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Discrepancy between Japan, U.S. over TAG reflects attempt to maintain consistency with Abe’s remarks

The discrepancy between the Japanese and U.S. versions of the joint statement [issued after the Sept. 26 summit] with regard to the bilateral Trade Agreement on Goods (TAG), which the two countries have agreed to negotiate, reflects the gap between the Japanese government, which denies that it is entering into negotiations for a free trade agreement (FTA), and the U.S. government, which is aiming for a de facto FTA. There is an opinion that the Japanese government is stressing that “the TAG is not an FTA” because the government needs to maintain consistency with Prime Minister Shinzo Abe’s past statement in the Diet denying that bilateral negotiations will be held on an FTA.


On May 8, Abe stated at the House of Representatives plenary session that the Japan-U.S. ministerial talks for free, fair, and reciprocal (FFR) trade “are not FTA talks between the two countries and neither are they preparatory talks for an FTA.”


Japanese farmers are seriously concerned about import tariffs on agricultural products being reduced further under an FTA with the U.S. Abe made the above statement in response to questions raised by the opposition in light of domestic concerns.


Ahead of the bilateral trade talks in late September, a Japanese source close to the negotiations had intimated to reporters that “if talks about an FTA begin, it would cause an uproar in the country and the Diet would not be able to pass it.” For this reason, it is reckoned that the TAG was something devised by working-level officials to avoid entering into FTA negotiations, which would contradict Abe’s response on May 8.


Participants at a meeting of Liberal Democratic Party divisions on trade issues on Oct. 1 asked: “What is the difference between a TAG and an FTA? The English version indicates that goods and services are both included.”


Economic Revitalization Minister Toshimitsu Motegi emphasized that the agreement to be negotiated with the U.S. “will be limited to trade in goods.” A senior administration official also explained repeatedly, “The provisions in TAG will not become an FTA. It will be qualitatively different from the FTAs that Japan has concluded so far.”


However, Reuters reported that USTR Robert Lighthizer told reporters after the Japan-U.S. summit that the U.S. “will aim for a full-fledged FTA.” Apparently, the trade talks will be conducted in two stages, with what Japan is referring to as “TAG” constituting the first stage.


It is widely believed that the trade agreement being negotiated at present will ultimately lead to negotiations for the conclusion of an FTA, as envisioned by the U.S.


After the bilateral summit meeting on Sept. 26, Abe insisted in very strong terms that “[the TAG] will be completely different from the FTAs Japan has concluded so far.”


Seiko Uchida, joint representative of the NPO Pacific Asia Resource Center, which has worked on the translation of the economic partnership agreement (EPA) with the EU and other projects, voiced the criticism that “this is an explanation to conceal the fact that the trade agreement is an FTA with a phony acronym.” (Slightly abridged)


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