Prime Minister Shinzo Abe went into the talks with U.S. President Donald Trump in New York City having won a third consecutive term as Liberal Democratic Party president. The two leaders agreed to initiate talks on a bilateral Trade Agreement on Goods (TAG) and to continue to cooperate toward the denuclearization of North Korea.
Ensuring a stable relationship with the United States is without doubt one of the most important issues for Abe, who has in hand a mandate through September 2021. He has no choice but to come to an agreement with President Trump on trade issues and the issue of North Korea, which are the foundation of that stability.
Agreement to be in line with TPP
What needs to be expedited is the easing of trade friction. The Trump administration has levied high tariffs on steel and aluminum imports from Japan and has considered doing the same with autos. If this situation is left as is, we cannot expect Japan-U.S. relations to be stable.
At the recent bilateral summit, the two nations’ leaders decided to enter into talks on tariffs on goods, including agricultural products and industrial products. According to the Japanese government, the United States said it will not impose high tariffs on motor vehicles while the talks are in session.
The United States has withdrawn from the Trans-Pacific Partnership (TPP) trade pact, and Japan cannot avoid the question of what kind of trade ties it will build with the United States. We would like to see the two nations take this opportunity to work out constructive measures to promote imports and exports and thereby set for the world an example of [positive] trade talks.
The two nations should strive to create an agreement in line with the TPP’s standards and rules, which represent a high level of liberalization. If this is achieved, Japan will become more appealing as a free trade bloc will be formed, and the United States will also be able to benefit from expanding its agricultural product exports.
As for the agricultural products that the U.S. exports, the nations apparently agreed to a ceiling equal to the level of liberalization Japan has promised in past economic partnership agreements (EPA). This can be considered a realistic decision that will facilitate the bilateral negotiations.
What is of concern is the U.S. tendency to insist on regulated trade. In the renegotiation of the free trade agreement (FTA) with South Korea and the North American Free Trade Agreement (NAFTA) with Mexico, the United States had their partner nation agree to numerical restrictions on their exports to the United States.
It would be unacceptable for the United States to hint at imposing high tariffs on autos and then demand that Japan accept numerical restrictions on its exports to the United States, numerical targets for imports, and enhanced monitoring of the FOREX market. The two nations should abolish all tariff measures, including those on steel and aluminum, and promote negotiations in line with the principles of free trade.
The first and third largest economies in the world have a responsibility to work hard to ensure the stability of the world economy. Holding aloft the ideal of “America first,” the United States is charging down the path of protective trade. Most important of all is that the U.S. exercise self-restraint, and we would like to see Japan continue to persistently urge the United States to adjust course.
In that sense, it is desirable that Japan and the United States discuss the reform of the World Trade Organization (WTO). We welcome the agreement reached by the trade ministers of Japan, the United States, and the European Union (EU) to co-sponsor a concrete proposal [on WTO reform] in November.
The WTO, Japan, the United States, and the European Union also need to join hands to urge that China rectify its violation of intellectual property rights. Efforts to deepen these kinds of cooperative ties and to keep the United States moored through international organizations and rules are indispensable.
Japan should bring into force the “TPP 11” trade pact formed of 11 nations excluding the United States and its EPA with the EU at an early date and hurry to reach an agreement in the negotiations for the Regional Comprehensive Economic Partnership (RCEP). It will be problematic if the creation of a seawall against the tide of protective trade is delayed because Japan is being pressed by the negotiations with the United States.
Japan also confirmed its policy to fully implement the United Nations Security Council resolutions on sanctions against North Korea with an eye to having that country abandon its nuclear weapons program. Japan also agreed to urge China and Russia not to ease up on their enforcement of the sanctions.
Coordination among Japan, U.S., and South Korea in regard to North Korea
It is natural that prompt action was demanded of North Korea regarding denuclearization. President Trump, however, has expressed interest in holding a second U.S.-DPRK summit at an early date, and we are concerned about his overeager stance with the U.S. midterm elections on the horizon. Japan and the United States should once again tighten their solidarity regarding policy coordination, including South Korea.
Japan and the United States also pledged they would cooperate toward the resolution of the issue of the Japanese nationals abducted by North Korea. Prime Minister Abe has repeatedly spoken of his policy to normalize relations with North Korea by taking a comprehensive approach to the abductions, nuclear weapons, and missile issues. For this, Japan must persistently call on North Korea and not just on the United States, South Korea, Russia, and China.
North Korean leader Kim Jong Un reportedly said that he is “prepared to hold dialogue with Japan at the appropriate time and search for a way to improve relations.” There is a major divide between the claims of Japan and North Korea, but the resolution of this issue must be entrusted to these nations’ leaders. This will advance in connection with the discussion on building a framework for peace on the Korean Peninsula, and an environment conducive to this must be created by leveraging the Japan-U.S. relationship.
President Trump declared in his address at the UN General Assembly that the U.S. “rejects globalism and embraces patriotism.” We look forward to the role that Prime Minister Abe will play in objecting to the America first policy in addition to his role in resolving trade issues and matters related to North Korea.