US and Japan differences stall Pacific Rim trade deal Deeply rooted differences between the US and Japan over Tokyo's determination to continue protecting its markets for beef, rice and other "sacred" agricultural products are becoming a barrier to sealing a 12-country Pacific Rim trade pact. Japan joined the negotiations towards a Trans-Pacific Partnership in July that will cover almost 40 per cent of the global economy. Other countries praised what appeared to be Tokyo's initial "aggressive" approach towards reaching a deal. The view among many other countries is that Shinzo Abe, the Japanese prime minister, is eager to use the TPP to help push through structural reforms at home. But negotiations between the US and Japan during four days of ministerial meetings in Singapore that concluded on Tuesday failed to find a solution on how to treat agricultural and other products. Michael Froman, the US trade representative, told reporters after the meetings ended, that not enough progress had been made by Japan. Tokyo's offers, he said, had not yet lived up to the "high ambition" of the TPP, pointing to a 2011 declaration in Honolulu in which US President Barack Obama and other leaders called for the wholesale elimination of tariffs. "We are hopeful that Japan is able to come to the table prepared to achieve the kind of outcome that is expected as part of TPP," Mr Froman said. Resolving the US-Japan market access questions will be critical to the success of TPP. Yasutoshi Nishimura, the Japanese vice-minister for trade leading the delegation in Singapore, told reporters: "Japan will continue to do our best to reach this high-level agreement." But earlier on Tuesday he told Japanese reporters that Tokyo could not "give one millimetre" and called for the US to show greater "flexibility." Mr Nishimura replaced Akira Amari, the minister in charge of the TPP negotiations, at the last minute after Mr Amari was diagnosed with tongue cancer. Some analysts have said that because of his more junior status Mr Nishimura was unlikely to have the same authority to cut a deal. Mr Abe on Tuesday pledged "drastic reforms" for the agriculture sector to make it more globally competitive and double annual exports to $1tn, the Kyodo news agency reported. How Japan and the US resolve their negotiations over market access is crucial. While the 12 ministers involved in this week's negotiations in Singapore reported "substantial progress" in a closing statement on Tuesday, that may matter little if the US and Japan cannot find agreement. We are hopeful that Japan is able to come to the table prepared to achieve the kind of outcome that is expected as part of TPP Michael Froman, US trade representative The TPP hinges on a balance between what its participants hope will be ambitious "21st-century" rules on things such as intellectual property rights and more traditional issues of market access. For many of the countries involved, the question is what they are willing to compromise on intellectual property, investment and other rules in return for access to the US and Japanese markets. Mr Froman said ministers had found potential solutions to the "vast majority" of the contentious rules issues in the agreement and handed them to negotiators to do more technical work. Those areas where "landing zones" had been found, he said, included: intellectual property rights (where the US has been insisting on tough rules for copyright and patents); the treatment of state-owned enterprises; rules of origin; and investment. The last is important as that is where the US has been pushing for the establishment of an investor-state dispute settlement mechanism that would allow companies to legally challenge countries who violate TPP rules outside their own courts. Australia has until recently opposed the creation of such a tribunal. It is now facing a case before one in Hong Kong that was brought by the tobacco industry over its plain packaging laws. But Australia's trade minister, Andrew Robb, told reporters on Tuesday that Canberra was now willing to back the idea if it won "substantial" market access in return. Many observers believe the US will have to give Australian sugar cane farmers and other agricultural producers greater access to the American market in return for its backing on a number of contentious areas. The failure to seal a deal in Singapore means the ministers will miss a year-end target set for them by their leaders in October. But in a closing statement they said they would meet again next month. Deborah Elms, a TPP expert at Singapore's S. Rajaratnam School of International Studies, said she now expected a deal to be closed by March, ahead of an April visit to Asia by Mr Obama.