US, Japan start trade talks with quick deal in mind

A container terminal in Tokyo. US trade officials have spelt out 22 specific negotiation areas, including non-tariff barriers in Japan's car market and currency. PHOTO: BLOOMBERG
A container terminal in Tokyo. US trade officials have spelt out 22 specific negotiation areas, including non-tariff barriers in Japan's car market and currency. PHOTO: BLOOMBERG

WASHINGTON • United States and Japanese negotiators opened the first round of trade talks yesterday in the latest front in President Donald Trump's aggressive, multi-pronged strategy to address "chronic US trade imbalances".

US Trade Representative Robert Lighthizer welcomed the team from Tokyo led by Japanese Economy Minister Toshimitsu Motegi at the start of two days of talks looking for a rapid deal.

After launching blistering tariffs on allies and rivals alike, Mr Trump's trade team has completed a new North American trade pact with Canada and Mexico, and another with South Korea.

The US also appears to be approaching the final stages of a deal with China, while preparing for the start of negotiations with Europe.

Mr Trump has focused attention on the countries which have the biggest trade surpluses with the United States, and has pushed his preference for country-specific rather than multilateral deals.

Mr Trump and Japanese Prime Minister Shinzo Abe agreed in September to launch talks between the world's largest and third-largest economies, which represent about 30 per cent of global output.

In Tokyo last week, Mr Motegi predicted that the crunch talks would be "candid", with the first round focused on "making a decision on which areas we will discuss, chiefly in the field of goods".

The agreement between Mr Trump and Mr Abe said the negotiations initially would address "goods, as well as other key areas including services, that can produce early achievements", while leaving access for US agriculture to Japan's market for another day.

In May, Mr Trump ordered his administration to investigate the possibility of imposing tariffs of up to 25 per cent on foreign cars and motor vehicle parts, a prospect that alarmed the industry and could have serious repercussions for Japan and Europe.

US Agriculture Secretary Sonny Perdue said last week he was seeking a "very quick agreement" with Japan on tariff cuts for farm goods.

"I hope we can come to a very quick agreement with Japan over maybe some temporary... provisions and hash out the many other issues that take longer in this area," Mr Perdue said, reported Kyodo News and the business daily Nikkei.

 
 
 

However, the US side is likely to run into opposition from Japan on this issue, Jiji Press reported, citing unnamed government sources.

"There's no way for us to conclude an agricultural deal first," a senior Japanese official told Jiji. If Japan does so, it may violate World Trade Organisation rules related to free-trade agreements, the officials noted.

Tokyo is expected to counter with demands that the US scrap tariffs on Japanese industrial goods if Washington seeks an early opening of Japanese agricultural markets.

Tokyo aims to focus only on tariff matters, describing the talks as "TAG" ( trade agreement on goods).

However, Washington trade officials have spelt out 22 specific negotiation areas, including non-tariff barriers in Japan's car market and currency.

US Treasury Secretary Steven Mnuchin said last Saturday that any agreement will include a requirement to refrain from manipulating currencies to gain an advantage in international trade.

Mr Abe is visiting the US later this month and Mr Trump is expected in Japan next month to pay his respects to the country's new emperor, who will take the throne on May 1. Mr Trump is also expected in Osaka for the Group of 20 summit of world leaders on June 28-29.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on April 17, 2019, with the headline 'US, Japan start trade talks with quick deal in mind'. Print Edition | Subscribe