Japan should be cut out of Pacific trade talks if it will not open its markets to more farm imports, New Zealand Prime Minister John Key said on Thursday, urging the Obama administration to hold firm.
Japan has been reluctant to open up agricultural markets such as pork, beef, rice and dairy, and U.S. trade negotiators seem willing to allow the country to keep some protection for sensitive products, upsetting U.S. farmers.
Key, who is visiting Washington, said it was essential to keep a high standard for the Trans-Pacific Partnership (TPP), which would connect a dozen economies by cutting trade barriers and harmonizing standards in a deal covering two-fifths of the world economy and a third of global trade.
All countries had sensitivities, but all signed up to an ambitious, comprehensive deal - including Japan.
"If they can't meet those terms and the other 11 partners can, then we should get on and do a deal with those 11 partners," Key said at a U.S. Chamber of Commerce event, adding that his preference was to keep Japan in.
Asked to respond, a Japanese government official said on Friday, "We do not comment on every statement made by TPP partners because we do not negotiate through the press."
But Japan will continue to negotiate in good faith with all the partners in the trade talks, including New Zealand, added the official, who declined to be identified because of the sensitivity of the negotiations.
Rather than accept a deal that does not eliminate tariffs on key products, some U.S. farm groups have also asked for Japan to be excluded from the talks, now in their fifth year.
Trading partners are concerned that too-generous concessions to Japan could have a domino effect and cause the whole agreement to collapse.
The countries participating in the talks have made significant progress over the last few months, a spokeswoman for Singapore's trade and industry ministry said on Friday.
"The parties remain committed to concluding an ambitious, comprehensive and high-standard agreement," she added.
Australian officials who declined to be identified because of the sensitivity of the talks also said they remained confident a deal would be reached.
Japanese Prime Minister Shinzo Abe has made TPP a key part of his strategy to create sustainable growth in the world's third biggest economy. A package of economic measures to be unveiled next week pledges a sustained commitment to conclude the ambitious 12-nation deal.
Japan and the United States together account for about 80 percent of the combined GDP of the 12 members.