Japan Press Weekly

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2017 April 19 - 25 [ECONOMY]

Economic dialogue with Trump-led US would impose heavier burdens on Japan

Japanese Deputy Prime Minister and Finance Minister Aso Taro and U.S. Vice President Mike Pence on April 18 held the first round of an economic dialogue in Tokyo. The launch of the talks was agreed by the two countries’ leaders at their meeting in February. The talks will focus on three themes: a common strategy regarding trade and investment rules and other issues; cooperation in economic and structural policies; and sectoral cooperation.

In addition to the deputy ministerial economic dialogue, U.S. Secretary of Commerce Wilbur Ross who is also visiting Japan held individual talks with Aso and Economy Minister Seko Hiroshige.

U.S. President Trump is still struggling to form his Cabinet as shown in the delay in the Senate approval of Trump’s nominees for cabinet posts, including Robert Lighthizer to be the head of the U.S. Trade Representative (USTR). However, the president’s “America First” stance is reflected in the latest annual report on the nation’s trade policy agenda.

Focus on bilateral negotiations

The annual report refers to the guiding principle underlying the Trump administration’s trade policy which is: to increase U.S. economic growth; promote job creation in the United States; promote reciprocity with America’s trading partners; strengthen the nation’s manufacturing base and ability to defend America’s interests; and expand exports of agricultural goods and services.

The report stresses that these goals will be achieved by “focusing on bilateral negotiations rather than multilateral negotiations.” It states that the U.S. will begin renegotiating and revising trade agreements when its goals are not being met. In the report, the Trump administration proclaims that it will resist “efforts by other countries – or members of international bodies like the World Trade Organization (WTO) – to advance interpretations that would weaken the rights and benefits of, or increase the obligations under, the various trade agreements to which the United States is a party.” This represents the Trump administration’s recognition that past trade agreements have created disadvantages for the nation.

The annual report also emphasizes the need to “encourage other countries to open their markets to U.S. exports of goods and services” and to “negotiate new and better trade deals with countries in key markets around the world”. These priorities show President Trump’s stance to push ahead with his policy putting U.S. interests above international consensus.

Trump links US economic interests with security policy

It is expected that the Trump administration will link U.S. economic interests more closely with its security policy in trade negotiations. The Mizuho Research Institute’s analysis report issued in January pointed out that Trump’s trade policy is seeking a return to a “power-oriented order”.

Since the presidential campaign, Trump had claimed that he will designate China as a currency manipulator. The U.S. Department of the Treasury, however, did not do so in its biannual exchange report released in mid-March. President Trump tweeted on April 16, “Why would I call China a currency manipulator when they are working with us on the North Korean problem?” As the strongest military power in the world, the Trump administration is bargaining on both the economic and security fronts. Trump went on to tweet on the same day, “Our military is building and is rapidly becoming stronger than ever before. Frankly, we have no choice!”

Japan’s successive governments have made many concessions in bilateral trade negotiations with the United States. The Abe government, which had willingly surrendered economic sovereignty in the TPP talks, has no stance to protect the people’s interests in this economic dialogue. Japan is now facing a growing risk that it will shoulder heavier economic burdens through a new framework for the U.S. to interfere in Japan’s internal affairs.

Past related article:
> New framework for bilateral talks will pave way for US interference in Japanese economy [February 14, 2017]