Japan and Australia clinched a basic trade deal on Monday to cut import tariffs, as U.S. and Japanese officials stepped up efforts to reach a parallel agreement that would re-energize stalled talks on a broader regional pact.
The agreement between Tokyo and Canberra comes as the United States and Japan push for their own two-way trade deal - a key component of a broader U.S.-led Trans-Pacific Partnership (TPP) pact, before a visit this month by U.S. President Barack Obama.
The two sides said in a media statement that Australian Prime Minister Tony Abbott and Japanese Prime Minister Shinzo Abe had confirmed at talks in Tokyo a basic agreement on the deal, and agreed to work towards signing it as soon as possible.
The bilateral deal, which is expected to be finalized when Abe travels to Australia in July, features cuts to Japanese tariffs on Australian beef and an end to Australian duty on cars, major newspapers reported earlier.
A deal with Australia that lets Japan keep even reduced tariffs on politically sensitive agricultural products such as beef would give Japan ammunition against U.S. demands to scrap tariffs in the TPP deal, which aims to remove import levies, experts said.
Japan will agree to cut its tariffs on Australian beef to less than 30% from the current 38.5% and Australia will scrap its 5% duty on small and midsize Japanese cars, the media reports said, citing unidentified sources.
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