U.S. Ambassador to Japan William Hagerty gave an interview to Jiji Press on April 22 in which he indicated that the liberalization of Japan’s market for agricultural products and its auto trade are very likely to be priority topics in the new trade consultative pillar of the bilateral Economic Dialogue agreed upon at the recent Japan-U.S. summit. He said that Japan’s request to be exempted from the import restrictions on steel and aluminum products will “definitely” be an item on the agenda.

The new trade consultative pillar will be led by Economic Revitalization Minister Toshimitsu Motegi and USTR Robert Lighthizer.

The Ambassador said that the agenda “has not been finalized,” but he pointed out that “at the present tariff level, agriculture is very likely to be a high priority.” He also stated that since automobiles and auto parts “account for a major portion of trade deficits with Japan, they will be discussed.”

Concerning whether the new trade consultations will ultimately develop into a free trade agreement (FTA), he said: “It’s up to Mr. Lighthizer and Mr. Motegi.” He also said, “I am optimistic that we will be able to move quickly toward building a win-win trade relationship between the two countries,” indicating his eagerness to conclude a bilateral agreement.

Japan attaches great importance to multilateral trade and investment rules through the new “TPP 11” agreement signed after the U.S.’s decision to withdraw from the TPP. However, Hagerty pointed out that President Donald Trump prefers bilateral agreements and remarked that “unless there are dramatic revisions, there is little chance that the U.S. will take steps (toward returning to the TPP). I am not saying it’s impossible, but from what I have heard up till now, it is not very likely.”

Commenting on Japan’s procurement of U.S.-made defense equipment, Hagerty noted that “this will contribute to strengthening the security alliance.” He called for the expansion of direct investment from Japan and the strengthening and deepening of the bilateral economic relationship in light of the Trump administration’s deregulation policies and substantial tax cuts.