Ministers from the 12 countries involved in the Trans-Pacific Partnership free trade talks failed to reach an agreement at their four-day meeting that ended Tuesday in Singapore, but said they have made "substantial progress" toward hammering out a deal.
Missing the end-of-year target for an accord, the ministers said in a statement that they will meet again "next month" to "continue to work with flexibility to finalize" issues including tariffs, without setting a new time frame.
After the meeting, U.S. Trade Representative Michael Froman said at a joint press conference that the member countries identified potential "landing zones" for the majority of key outstanding issues, and the meeting has "taken us to another step closer" to finalizing a deal.
Japan and the United States, which have been in bitter conflict over thorny issues including Japanese tariffs on farm products as well as auto trade, failed to fill the gaps during the key session in Singapore, hampering the whole negotiation.
Apart from tariff issues, the trade representatives from TPP member states have also agreed to carry over to next year discussion on other remaining issues such as intellectual property rights and reform of state-owned firms, as developed and developing economies remained apart over those issues.
"This time we had various bilateral talks, and of course everybody understands there are sensitivities in each country," Yasutoshi Nishimura, senior vice minister of Japan's Cabinet Office, told the press conference.
"While respecting these sensitivities, we will continue negotiations to achieve a high-level agreement," he said.
A negotiation source said the member states are considering holding the next TPP round in late January, possibly on the fringes of the annual talks of the World Economic Forum at Davos in Switzerland, scheduled for Jan. 22-25.
The TPP pact, which was at first negotiated by eight countries, now has 12 members -- Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.
If successfully concluded, the pact would encompass roughly 40 percent of world gross domestic product and one-third of world trade. It is also seen as having the political purpose of countering the growing influence of China.
South Korea is also considering joining the accord, but some worry that the members may lose momentum for striking a deal after missing the year-end deadline, given the difficulty of making concessions on all issues.
The latest TPP session comes after the World Trade Organization on Saturday reached agreement on some of the issues under the long-stalled Doha Round trade liberalization talks in Indonesia.