Japan gears up for key Abe-Trump talks

Japanese PM, business lobby making moves to respond to trade pressure from US leader

TOKYO • Japan is scrambling to respond to intensifying trade pressure from US President Donald Trump, with Prime Minister Shinzo Abe planning to meet the head of Toyota Motor Corp this week and the Keidanren business lobby setting up a Trump task force.

Mr Abe will visit Washington on Feb 10 for talks with Mr Trump. The US leader is expected to seek quick progress towards a two-way trade deal with Japan, and also discuss the automotive sector.

Ahead of those talks, Mr Abe will meet Toyota chief executive Akio Toyoda, two sources told Reuters. One of them said the meeting would take place on Friday.

In a phone call with Mr Abe last Saturday, Mr Trump reiterated his pledge to create jobs in the United States and asked that the Japanese motor vehicle industry contribute, the Nikkei business daily reported.

Senior Japanese government spokesman Koichi Hagiuda told reporters after the phone call that the two leaders discussed the automotive industry, without giving details. A White House statement said Mr Trump and Mr Abe "committed to deepen the bilateral trade and investment relationship".

Mr Abe has left open the door to discussing a free-trade agreement with the US, but some officials worry Japan would have little to gain while coming under intense pressure from Washington. However, bilateral talks on specific industries such as the automotive sector are an option, officials had earlier said.

Mr Trump, who last week dropped out of the 12-nation Trans-Pacific Partnership, pushed by his predecessor Barack Obama and favoured by Mr Abe, has repeatedly attacked Japan's automotive market as closed - in an echo of criticism heard two decades ago.

Japan has rejected that criticism, saying that it neither imposes tariffs on US auto imports nor puts up discriminatory non-tariff barriers.

Over the decades, Japanese automakers have developed sport utility vehicles, minivans and pickup trucks specifically targeting American consumers' taste for bigger cars.

Meanwhile, US brands have struggled to make inroads in Japan, where drivers overwhelmingly prefer domestic brands.

Foreign-branded cars accounted for only 7 per cent of the passenger car market, led by Germany, while American brands collectively made up less than a third of 1 per cent of passenger cars sold in Japan last year.

Toyota, Japan's top automaker, has come under fire from Mr Trump for plans, announced in 2015, to move production of its Corolla cars from Canada to Mexico.

Earlier this month, Toyota said it would invest US$10 billion (S$14.3 billion) in the US over the next five years, the same as the previous five years.

Toyota said it directly employed about 40,000 American workers as of December 2015. If dealers and suppliers are included, it indirectly employed over 200,000 workers.

Japan's biggest business lobby Keidanren wants to beef up its information gathering and analysis of the Trump administration's policies while also conveying data on Japan Incorporated's importance to the US economy, said a Keidanren official.

Japan's government is already trying to give Mr Trump's administration a crash course on its companies' contribution to US jobs and growth, with fact sheets showing, among other things, that Japanese companies created 839,000 jobs in America, second only to Britain.

REUTERS

A version of this article appeared in the print edition of The Straits Times on January 31, 2017, with the headline 'Japan gears up for key Abe-Trump talks'. Print Edition | Subscribe