Acting Deputy U.S. Trade Representative Cutler shakes hands with Japan's deputy chief negotiator Oe ahead of their meeting for the TPP free trade negotiation, at the Foreign Ministry in TokyoActing Deputy U.S. Trade Representative Wendy Cutler (L) shakes hands with Japan's deputy chief negotiator Hiroshi Oe ahead of their meeting for the Trans-Pacific Partnership (TPP) free trade negotiation at the Foreign Ministry in Tokyo April 22, 2014. A U.S.-Japan agreement is critical to the U.S.-led Trans-Pacific Partnership, a 12-nation grouping that would stretch from Asia to Latin America. A TPP deal is central to U.S. President Barack Obama's policy of expanding the U.S. presence in Asia and Japanese Prime Minister Shinzo Abe has touted it as a main element of his economic growth strategy. REUTERS/Shizuo Kambayashi/Pool (JAPAN - Tags: POLITICS BUSINESS)
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By Stanley White TOKYO (Reuters) - Japanese officials said on Tuesday there was still a significant way to go before reaching a broad agreement on trade with the United States, a day before President Barack Obama visits for a summit. A U.S.-Japan agreement is critical to the U.S.-led Trans-Pacific Partnership (TPP), a 12-nation grouping that would stretch from Asia to Latin America. A TPP deal is central to Obama's policy of expanding the U.S. presence in Asia. Japanese Prime Minister Shinzo Abe has also touted the TPP as a main element of his economic strategy to increase growth and shake off years of stagnation. As the talks dragged on over recent days, officials from both sides played down the chance of reaching an agreement before Obama's visit. But the longer the standoff goes on, the more doubt could grow about prospects for the trade pact. "We still have a lot of issues left to discuss," Japan's Deputy Chief Negotiator Hiroshi Oe told reporters. "In these circumstances, I cannot say that we have narrowed our differences." Oe spoke after talks with U.S. Acting Deputy Trade Representative Wendy Cutler in Tokyo about trade terms for the TPP. Breaking a U.S.-Japan deadlock over access to Japan's farm and auto markets is seen as key to finalizing the TPP. The United States wants Japan to open its rice, beef and pork, dairy, and sugar markets - politically powerful sectors that Abe has vowed to defend. Japan wants a timetable on U.S. promises to drop tariffs of 2.5 percent on imports of passenger cars and 25 percent on light trucks. Gaps remain over the size of cuts in tariffs on beef and pork as well, Japanese media have reported. Japanese Economics Minister Akira Amari also acknowledged that the many hours of negotiations had not narrowed the gap with the United States. The two countries will likely announce a strong bond at a summit between Abe and Obama this week, Amari said. Obama is scheduled to be in Tokyo until Friday. A final deal, however, could be much further off. TPP negotiators are due to reconvene in Vietnam in mid-May and trade ministers will meet at an Asia-Pacific Economic Cooperation gathering in China that month. (Editing by Dominic Lau and Robert Birsel)