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Economy

Tokyo looks to hash out US trade deal scope before May summit

Cars and agriculture emerge as points of contention

U.S. Trade Representative Robert Lighthizer, far right, spoke with Japan's trade-deal point man Toshimitsu Motegi, far left, in New York in September.
U.S. Trade Representative Robert Lighthizer, far right, spoke with Japan's trade-deal point man Toshimitsu Motegi, far left, in New York in September.   © Jiji

TOKYO -- Japan seeks to launch cabinet-level talks on a trade agreement with the U.S. this spring ahead of a bilateral summit in late May, aiming to define the scope of a deal with a focus on automobiles and agricultural goods.

The two sides are arranging meetings in the U.S. in April and May. U.S. Trade Representative Robert Lighthizer will determine the trade deal's range with Japan's point man, Economic and Fiscal Policy Minister Toshimitsu Motegi. Meetings initially set to start as early as last month have been delayed as Washington prioritizes trade negotiations with Beijing.

U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe had agreed at a September summit to hash out a trade agreement on goods. Tokyo aims to strike a proactive tone by scheduling talks ahead of Trump's late-May visit, when the two leaders are set to discuss trade as well as issues like the North Korean situation.

Cars are certain to be one of the topics discussed. The U.S. has threatened to impose auto tariffs on a number of trading partners, pressuring them to narrow their trade surpluses with Washington. On Sunday, the U.S. Commerce Department reported to Trump on the potential national security risks posed by imports of autos and their parts. Trump has 90 days to decide whether to raise tariffs as recommended by the report.

Japan "will not be hit with any additional tariffs," Motegi told reporters on Tuesday, citing an agreement at September's summit that duties would not be raised while negotiations were ongoing. Tokyo believes that by starting trade talks in the spring it can dodge tariffs for the time being. But there are concerns that Trump could play the tariff card nonetheless if Japan's approach fails to satisfy.

The two sides' September joint statement called for talks toward a deal on "goods, as well as on other key areas including services, that can produce early achievements." Tokyo envisions certain steps like simplifying customs procedures for service fields, but could find itself in a tight spot if the U.S. demands concessions such as changing drug-pricing methods or easing rules on financial services.

With regard to goods tariffs, agriculture will be a point of contention. If Washington asks that Japan lower duties on agricultural goods to levels laid out in the Trans-Pacific Partnership pact -- from which Trump withdrew the U.S. shortly after taking office -- Tokyo is prepared to demand in return that Washington abolish tariffs on industrial goods.

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