U.S. offers to cut tariffs on 99.5% of goods under TPP

The United States has proposed eliminating tariffs on 99.5 percent of goods imported from Japan, as it presses Tokyo to scrap tariffs even on agricultural products to clinch a 12-nation Pacific free trade deal, a Japanese government source said Thursday.

As of last December, Japan had proposed bringing its tariff liberalization rate to 92 percent, prompting the United States to press Japan in subsequent bilateral talks, the source said.

Bickering between Tokyo and Washington in talks for the U.S.-led Trans-Pacific Partnership initiative has hampered efforts by the 12 negotiating countries to reach agreement.

Under a bilateral free trade deal recently struck with Australia, Japan will reduce tariffs on 88 percent of goods within 10 years.

As the TPP aims for a higher level of trade liberalization than the Tokyo-Canberra deal, Japan is proposing to abolish tariffs on as many processed goods as possible, including those in five agricultural product groups -- rice, wheat, beef and pork, dairy products and sugar.

Japan and the United States are striving to strike a broad deal at a summit between U.S. President Barack Obama and Japanese Prime Minister Shinzo Abe in Tokyo on April 24, but they still need to resolve differences over how to deal with Japanese tariffs on key farm products, as well as auto trade issues.

The source said Washington recently proposed a much longer phase-out period for its tariffs on some auto parts instead of the initially floated 10 years, in an apparent bid to wrest more concessions from Tokyo.

The Japanese side argued that such a setback in the proposal was "unacceptable," while the United States countered its willingness to make concessions over thorny issues depends on Japan's offer regarding tariffs on sensitive farm products that Tokyo wants to protect, according to the source.

The TPP negotiations involve Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.