WASHINGTON • Japanese Economy Minister Toshimitsu Motegi said there are still gaps that needed to be filled before Tokyo and Washington could agree on a bilateral trade deal and that negotiations with his American counterpart were "very tough".
Mr Motegi is visiting Washington for talks with US Trade Representative Robert Lighthizer. The two sides are hoping to narrow gaps on areas such as agriculture and automobiles in order to clinch an early bilateral deal.
"Issues that need to be sorted out in ministerial-level talks have been narrowed down quite a bit," Mr Motegi told reporters on Wednesday after his meeting with Mr Lighthizer. "We agreed to speed up discussions and work on the remaining issues for an early achievement of results," he said.
The talks aim to lay the groundwork for a possible meeting between Japanese Prime Minister Shinzo Abe and US President Donald Trump, to be held on the sidelines of this weekend's Group of Seven summit in France.
Under his "America First" policy, Mr Trump has been urging Japan and other trading partners to take steps to fix what he sees as unfair trade imbalances with the United States.
Separate trade talks with China and Europe have made little headway and Mr Trump is keen to clinch an early deal with Japan that would open up its politically sensitive agriculture sector, as well as curbing Japan's US-bound auto exports.
Japan also hopes for a timely deal to avoid being slapped with up to 25 per cent tariffs on automobile exports to the US.
Mr Trump had threatened to do so on national security grounds in May, but put off imposing the duties by six months.
"Discussions are undoubtedly deepening. But there are still gaps that need to be filled," Mr Motegi said, when asked whether progress had been made towards an agreement at Wednesday's meeting.
The key sticking points are agriculture and automobile.
Washington is targeting Japan's auto exports, which account for about two-thirds of the US trade deficit with Japan at roughly 7 trillion yen (S$91 billion) a year. Mr Trump also wants Japan to open up its market for agriculture goods and beef from the US.
US auto industry officials said this week the deal is likely to involve Tokyo offering US farmers new access to its market, in return for Washington reducing tariffs on certain Japanese auto parts.