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Editorial: Make the most of consultations between number two leaders

The economic dialogue between the Japanese and the United States governments has begun. Economic diplomacy with the Trump administration has gotten underway, with the U.S. raising the banner of “America First” and criticizing the trade deficit with Japan.

 

At the first meeting held between Deputy Prime Minister Taro Aso and Vice President Mike Pence, an agreement was reached to promote consultations in the three fields of trade and investment rules, economic policy coordination, and cooperation in infrastructure and energy development.

 

The dialogue was proposed by Japan at the Japan-U.S. summit in February. President Trump, who has repeatedly made extreme statements, is not directly involved in the dialogue but is delegating the matter to the number two leader. The initial meeting did not get into details, but it generally was in line with the outcomes of the summit where Trump refrained from criticizing Japan.

 

At the press conference, Vice President Pence mentioned the possibility that the dialogue could develop into a Japan-U.S. free trade agreement (FTA) in the future. There are fears that the United States will ask Japan for bilateral negotiations and press Japan for unilateral market opening.

 

The Trump administration has withdrawn the United States from the Trans-Pacific Partnership (TPP) trade pact, which included Japan, the United States, and ten other countries, and has shifted to placing priority on bilateral negotiations. With its outstanding economic strength, the United States aims to extract concessions from partner countries.

 

A bilateral FTA in principle brings benefits to both sides through such measures as mutually lowering tariffs. If it will be that kind of agreement, Japan should probably promote it.

 

It is not inconceivable, however, that the Trump administration will make demands that favor the United States. President Trump says, “We need free and fair trade” and he has labeled Japan’s auto trade as unfair.

 

The United States is the one that levies tariffs on imported vehicles. Japan has already removed its tariffs. President Trump has also been critical of yen depreciation, but sales of U.S. vehicles in Japan have also been sluggish at times of yen appreciation in the past.

 

The United States is prepared to ask for market opening for agricultural products. Japan agreed to reduce tariffs in the TPP. It is the Trump administration that withdrew unilaterally from that trade pact.

 

Japan should not agree to bilateral negotiations that would harm its national interests. We would like to see Japan use the dialogue to persistently urge the United States to return to the TPP, which would contribute to the growth of the entire Asia-Pacific region.

 

Vice President Pence was the governor of Indiana, which is home to Japanese auto factories, and he is thought to have a certain level of understanding for Japan’s contributions to the United States.

 

Making the most of the talks between the nations’ number two leaders, Japan should look for ways to avoid being caught up in the pace set by the Trump administration.

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