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No Pacific trade pact this year, ministers to try again next month

Container ships are seen berthed at the Brani container terminal near Singapore's financial district in this February 19, 2010 file photo. REUTERS/Vivek Prakash

By Kevin Lim and Masayuki Kitano

SINGAPORE (Reuters) - An ambitious trade pact between a dozen countries around the Pacific Rim will not be finalized this year as hoped, with no agreement on thorny issues like intellectual property, agricultural tariffs and state-owned enterprises.

The U.S.-backed deal, which Washington wanted to conclude this year, aims to establish a free-trade bloc stretching from Vietnam to Chile and Japan, encompassing about 800 million people and almost 40 percent of the global economy. But differences over farm tariffs between the United States and Japan proved to be one of the major roadblocks.

"None of us have agreed on anything," Tim Groser, New Zealand's trade minister, told a news conference in Singapore on Tuesday at the end of a four-day meeting of the Trans-Pacific Partnership (TPP).

However, he added: "The outline of a genuine 21st century agreement is coming into view and, as is always the case in life, the toughest political decisions will be taken at the end."

The ministers said they had found possible areas where they might agree, known as "landing zones" but need to continue discussions and will meet again next month.

More far-reaching than other deals, the TPP pact is aimed at going beyond tariffs on physical trade and it will try to regulate sensitive areas such as government procurement and give companies more rights to sue.

One problem area is the United States and Japan's disagreement over Japan's long-stated aims to exempt five sensitive farm products - rice, wheat, beef and pork, dairy products and sugar - from the scrapping of tariffs.

The two countries held bilateral talks during the Singapore meeting to try to discuss the issue but have not yet come to any agreement.

"Resolving the U.S.-Japan market access questions will be critical to the success of TPP," said U.S. trade representative Michael Froman in a news conference on the sidelines of the meeting.

Yasutoshi Nishimura, a senior vice-minister for Japan's Cabinet Office, said Japan was still committed to reaching an agreement.

"We are now moving toward that goal while conducting coordination, including on various domestic issues. We are deepening discussions," he said.

The TPP negotiations, which have run for three years, have been mired in controversy over a lack of transparency, and slowed by the conflicting interests of the negotiating countries, U.S. lawmakers and advocacy groups.

No full draft text of the text has been released and few media briefings by the governments involved have been held to explain what's left on the table.

The intellectual property chapter has also sparked disagreement, particularly in relation to increased protection for pharmaceutical patents due to concerns it could limit access to affordable drugs in developing countries.

Australia and New Zealand dismissed earlier media reports that they had given away significant amounts of ground over the issue.

"Our position remains clear, not to agree on a TPP outcome that undermines our pharmaceutical benefit scheme," said Australian trade minister Andrew Robb.

"Within that construct, I think we've been very constructive in terms of the discussions that we've had today," he added.

The full list of those already in the talks is the United States, Canada, Japan, Australia, New Zealand, Singapore, Malaysia, Brunei, Vietnam, Chile, Mexico and Peru.

(Additional reporting and writing by Rachel Armstrong; Editing by Raju Gopalakrishnan)