18 May 2011

Japan trade deal hopes dashed

12:11 pm on 18 May 2011

The prospect of a trade deal with Japan has receded as the country defers a decision to enter the TransPacific Partnership.

Japan had been due to make a decision on joining the eight-country trade talks next month.

The country is New Zealand's fourth-largest export customer, but is also one of its most protected trading partners.

Imported dairy products face tariffs of 400%, depressing prices received by farmers in New Zealand.

Joining the TransPacific Partnership (TPP) would have led to the dismantling of such tariffs.

The Japanese government was due to release a study next month on the possible effects on its farmers and would then have made a decision about whether to join the TPP.

Japan has now decided to defer any decision, giving priority instead to recovering from the earthquake and tsunami in Japan in March.

That makes an already tight timetable for joining the talks by November, when TPP countries had hoped to have a deal largely completed, seemingly impossible.