Japan, U.S. 'Close' To Major Deal

The prime minister of Japan, Shinzo Abe, said Monday that his country is nearing a major trade agreement with the United States, according to an interview with The Wall Street Journal.

Abe told the Journal that he hopes to come to an understanding with President Barack Obama when he visits Washington at the end of the month as part of a 12-country summit.

"We think that an agreement between Japan and the U.S. is close, but we're hoping that even more progress will be made," Abe said.

The U.S. and Japan are the two most powerful countries involved in the 12-country Trans-Pacific Partnership, a trade agreement that's been in negotiations for more than five years.

Negotiators from both countries met in Tokyo on Sunday and Monday in an effort to smooth out key differences before the summit.

Reuters reported that although the two countries make up a sixth of the group, their ability to come to terms will determine whether an agreement is signed:

Access to Japan's farm market and the U.S. car market remain obstacles to a bilateral deal between the two nations, vital to the success of a long-delayed Trans-Pacific Partnership pact. The world's biggest and third-biggest economies account for some 80 percent of the economic output of the 12-member TPP.

The U.S. is asking for Japan to double its rice imports while Japan is asking the United States to eliminate its 2.5 percent tax on auto parts imports.

"Negotiations can't work if one side makes no concessions, but there are various domestic restrictions," Japan Economy Minister Akira Amari told Japan's public broadcaster NHK. "Rice, in particular, is produced across Japan, so we are carefully negotiating while feeling a domestic sense of crisis."

Coming to an agreement as part of the TPP remains an important step for the prime minister as he continues to try to resurrect Japan's economy.

"Deflation continued for 15 years, and I can't say that it's ended for good, but we have created a situation that is no longer deflation," Abe told the Journal.

While in America, the prime minister will also give a speech to a joint session of Congress and visit Boston, San Francisco, and Los Angeles.

China is not a part of the TPP, adding value for both Japan and the U.S., as they continue to balance against that country's economic rise.