TOKYO -- The U.S. wants assurance from Japan that the Asian country will fully satisfy its tariff-free import quota for rice in the envisioned Trans-Pacific Partnership, according to sources familiar with the trade negotiations. 
     The request for the government assurance has emerged as a fresh sticking point in the TPP talks, with Japan stating that it is not obligated to make such a commitment.
     The U.S. presented the demand when the two nations held meetings last Thursday and Friday in Tokyo, the sources said. Japan objected, leaving a divide on the issue as well as on the level of the import quota.
     "Japan says it can only accept about 50,000 tons. The U.S. says no kidding, it's 175,000 tons. It's about how to find a landing spot," said Japanese Economic and Fiscal Policy Minister Akira Amari, who represents Japan in the talks. "We are struggling to minimize damage on market prices and production of rice," he said Tuesday during a program by the public broadcaster NHK.
     The issue of the government assurance is likely to come under a spotlight when Amari meets with U.S. Trade Representative Michael Froman at ministerial-level talks at the end of the month.
     The U.S. is a major rice exporter, equaling Thailand, even under the existing minimum access quota system for tariff-free imports. The country is concerned that simply setting up a quota does not necessarily boost actual exports -- Japanese consumers generally prefer domestic rice, and the weak yen has made U.S. rice less affordable.
     With rice consumption falling, guaranteeing a large import quota could increase the burden on Japanese farmers.
     But some say that U.S. rice has limited potential to expand its market share in Japan under free competition with Japanese rice.
     "The impact may be smaller if we drastically increase the import quota with no guarantee, rather than guaranteeing to import 50,000 tons," said a Japanese government source.

July 16, 2015
Source: nikkei