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ECONOMY > Trade

Anecdotes from talks between USTR Lighthizer, Motegi on May 25

The Japan-U.S. trade talks are finally getting down to business. At the beginning of his summit meeting with Prime Minister Shinzo Abe on May 27, U.S. President Donald Trump declared: “I think we will be announcing some things probably in August that will be very good for both countries.” In contrast to the two leaders’ smiles, however, unexpectedly tough trade talks were taking place at the meetings between the two countries’ ministerial-level officials, the ones in charge of the actual negotiations. True to his reputation as a ruthless negotiator, U.S. Trade Representative (USTR) Robert Lighthizer was overwhelmed his Japanese counterpart, Economic Revitalization Minister Toshimitsu Motegi.

 

It was early evening on May 25. Ministerial-level consultations on the trade talks were to take place at Central Government Building No. 8 in Nagatacho. The staff, however, was on tenterhooks. “Minister Motegi is not going to make it in time. . .” That day, Motegi had to attend a Liberal Democratic Party meeting out of town and was expected to arrive at Tokyo Station at a late hour. Nonetheless, the plan was for him to rush from the station to the meeting venue by taxi and welcome Lighthizer with a handshake.

 

In days past, Lighthizer had welcomed Motegi with a handshake when he arrived for talks at the USTR Headquarters in Washington. [That May evening in Tokyo, however,] Motegi was nowhere to be seen. Although he had arrived at Tokyo Station as scheduled, his taxi was stopped near Marunouchi as were all cars heading toward Nagatacho. President Trump had finished his meeting with Japanese business leaders, and his motorcade was heading out. Motegi’s taxi was caught up in the traffic restrictions related to the motorcade. While Motegi’s vehicle was stopped, Lighthizer arrived at the meeting venue. A Japanese negotiator tried to defuse the situation by engaging Lighthizer in conversation on sumo and other similar matters, but Lighthizer glared at his watch with a stern look on his face and asked: “Where is Motegi?” A Japanese negotiator surmised that “he was trying to gain the psychological upper hand even before the negotiations started.”

 

Robert Lighthizer. He is 71 years old, born in 1947 in the state of Ohio. Lighthizer is a brilliant man and a qualified attorney. He assumed the post of deputy USTR at the young age of 36 under the Reagan administration. He is known as a demon negotiator who made Japan accept its voluntary restraints on steel exports during the then-Japan-U.S. trade friction. There is an anecdote about him at that time: He made a paper airplane out of a Japanese written proposal set on the negotiation table and flew it.

 

No explanation of the tough measures he took after taking office as the USTR under the Trump administration is needed. He imposed 25 percent tariffs on steel and aluminum imported to the U.S., standing in the breach of the trade war with China. There was a rumor of discord between him and President Trump, but the president apparently has great confidence in him, entrusting him with significant authority in trade negotiations.

 

When Motegi finally arrived, the two ministers sat down to begin talks. Motegi had prepared two things. First, he pointed to the uniform of Pittsburgh’s American football team displayed on the wall, telling Lighthizer: “This symbolizes my desire to revitalize the rust belt.” Even though Motegi, who graduated from Harvard University, is completely fluent in English, he took the trouble to consult a Foreign Ministry bureaucrat in advance to make sure he got his English right in this conversation.

 

However, there was no reaction from Lighthizer. According to an informed source, Lighthizer thought Motegi was talking about a hockey team and replied, “I hate that team.” Motegi had worked hard to prepare for this big event, but from the beginning the talks did not go well.

 

After that, Lighthizer went on the offensive. He asserted that they should first talk about the abolition of Japan’s tariffs on U.S. agricultural products. Motegi refused and said that tariffs can only be reduced to TPP levels and that in exchange for reducing agricultural tariffs, the U.S. should eliminate tariffs on autos and auto parts.

 

If the opening up of Japan’s market for farm products does not come with the scrapping of auto tariffs, this would mean Japan was unilaterally forced to open up its market for farm produce. Also, it would lead to the failure of Abe’s economic diplomacy or his capitulating to Trump, and this would affect the Upper House election in July.

 

Although the Japanese government had explained this repeatedly to Lighthizer, he still insisted on making the aggressive demand to reach a farm deal first. He did not give an inch in his demand and said, “The U.S. will never abandon tariffs on autos and auto parts.” Motegi also maintained that unless the U.S. made compromises on tariffs on autos and other industrial products, it would not be possible to open up the market for farm products on par with TPP levels. The talks ended in an impasse.

 

Lighthizer even went as far as saying that in the first place, the U.S. has suffered from enormous trade deficits with Japan for decades, blaming Japan for this, so that’s why Japan should open up its market and help reduce the deficit. When Motegi retorted that negotiating on tariff reduction may not necessarily contribute to reducing the deficit directly, Lighthizer suddenly adopted a stern expression and rebuked Motegi: “That’s because you have little experience!”

 

In the end, the talks broke down and both sides agreed to a cooling down period and to continuing working-level and ministerial negotiations later to find meeting points.

 

The second thing Motegi prepared was the delivery of sushi to the meeting venue. When he suggested, “Why don’t we talk over sushi?” Lighthizer replied coldly: “I’d rather go back to my hotel and eat a proper meal.” Everyone present was stunned.

 

After Lighthizer left, Motegi moaned: “I’m exhausted,” which was very unusual for this minister who is known for his perceptiveness, good memory, and negotiating skills. But he is also known for his short temper. He cannot tolerate others making mistakes or put up with others’ shortcomings. When he discovers these, he bursts into rage and reviles them. Lighthizer’s awesome negotiating ability actually made Motegi cry foul.

 

While President Trump was in town as Japan’s first state guest in the Reiwa Era, Prime Minister Abe played up his close ties with him and complacently noted that the “Japan-U.S. alliance has never been stronger.” Meanwhile, President Trump articulated that a deal will be made in “August” and said in a Twitter post that “Much will wait until after their July elections.” He did Abe a favor.

 

The tough trade talks between Lighthizer and Motegi that began in April will be held again in June for the third month in a row. Unless Motegi breaches the barrier of the blunt American lawyer, a Japanese victory in trade negotiations with the U.S. will be a dream within a dream.

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