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Japan prepared to start bilateral trade talks with U.S.

Over the weekend all national papers published numerous articles on U.S.-Japan trade, with some projecting that the GOJ is apparently ready to begin new trade talks in the face of what the papers characterized as relentless U.S. pressure. The papers speculated that Tokyo has concluded that it will have no choice but to enter bilateral tariff talks in order to avoid the possibility of additional U.S. tariffs on Japanese vehicles. Sunday’s Yomiuri claimed in its lead story that the Abe administration is poised to launch a new venue for trade talks with the U.S. on the condition that the Trump administration will not impose additional tariffs on Japanese auto imports. Economic and Fiscal Policy Minister Motegi is likely to propose the idea during his second round of “free, fair, and reciprocal” (FFR) talks with USTR Lighthizer in New York on Tuesday. According to the paper, Japanese tariffs on beef and other U.S. agricultural products as well as Japanese autos will probably be taken up in the envisaged dialogue.


The daily claimed in an accompanying article that the GOJ is inclined to start new trade talks with the Trump administration based on the judgment that President Trump may go ahead and impose additional auto tariffs if Japan flatly rejects a U.S. call for bilateral FTA negotiations. From the Japanese standpoint, rather than a venue for forging an FTA with the U.S., the new talks will be a mechanism to urge Washington to return to the TPP. The Abe administration will reportedly enter new trade negotiations on the premise of the standards agreed to in the TPP accord signed by the 12 nations in 2016. The daily added that Japan is determined to reject any U.S. request for restricting auto exports to the U.S. market.


Other papers conjectured that Japan is likely to accept a U.S. request for bilateral trade talks on reducing import tariffs on American products in exchange for U.S. assurances that it will not level higher tariffs on Japanese vehicles. Mainichi speculated that Motegi and Lighthizer will probably agree on the launch of new trade talks to increase bilateral trade and investment. The daily also claimed that President Trump is extremely eager to win trade concessions from Japan ahead of the November midterm elections since he has already forged trade agreements with Mexico and the EU. Nikkei claimed that the Abe administration will agree to start new trade talks to head off a possible bilateral “trade war” in the belief that the global economy would be thrown into chaos if a “trade war” were to break out between the U.S. and Japan on top of the trade conflict between the U.S. and China. Nikkei and Yomiuri also wrote that in entering new trade talks with the Trump administration, Japan will probably attempt to take a page from the playbook of the EU, which successfully headed off tariffs on its auto exports to the U.S. by agreeing to launch talks seeking the “elimination of tariffs, nontariff barriers, and subsidies” in trans-Atlantic trade. 


Today’s Asahi said Japan is bracing for stronger trade pressure from President Trump, quoting a USG source as saying that the U.S. leader is now zeroing in on Japan so “Japan had better be prepared for the upcoming summit.” The daily claimed that when meeting with PM Abe in the past, President Trump mentioned Ohio, Michigan, and other U.S. states and said: “We want billions of dollars of investment from Japan right now.”


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