By TAKETSUGU SATO/ Senior Staff Writer
The Abe administration gained some breathing room from the U.S. threat of high tariffs on Japanese auto imports, but Tokyo’s strategy of persuading Washington to take a multilateral trade approach took a further blow.
Japan agreed to new trade negotiations with the United States after long trying to avoid such talks that could lead to a bilateral free trade agreement.
Prime Minister Shinzo Abe has focused on the Trans-Pacific Partnership multilateral agreement, even after U.S. President Donald Trump pulled the United States out of that arrangement.
However, Japan’s attempts to bring the United States back to the TPP have failed.
Trump reminded Abe at the start of their meeting on Sept. 26 that he expected results favorable to the United States in the new round of trade talks.
With reporters in the room, Trump said: “I’m sure that we’ll come to a satisfactory conclusion. And if we don’t …”
Abe only smiled wryly to the veiled threat from the U.S. president.
To avoid talks on a bilateral FTA, Japan had agreed to a different set of negotiations known as the FFR, for free, fair and reciprocal. The last term was included because of Trump’s strong desire to erase the trade imbalance with Japan.
Japanese officials had hoped that negotiations through the FFR would provide a forum for trying to convince their U.S. counterparts about the benefits of returning to the TPP.
But increasing frustration among those U.S. officials at the lack of progress in the FFR talks led to the latest agreement to enter negotiations for a bilateral “Trade Agreement on Goods” (TAG).
At a news conference following his meeting with Trump, Abe touched upon the TAG, saying, “It is totally different from a comprehensive FTA.”
However, the TAG negotiations are nothing but a new round of bilateral talks on tariffs between the two nations.
Abe also stressed that while the TAG negotiations were proceeding, the United States would freeze its earlier decision to place high tariffs on Japanese auto imports.
But if U.S. officials feel that Japan is dragging its feet in the TAG negotiations, they could once again decide to suspend those talks, implement the high tariffs and even pressure Tokyo into opening up its market to U.S. farm imports.
To avoid such a situation, Japan may be forced to make more concessions to the United States in the trade sector.