May 7, 2015 / 8:24 PM / 3 years ago

UPDATE 1-Canada risks being sidelined in Pacific trade deal - USDA head

(Adds unhappy Canadian reaction, paragraphs 6-7)

By David Dolan

May 7, ISTANBUL (Reuters) - Canada risks getting left behind in a 12-nation Pacific trade deal because it has been reluctant to negotiate opening its markets, U.S. Agriculture Secretary Tom Vilsack said on Thursday.

Vilsack also told Reuters that longstanding disagreements with Japan over rice exports would not threaten the Trans-Pacific Partnership (TPP) and that the United States and Japan were working toward a compromise.

Canada, like Japan, has been reluctant to put down a final offer in the talks, over concern U.S. lawmakers could pick apart agreements afterwards. Canada remains keen to shield its dairy industry.

Ottawa has so far not put forth a “reasonable offer,” Vilsack said in an interview in Istanbul ahead of a G20 meeting of agriculture ministers.

“We are rapidly concluding negotiations with most of the other countries, and in a sense we really haven’t started much of negotiation with Canada,” he said. “You wonder whether there is sufficient time to complete that negotiation”.

The comments irritated Canada’s Trade Minister Ed Fast, who told Reuters in Ottawa that “if Secretary Vilsack wants to negotiate through the media, that’s up to him.”

A visibly unhappy Fast added: “We’re going to negotiate an agreement that is in Canada’s best interests. That’s all I have to say.”

The TPP has been an important part of U.S. President Barack Obama’s strategic shift towards Asia. He has described the pact, which economists estimate could add nearly $78 billion a year to U.S. economic output, as the most progressive trade agreement in American history. He is due to make a high-profile pitch for the deal on Friday.

Japan has said proposed U.S. “fast track” legislation, which would speed trade deals through Congress by restricting lawmakers to a yes-or-no vote without amendments, is essential. So far, Senate Republicans are largely expected to back the fast-track bill, while Obama attempts to woo Democrats nervous about potential job losses.

Rice is also an issue for Japan but one that is not insurmountable, Vilsack said.

“I don’t think you are going to see us say, ‘You know what, we’re not going to do TPP because we can’t get exactly what we want on rice,’” he said.

“There’s that medium point and I think the folks have been working really hard to get to that point now.” (Additional reporting by David Ljunggren in Ottawa; Editing by Andrew Heavens and Ted Botha)

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