The Japan-U.S. Economic Dialogue led by Deputy Prime Minister and Finance Minister Taro Aso and Vice President Mike Pence has begun. The two sides agreed to discuss a joint strategy on trade and investment rules and other matters.
We hope that concrete policies will be formulated from the standpoint that the expansion of free trade will benefit the livelihoods of the people of both countries and contribute to the countries’ economic growth.
The international community is watching to see what sort of relationship Japan will build with the U.S., which has withdrawn from the TPP and is increasingly leaning toward protectionism. The two countries should demonstrate their strong bilateral relationship in the process of making rules that will serve as the model for the world.
In particular, consolidating the unity between the two major free economic powers, Japan and the United States, will also serve as deterrence against China’s hegemonic moves on both the economic and military fronts.
Japan must not lose sight of its strategic direction in its process of pursuing the TPP. It should continue to work on the Trump administration and promote multilateral cooperation.
In addition to trade and investment, economic policy and cooperation will also be discussed at the economic dialogue. Aso stated at the joint news conference held after the meeting that the goal is to “spread free and fair trade rules in Asia and the Pacific.”
The U.S.’s trade policy emphasizes bilateral negotiations, which make it easier for America to persuade other countries to accept its demands, and it will adhere to this policy in the Japan-U.S. Economic Dialogue. Pence mentioned in the news conference that this dialogue may eventually develop into a free trade agreement (FTA).
However, there is no need for Japan to concur with this right away. Incorporating economic vitality from overseas comprehensively is indispensable for Japan’s economic growth. It is a matter of course that it should persist in advocating common rules involving as many countries as possible.
In that sense, Japan should engage in in-depth discussions with the relevant countries on effectuating the TPP agreement without the U.S. in parallel with the economic dialogue. It is important to lay the groundwork for the U.S. to rejoin the TPP in the future.
With regard to trade and investment, the agreements reached in the TPP talks should be regarded as the baseline. There are many advanced rules in the TPP accord on protection of intellectual property and other areas. Taking advantage of these rules will be in the interest of both sides.
There is considerable concern that the Trump administration may demand further liberalization of the auto and agricultural markets in its effort to reduce the U.S.’s trade deficit with Japan.
But as a result of the U.S.’s withdrawal, the TPP members will be deprived of the potential benefits of liberalization after the accord takes effect. If the U.S. is aiming to reap greater benefits than under the TPP accord, it is simply too self-centered. Japan will have to reject its unreasonable demands.