President Obama fell short of his goal of striking a trade deal with Japan during his whirlwind trip to Asia.
White House officials claimed there was a “breakthrough” in the negotiations, but both sides admit a deal is far from complete, even if they see a “pathway” toward completion in the future.
Without a bilateral accord with Japan, the goal of completing a larger TransPacifc Partnership (TPP) agreement with 11 other counties by the end of this year would be in doubt.
"And so, when we say is there an agreement, the agreement comes on the very last day of the negotiation when you have a comprehensive package. That’s not where we are today,” a senior Obama administration official told reporters Friday on Air Force One.
“Where we are is at that moment where we see how we’re going to achieve resolution potentially of these key market access issues that will help unlock other negotiations,” the official said.
Japan's economy minister, Akira Amari, told reporters that none of the core outstanding issues in the talks have been resolved, The Wall Street Journal reported
Problems remain, including access for U.S. automobiles and farm goods into the Japanese market.
The official statement at the end of President Obama's summit meetings with Prime Minister Shinzo Abe claimed there was a "milestone" in the talks but did not elaborate.
"Today, we have identified a path forward on important bilateral TPP issues. This marks a key milestone in the TPP negotiations and will inject fresh momentum into the broader talks. We now call upon all TPP partners to move as soon as possible to take the necessary steps to conclude the agreement. Even with this step forward, there is still much work to be done to conclude TPP," the statement said.
For Abe, it will be politically difficult to fully open Japanese beef and rice markets to U.S. competition. The Japanese have a deep cultural attachment to a type of small-scale family farming that could be seriously affected by competition from U.S. agribusiness.
In the U.S., opposition to TPP is mostly found in the Democratic Party, where some members worry about a flood of new Japanese autos as well as low cost goods from Vietnam, which is a party to the TPP talks, as well as provisions that could give foreign investors new ways around U.S. regulations.
Another major problem has been the unwillingness of Congress to take up and pass a fast-track trade authority bill this year. A version drafted by former Senate Finance Committee Chairman Max Baucus (D-Mont.) withered on the vine, after Senate Majority Leader Harry Reid (D-Nev.) flatly opposed bringing up a fast-track bill.
The legislation is seen as necessary among trade negotiators because Japan and other TPP partners are unwilling to make politically risky concessions if there remains the likelihood that the TPP deal will be rejected by Congress.
A fast-track bill would limit the ability of Congress to amend the final trade deal and force a vote within a set timeline, in exchange for the Obama administration agreeing to include congressional priorities in the package.
The Obama administration is also trying to clinch a free trade deal with the European Union, but that process appears to be less far along than the TPP.
Both trade deals represent one of the few areas where Obama has a strong chance of getting legislation through Congress in his second term, given the likely support of most Republicans and many Democrats. The trade pacts are also key to Obama's National Export Initiative.
TPP opponents were rejoicing at the news out of Japan on Friday.
“After months of nonstop U.S-Japan bilateral TPP negotiations and now President Obama and Prime Minister [Shinzo] Abe not announcing a breakthrough, TPP should be ready for burial. Instead, like some horror movie monster that will not die, TPP is being animated by a broad coalition of powerful corporate interests and we are told talks will continue but it remains unclear when and how,” said Public Citizen’s Lori Wallach.
The TPP talks began during the George W. Bush administration. The participants include Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
— This story was last updated at 1:11 p.m.