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U.S.-Japan trade talks held up by push for China deal

  • March 15, 2019
  • , Nikkei Asian Review , 5:41 a.m.
  • English Press

TOKYO — Japan and the U.S. are struggling to lay out a timeline for negotiations toward a bilateral trade agreement as Washington focuses its energies on securing a deal with Beijing.


Both sides were originally eager to conclude a trade agreement on goods, or TAG, as soon as possible to maximize the political benefits. But when high-level talks will even start is now unclear, with U.S. Trade Representative Robert Lighthizer once again pushing back a meeting with Japanese point man Toshimitsu Motegi.


At a September 2018 summit between Japanese Prime Minister Shinzo Abe and U.S. President Donald Trump, the two sides had agreed to begin trade talks.


Tokyo wanted Lighthizer and Motegi to meet this April so that they could make progress before Trump’s visit to Japan in late May. But Lighthizer’s office replied that it was not possible to arrange the meeting at this time.


This is not the first delay. The lead negotiators were originally supposed to meet as early as January, but the U.S. decided to focus first on trade talks with China. Lighthizer later hinted that he could meet with Motegi in March, though that also failed to materialize.


Given Trump’s initial deadline of March 1 to raise punitive tariffs on Chinese goods, Japan was hopeful that Washington and Beijing would reach some kind of deal by late March and clear the way for the TAG talks. But a senior Trump administration official says this now may not happen until April.


Trump said Wednesday that he is in “no rush” to meet with Chinese President Xi Jinping for a deal.


Both Motegi and Lighthizer have far-ranging duties, and it usually takes about a month for officials in their position to arrange a meeting. Since they have yet to begin preparations, their first meeting will likely not come until at least early May — only weeks before Trump’s Japan trip.


Some voices in the Japanese government favor starting negotiations as soon as possible. They believe that if Motegi and Lighthizer get on the same page fast, the U.S. will be more likely to accept Japan’s position: that it cannot lower agricultural tariffs further than it did under the Trans-Pacific Partnership trade pact, which the U.S. exited long before it took effect late last year.


Japan has begun lowering duties on beef and other goods from TPP member countries and the European Union, with which it has an economic partnership agreement that took effect in February. American farm interests are growing concerned that their products are losing their edge, adding to pressure for a quick bilateral agreement.


Lighthizer told lawmakers on Tuesday that he aims to conclude talks with Japan swiftly, especially on agricultural products. If the countries can finalize a TAG before the U.S. presidential election in 2020, Trump could claim it as a success. Tokyo is optimistic about the odds.


An accelerated timeline would help Japan as well. Negotiations in such areas as drug pricing and food safety standards normally take years, including needed legal revisions. If the U.S. wants a deal soon, Japan could keep many of these politically sensitive issues off the table.


It could also mean less pressure on export limits and currency policy. When renegotiating the North American Free Trade Agreement with Canada and Mexico, the Trump administration called for auto export caps and restrictions on competitive devaluation. It is expected to make similar demands to Japan, which Tokyo plans to reject.


But if U.S. negotiations with China drag on, talks with Japan may get pushed back too far for them to reach an agreement before the 2020 election. Washington would be more likely to press unfavorable conditions on Tokyo if it has no strict timeline to follow.

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