Japan May Face Increased U.S. Pressure over Trade

June 13, 2018

Tokyo- Japan may face increased pressure from the United States to open its markets further as the administration of U.S. President Donald Trump is aspiring for tangible results ahead of midterm elections in the autumn.

Trump last week expressed frustration over the U.S. deficit in bilateral auto trade with Japan.

"Obviously, we buy a lot of things from Japan, particularly automobiles," Trump said before a White House meeting with Japanese Prime Minister Shinzo Abe on Thursday.

Gaps remained even after Abe told Trump that Japan will import more U.S. products, such as defense equipment and liquefied natural gas.

The Office of the U.S. Trade Representative has been criticizing what it claims to be the closed nature of the Japanese auto and farm markets and Japan's current system for setting government-administered drug prices.

Washington may press for concessions from Tokyo using new bilateral trade talks that Abe and Trump agreed to launch as early as July. The talks will be led by Japanese economic and fiscal policy minister Toshimitsu Motegi and U.S. Trade Representative Robert Lighthizer.

Japan's basic policy is to avoid concluding a free trade agreement with the United States.

A senior Japanese Foreign Ministry official said it would be difficult for Japan to liberalize its markets beyond what it agreed to under the original Trans-Pacific Partnership free trade deal reached in 2015 among 12 countries including the United States.

Tokyo plans to call on Washington to join forces to build economic rules in Asia in a bid to counter China, a request intended to deflect U.S. pressure to conclude an FTA, sources familiar with the situation said.

But some Trump administration officials are uncomfortable with Japan's approach to trade issues with the United States, a former senior U.S. administration official said.

At a press conference in Tokyo on Friday, Japanese Finance Minister Taro Aso said that the Office of the USTR is busy negotiating other deals such a rewrite of the North American Free Trade Agreement so that it will not be able to assign its staff for talks with Japan anytime soon. Jiji Press