It is significant that Japan and the United States have averted a confrontation over trade issues for now and confirmed that they would work together to tackle the issues. The two countries must build a firm relationship in both political and economic aspects to contribute to the stability and development of Asia.
During their meeting, Prime Minister Shinzo Abe and U.S. President Donald Trump agreed to launch bilateral negotiations on tariffs. They plan to conclude a trade agreement on goods (TAG) that will facilitate transactions of goods.
It is imperative for the two nations to proceed with negotiations proactively so as to make them a forum for constructive dialogue that can contribute to expansion of mutual growth.
Be vigilant on car duties
Tokyo had called for Washington to return to the Trans-Pacific Partnership multilateral free trade agreement, but there is little likelihood of the Trump administration agreeing to the request.
It is not good that there is no trade agreement between Japan and the United States, which together account for 30 percent of global gross domestic product.
It was an appropriate judgment for Japan to have agreed with the United States to launch TAG negotiations and push forward invigoration of bilateral trade, despite concessions being made by Japan.
But no optimism can be warranted about the prospect of the upcoming TAG negotiations.
The biggest matter of concern is that Washington puts top priority on reduction of its trade deficits in disregard of the real economic situation.
Trump is aiming for reelection in the U.S. presidential election set for 2020.
Even after the midterm poll in November, it will be impossible to expect a big change in Trump’s method of pressing U.S. trade partners to make undue concessions, deviating from the principle of free trade.
A matter of concern in the Abe-Trump summit was how to deal with punitive duties being studied by Washington to impose on motor vehicle imports.
After the summit, the governments of both countries issued a joint statement that includes the line, “The United States and Japan … will refrain from taking measures against the spirit of this joint statement [which expressed the importance of the Japan-U.S. relationship] …” The Japanese side explains this represents the idea of not invoking punitive duties on car imports from Japan as long as the negotiations are held.
First and foremost, Tokyo should call for Washington to withdraw its idea of imposing punitive duties at all.
In consultative talks with China, the United States once agreed to hold off on punitive tariffs but later broke the promise by imposing additional tariffs.
If Trump is not satisfied with the outcome of Japan-U.S. trade negotiations, he may threaten to push punitive duties again. Japan should not lower its level of vigilance.
In the bilateral negotiations held so far with Mexico, Washington imposed de facto quantitative restrictions on car imports from the country.
In the joint statement, Japan and the United States stipulated that they aim “to increase production and jobs in the United States in the motor vehicle industries.” It is impossible to dispel concerns that the United States will try to force tough demands on Japan, just as it has with other nations.
There is a high likelihood that quantitative restrictions will distort free trade and violate the rules of the World Trade Organization. Japan should resolutely reject any unreasonable proposals made by the United States.
Japan does not apply tariffs on imported vehicles and Japanese automakers also manufacture a huge volume of vehicles in the United States. Viewing Japanese automakers’ vehicles as a problem makes no sense in the first place.
Preserve TPP levels
After being targeted by U.S. trade tariffs, China slapped retaliatory tariffs on many U.S. agricultural products. Consequently, discontent with the Trump administration’s trade policies is mounting among U.S. farmers. It is certain that the United States will strongly press Japan to open its markets to U.S. agricultural products.
The joint statement also included an intention to limit the liberalization of Japan’s agricultural industries to the level promised in the nation’s previous economic agreements. This means Japan will not make concessions greater than the compromises made in the Trans-Pacific Partnership free trade pact.
The contents incorporated in the TPP are hard-fought compromises reached at the end of many years of negotiations between the participating countries. Japan cannot give special treatment just to the United States by offering concessions that greatly exceed those made for the TPP.
Japan must craft an in-depth strategy so it does not cave in to unreasonable demands. The government must continue to tenaciously explain the significance of free trade to the Trump administration.
During their talks, Abe and Trump agreed on the importance of fully implementing U.N. Security Council sanctions on North Korea to work toward the complete denuclearization of that country.
As preparations for a second U.S.-North Korea summit meeting are moving forward, it is significant that Japan and the United States have confirmed a basic plan on this issue by adjusting and coordinating their North Korea policies.
Set N. Korea time limit
A matter of concern is Trump’s approach of hastily seeking improved ties with North Korea. Although North Korean leader Kim Jong Un, chairman of the Workers’ Party of Korea, has mentioned that his nation’s nuclear facilities will be dismantled, this came with the precondition that the United States takes “corresponding measures.” Trump must not be deluded by North Korea’s bargaining tactics.
At a press conference, Trump indicated he would not play a “time game” when it comes to denuclearizing North Korea. This cannot be overlooked.
It is vital that time limits are set and concrete steps to dismantle North Korea’s nuclear facilities are taken within those periods. It is crucial for Abe to repeatedly tell Trump this message.
Abe and Trump agreed to cooperate toward resolving the issue of North Korea’s abductions of Japanese nationals. While closely watching Pyongyang’s efforts to denuclearize, Japan should urge North Korea to agree to hold talks on the abduction issue.