Japan, U.S. Summit Exposes Gap over Trade

Tokyo, May 28 (Jiji Press)--Japanese Prime Minister Shinzo Abe's latest meeting with U.S. President Donald Trump has exposed a gap between the two countries in trade issues. At Monday's summit in Tokyo, the two leaders agreed to accelerate bilateral trade negotiations with the aim of reaching an agreement at an "early" date. But much to Japan's surprise, Trump suggested that an agreement may come as early as August, after Japan's House of Councillors election expected for July. "Trade-wise, I think we will be announcing some things, probably in August, that will be very good for both countries," Trump told a joint news conference after the summit. Japanese officials denied the two leaders agreed to make a trade deal in August. One source even said such an early accord "is absolutely impossible." On the surface, it seems that Trump showed consideration for Abe by averting a Japan-U.S. trade deal before the Upper House election. Japan's agricultural industry, a major support base for Abe's ruling Liberal Democratic Party, is deeply concerned that the government may make huge concessions to the United States in the farm sector. However, Trump's August comment indicates that after the election, Japan is likely to come under intense pressure from Washington to open up its market for beef and other agricultural products. Trump is eager to ink a deal as U.S. farm products have been losing their competitiveness in the Japanese market due partly to the effectuation late last year of the Trans-Pacific Partnership regional free trade pact, from which the United States had withdrawn. Negotiations are expected to be tough for Japan, which has repeatedly said it cannot lower or scrap tariffs on agricultural imports from the United States beyond the levels promised under the TPP deal. At the news conference, Trump said, "We are not involved in TPP." Another tricky issue for Japan is its low-tariff import quota for butter and powdered skim milk for other TPP member countries, which was set, before Washington's withdrawal, at an equivalent of 70,000 tons of raw milk with imports from the United States in mind. "It's difficult for Japan to set a new large quota for the United State or change the quota for TPP members," a Japanese official said. The two countries are also at odds over Japanese exports of automobiles and auto parts to the United States. Japan is urging the United States to lower or abolish tariffs on Japanese automobiles and auto parts. But Washington is expected to keep tariff rates on a wide-range of parts products, including auto parts and products for aircraft manufacturing. The issue is "sensitive" for the Trump administration, which has promised to revive the U.S. manufacturing industry, a senior Japanese government official said. But the official stressed, "We can't accept agricultural market liberalization demands one-sidedly." The Japanese auto industry is watching the Trump administration's moves closely with wariness, as Washington is considering limiting auto imports for national security reasons. A U.S. decision to impose additional tariffs or numerical import restrictions on Japanese vehicles would deal a blow to Japanese automakers, forcing them to review their global production capacities. Domestic factories would also be affected as well. END