Japan denies it gave away too much in trade talks with US

"Negotiations have been underway based on a joint statement the two countries agreed on last September," Chief Cabinet Secretary Yoshihide Suga said.
"Negotiations have been underway based on a joint statement the two countries agreed on last September," Chief Cabinet Secretary Yoshihide Suga said.PHOTO: AFP

TOKYO (REUTERS, BLOOMBERG) - Japan’s top government spokesman denied on Monday (Aug 26) that Tokyo made too many concessions in trade talks with the United States, saying the fact the two countries were able to reach a broad agreement was “very valuable".

The United States and Japan agreed in principle on Sunday to core elements of a trade deal that US President Donald Trump and Prime Minister Shinzo Abe said they hoped to sign in New York next month.

The agreement, if finalised, would cool a trade dispute between the two allies just as a trade war between the United States and China escalates, but some Japanese commentators say Tokyo gave up too much.

At a news conference in Tokyo, Chief Cabinet Secretary Yoshihide Suga was asked if the United States had dropped its threat to impose additional tariffs on Japanese automobiles.

“Negotiations are still under way so I’d like to refrain from commenting,” Suga told reporters.  

“But I believe that won’t be the case,” he added, because the two countries’ leaders had confirmed, including at a summit in September, that Washington would not impose higher tariffs on auto and auto parts while trade talks were under way.  

“Japan and the US have negotiated based on the joint statement last September. And related ministers agreed based on that, so it was very valuable,” Suga said.

US Trade Representative Robert Lighthizer said the deal covered agriculture, industrial tariffs and digital trade. Vehicle tariffs would remain unchanged.

Mr Trump said Japan had agreed to buy excess US corn that is burdening farmers as a result of the tariff dispute between Washington and Beijing. Mr Abe referred to a potential purchase of the corn and said it would be handled by the private sector.

"It's a very big transaction, and we've agreed in principle. It's billions and billions of dollars. Tremendous for the farmers," Mr Trump told reporters about the deal during a joint announcement with Mr Abe at the Group of Seven meeting in France.

The Japanese leader said more work remained, but he expressed optimism that it would be finished by the time of the United Nations General Assembly next month.

"We still have some remaining work that has to be done at the working level, namely finalising the wording of the trade agreement and also finalising the content of the agreement itself," he said, through an interpreter.

"But we would like to make sure that our teams... accelerate the remaining work for us to achieve this goal of realising the signing of the agreement on the margins of the UN General Assembly at the end of September."

Mr Lighthizer noted that Japan imports about US$14 billion (S$19 billion) worth of US agricultural products and said the agreement would open up markets to over US$7 billion of such products. He said beef, pork, wheat, dairy products, wine, and ethanol would all benefit from the deal.


"It will lead to substantial reductions in tariffs and non-tariff barriers across the board," he said. He did not go into detail about the industrial and e-commerce aspects of the deal.

Mr Trump, who last week said he had ordered US companies to start looking for alternatives to doing business in China, seemed to dismiss Mr Abe's emphasis that the Japanese private sector would handle the purchases of excess US corn.

"The Japanese private sector listens to the Japanese public sector very strongly... It's a little different than it is in our country perhaps," he said.

Mr Abe, meanwhile, seemed to want to hedge against Mr Trump's suggestion that the corn purchases were a done deal, but he said insect pests had affected some agricultural products in Japan, creating a need to buy certain products.

"We believe that there is a need for us to implement emergency support measures for the Japanese private sector to have the early purchase of the American corn," he said.

"So that's why, against such backdrop, I do think that there is a possibility for us to cooperate to address this issue."

Mr Trump is eager to help out farmers who have been hurt by the trade dispute with China, particularly in political swing states that he needs to support him in his bid for re-election in 2020.

“If you say ‘win-win,’ it’s a capital letter ‘Win’ for the US and a small-letter ‘win’ for Japan,” said Ichiro Fujisaki, a former Japanese ambassador to the US.

“In Japan’s case, it’s a small win plus non-negative assurance that no unilateral measures will be taken by the US, like on limiting car importations or some relations with security issues,” Fujisaki said.