Japan And US Bilateral Trade Talks Frank And Good; Says Economy Minister
Japanese and US officials started talks on Monday to discuss the tariff imposed by the US on goods. The meeting is after both countries heads agreed in September 2018 to start talks on protection from further tariffs and to protect Japanese auto manufacturers. The economic minister of Japan, Toshimitsu Motegi after the first day of the two-day meeting with Robert Lighthizer said that he was opposed to negotiating the inclusion of a currency provision in the trade deal and said that matters related to currency should be handled by the finance ministers of both countries.
After the first day of the meeting, the Japanese economic minister said that the discussion was mainly on the trading of goods and on how to proceed with the negotiations. Motegi said ‘I think we have come to see some priority areas for discussion going forward through our talks today’. He declined to elaborate further. But he did say that the negotiations are in line with the agreement President Trump and Prime Minister Shinzo Abe had made in September and said that the governments ‘will enter into negotiations for a Japan-United States trade agreement on goods as we as on other key areas including services that can produce early achievements’.
In his visit to Japan, Trump had indicated his displeasure over the $68 billion trade surplus most of which were auto exports that Japan had with the US and had said to address this issue there has to be a bilateral agreement. On Sep 26, 2018, a joint statement was released by the two heads that U.S. will not ask for tariff cuts on agricultural products more than what Japan has with other trade partners like the Trans-Pacific Partnership and the EU.
No discussion on currency provision
There seem to be contradictory statements from officials over the currency provisions, while Steven Mnuchin the US Treasury Secretary said that Japan will cooperate on including currency provision in trade agreements to be made so that there is no manipulation of currency. But Motegi contradicted the US official and said that both countries had excluded that discussion and would be done by the finance ministers of their countries.
Trump considers the auto sector as a major area of trade imbalance with Japan as auto parts accounted for a major deficit for the U.S. with Japan. With Motegi saying that talks will proceed to keep in mind the position of the other government, the talks could end fruitfully.