The 12 countries taking part in Trans-Pacific Partnership free trade negotiations are likely to face difficulties in arranging a ministerial meeting as Japan, the United States and others were unable to narrow the gap over the automotive sector in recent working-level talks.
The participating nations are aiming to hold a ministerial session later this month or in early October, after they failed to reach a broad TPP accord at their previous ministerial discussions in Hawaii at the end of July.
In the latest working-level talks in Washington, which through Friday, Japan, the U.S., Canada and Mexico discussed rules of origin to determine how much auto parts produced in the envisioned TPP free trade region need to be used in finished vehicles for them to enjoy tariff cuts or elimination.
The local content rules would directly affect employment in auto parts industries and therefore are a politically important issue, negotiations said.
“We had constructive discussions, but have yet to reach a consensus. We will continue working,” Takeo Mori, Japan’s ambassador for economic diplomacy told reporters after the four-way meeting.
Canada and Mexico, members of the North American Free Trade Agreement along the United States, strongly oppose setting the local content ratio for auto parts under the TPP at a level far below the 62.5 percent set under NAFTA. They are concerned that a very low ratio would lead to a drop in market shares of Canadian and Mexican auto parts makers in the U.S., one of the biggest automobile markets in the world.