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ECONOMY

Trade talks between Japan and U.S. at standstill

  • January 20, 2022
  • , Sankei , p. 3
  • JMH Translation
  • ,

By Nasu Shinichi

 

Jan. 20 marks one year since the launch of the Biden administration. During this time, trade talks between Japan and the U.S. have not moved forward. The Biden administration has emphasized building cooperative relations with allies through the reinforcement of digital technology and supply chains, with a view to countering China. It is uncertain whether Japan will achieve its goal of having the U.S. join the Trans-Pacific Partnership (TPP) and other free trade agreements (FTA). The issue of additional U.S. tariffs on steel is unresolved. Japan’s trade strategy with respect to the U.S. seems to have reached an impasse.

 

The Biden administration has focused again on cooperation with Asia, a theme which the Trump administration neglected. In the past year in particular, the U.S. has aligned with Japan’s “Free and Open Indo-Pacific Initiative” and has taken actions to strengthen economic security through the “Quad” framework, which is comprised of Japan, the U.S., Australia, and India, in countering China. It is a great achievement that Japan was able to take the lead in this.

 

On the other hand, the U.S. has moved away from participating in large-scale economic partnerships, such as the TPP and the Regional Comprehensive Economic Partnership (RCEP) Agreement. The U.S. instead aims to build a new economic framework for the Indo-Pacific region based on sectors, such as digital technology and green initiatives (decarbonization). Although the U.S. has not offered specific details, Japan will be pressed to make difficult decisions regarding its involvement in these new frameworks while maintaining its position as a promoter of the TPP and RCEP.

 

The Biden administration is also exerting more pressure on China to deal with important security technologies and human rights issues. The Japanese government needs to maintain its “balance between the U.S. and China so as to minimize the impact on domestic companies,” according to Mizuho Research & Technologies Senior Researcher Sugawara Junichi. It seems that Japan needs to reconsider its trade strategy.

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