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Japan wants to keep the bilateral dialogue, to be led by Vice
President Mike Pence and Deputy Prime Minister Taro Aso and
starting next Tuesday, focused on economic policy, energy,
infrastructure investment, and the rules of trade.
But Washington requested last week that the United States wanted
to talk about bilateral trade issues including farm products at
the economic dialogue, the source said. Japan rejected the idea
but also told Washington that Tokyo could accept such talks
outside of the dialogue, he said.
U.S. Commerce Secretary Wilbur Ross will also visit Tokyo next
week but it has not been decided whether he will join the
dialogue, the source said.
U.S. President Donald Trump has said he favors bilateral free
trade agreements (FTA) over multilateral frameworks, and has
vowed to take action to narrow the country's big trade deficits
with nations like China, Germany and Japan.
Japan wants to avoid kicking off bilateral FTA talks for fear of
being pressured into opening up highly-protected areas like
agriculture.
Should Japan come under fire for its trade gap, it is prepared
to argue that its share of the U.S. trade deficit is much
smaller than the 1980s and 1990s, when it was harshly criticized
by Washington, Japanese government officials say.
"Unlike bilateral trade talks in the past, this won't be a venue
for the United States to make demands unilaterally. This time we
will say what we have to say to fix their problems too," said
one of the officials with direct knowledge of preparations.
Another government official said rising geo-political tensions
over North Korea may mean Washington will avoid being too
confrontational with Japan on trade issues.
"With the situation over North Korea unstable, it's not a good
idea for any Japan-U.S. tensions (on trade) to surface," said
the official. "For the United States, defense is probably a
higher priority than trade now."
Tokyo has been wary of Trump's complaints that Japan and other
countries block market access to U.S. companies and artificially
weaken their currencies to boost exports.
Japan is resisting America's "strong demand" for trade to be
included in the economic dialogue, but the trade imbalance will
become a key theme of the talks, the Asahi newspaper said on
Thursday, citing unnamed sources for its information.
Washington's demand, made last week, did not specify any trade
areas for discussion, but a U.S. government source said the
Trump administration mainly wants to discuss cars and
agriculture, the paper said.
Japanese government officials concede that such thorny trade
issues may eventually be discussed in the dialogue, but stress
that next week's first round of talks would be mostly spent
agreeing on a broad list of agendas.
"We need to agree on a viable agenda for the dialogue and to
some extent, a reasonable timeframe for follow-up. That is the
starting point of dialogue. Tangible results should come later,"
said one government source, at the same time acknowledging that
Trump could be in more of a hurry for tangible results.
(Additional reporting by Tokyo policy team, Writing by William
Mallard and Leika Kihara; Editing by James Dalgleish and Sam
Holmes)
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