any pact with Japan.

Cutler also said that the US-South Korea free-trade deal "is probably the most forward-leaning and detailed and comprehensive FTA that the region so far has witnessed."

The 24-chapter pact covers extensive non-tariff measures as well as critical sectors such as intellectual property, investment and financial services. And it "comprehensively addresses" barriers in the agriculture sector, she said.

US negotiators had pushed South Korea hard to include rice in the agreement but Seoul resisted to the very end.

"We had therefore the decision to make between a very, very good deal that was achievable or a perfect deal that would not be achievable," Deputy USTR Karan Bhatia said last week.

Cutler said the free-trade agreement clearly put South Korean reformers in a "unique position" to push the Asian nation to a higher level in the global economy.

"It became apparent during the negotiations that there was a struggle within Korea between the ministries that wanted to open up and reform Korea's economy and other ministries -- and I would be diplomatic here -- which were more inward-looking," she said.

"Ultimately, these issues were taken to the cabinet level in Korea and under the leadership of President Roh (Moo-Hyun) they were resolved in a pro-reform and market-opening manner," she said.

Cutler left open the possibility of including labor and environmental provisions in the agreement with South Korea, in line with current talks between the administration of President George W. Bush and Congress.

"The Congress and administration are currently in discussions more broadly about labor provisions and possibly other provisions with respect to FTAs and we have (made) Korea aware of these discussions.

"When these discussions are concluded, we will need to discuss with Korea the way forward," she said.
MGR Archive 15.4.2007
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