Japan, US to hold second round of economic dialogue on Oct 16

US Vice President Mike Pence (left) and Japan's Deputy Prime Minister Taro Aso attend their joint news conference after their talks at the Prime Minister Shinzo Abe's official residence in Tokyo, Japan on April 18, 2017 PHOTO: REUTERS

TOKYO (REUTERS) - Japanese Finance Minister Taro Aso said on Friday (Oct 6) that he would meet US Vice-President Mike Pence in Washington D.C. on Oct 16 for the second round of an economic dialogue between the two countries.

When asked about the possibility that the talks would include trade negotiations, Mr Aso said it is better to improve the way it manages its existing quota system for imports of frozen US beef instead of changing laws to create new rules.

The dialogue is shaping up to be a test of whether the close United States-Japan economic relationship can withstand US President Donald Trump's pledge to create more jobs and lower the US trade deficit.

"Of course, I want to protect Japan's national interests," Mr Aso said. "I also want to have a win-win relationship with the United States on matters of economic policy."

Japan hiked tariffs from Aug 1 on imports of frozen beef, popular in beef bowl dishes, from countries including the US to 50 per cent from 38.5 per cent. The measure follows Mr Trump's withdraw from the long-planned Trans-Pacific Partnership (TPP) trade deal earlier this year.

The tariff hike, set to be in place until next March, is a"safeguard" mechanism to protect domestic farmers but has prompted some concern in Washington.

Under current measures, Japan automatically imposes higher tariffs if quarterly imports of specific beef products from any country rise more than 17 per cent from the previous year.

One way to improve this safeguard is to monitor beef imports for shorter durations, such as every 10 days, to make sure its trading partners do not breach its quota, Mr Aso said on Friday.

The first round of the US-Japan economic dialogue, which was held in Tokyo in April, ended largely without incident. However, there is some concern among Japanese officials that the US side could strongly push for trade concession during the second dialogue meeting.

Japan had a US$69 billion (S$94 billion) trade surplus with the US last year, according to the US Treasury Department, which has expressed concern over what it called the "persistence" of the imbalance.

Japanese officials counter that Tokyo accounts for a much smaller slice of the US deficit than in the past, while China's imbalance is much bigger.

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