Obama fails to clinch trade deal in Japan, heads to South Korea

President Barack Obama left Japan Friday after failing to clinch a trade deal that is key to both his intended strategic pivot to Asia and to Japanese Prime Minister Shinzo Abe’s economic reforms.

That failure delayed a joint statement on security and economic ties until shortly before Obama left for South Korea, the next stop on his weeklong four-nation Asian tour. In Seoul he quickly reiterated U.S. support for South Korea against North Korea’s nuclear ambitions.

In Japan, Obama and Abe sought to show that the two countries’ alliance is strong in the face of a rising China — a goal that was marred by a failure to reach a deal seen as crucial to a broader regional trade pact.

The two had ordered their top aides to make a final push to reach a trade agreement after the leaders met on Thursday, but Economy Minister Akira Amari told reporters that gaps remained despite recent progress.

“This time we can’t say there’s a basic agreement,” Amari told reporters after a second day of almost round-the-clock talks failed to settle differences over farm products and cars. “Overall, the gaps are steadily narrowing.”

Seeking to put a positive spin on the trade front, the two sides said in their statement that they were committed to taking “bold steps” to reach a deal, which would reinvigorate the delayed 12-nation Trans-Pacific Partnership (TPP) trade pact.

A senior U.S. trade official said the two sides achieved a breakthrough on market access, but the official provided few details.

"There are still details to be worked out. There is still much work to be done ... We believe we do have a breakthrough in our bilateral negotiations," said the senior official, who was accompanying Obama to South Korea.

The TPP is high on Abe’s economic reform agenda and central to Obama’s policy of expanding the U.S. presence in Asia.

Friday’s joint statement echoed comments Obama made Thursday, assuring Abe that Washington was committed to coming to Japan’s defense. It further solidified the U.S. stance that a set of uninhabited islands in the East China Sea, at the heart of a territorial dispute between Japan and China, are covered by a security treaty that obliges Washington to defend Japan.

Those comments drew a swift rebuke from Beijing, which also claims sovereignty over the Japanese-controlled islands, known as the Senkaku in Japan and the Diaoyu in China. Japanese and Chinese patrol ships have been playing cat and mouse near the islands, and Washington is wary of being drawn into any clash.

Chinese Foreign Ministry spokesman Qin Gang said China had “serious concerns” about some of the statement.

“We urge the United States and Japan to abandon their Cold War mentality and respect the concerns and interests of other countries in the region and avoid further interference with regional peace and stability,” he said at a regular news briefing.

The diplomatic challenge for Obama during his regional tour is to convince Asian partners that Washington is serious about its promised strategic pivot — but to do so without harming U.S. ties with China, the world’s second-biggest economy. Beijing has painted the pivot as effort to contain it as a rising Asian power.

Shortly after reaffirming security and economic ties in Japan, Obama arrived in Seoul and took a firm line with South Korea’s President Park Geun-hye against North Korea.

In a display of unity against Pyongyang’s frequent military provocations, Obama and Park warned in a joint appearance that Pyongyang could face tougher sanctions if it follows through with threats to conduct a fourth nuclear test.

Striking an even harsher tone than Obama, Park suggested that any test would trigger an undesirable nuclear arms race in the region and render further nuclear negotiations pointless.

North Korea will get “nothing except further isolation” if it proceeds with its test, Obama said at a joint news conference in Seoul. But he acknowledged there are limits to additional penalties’ effectiveness. “North Korea already is the most isolated country in the world, by far. Its people suffer terribly because of the decisions its leaders have made. And we are not going to find a magic bullet that solves this problem overnight.”

Still, he said, it is important to look at new ways to pressure North Korea, including applying sanctions that have “even more bite.”

Park said that such a test would bring “fundamental change” to the region’s security landscape and trigger a nuclear arms race, as countries hurry to match the North’s nuclear capabilities. She said such an outcome would make it fruitless to resume negotiations with North Korea aimed at getting it to abandon its nuclear program.

In 2009, North Korea walked away from talks with the United States, South Korea, Japan, Russia and China that offered financial incentives in exchange for denuclearization.

Wire services