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Trade war

Corporate America wants cyber and IP rules in Japan pact

Industry prods trade envoy to set high standards as Tokyo looks to focus on tariffs

Japanese Prime Minister Shinzo Abe and U.S. President Donald Trump at the G20 summit in Argentina last month. The leaders agreed this fall to pursue a bilateral trade agreement.
Japanese Prime Minister Shinzo Abe and U.S. President Donald Trump meet at the recent G-20 summit in Argentina. They agreed this fall to pursue a bilateral trade agreement.   © Reuters

WASHINGTON/NEW YORK -- U.S. business groups lobbied their government on Monday to push for tough rules protecting intellectual property and e-commerce in coming trade talks with Japan, counter to Tokyo's wishes to focus on commerce in goods for a quick agreement.

The two countries should look beyond goods tariffs and forge a comprehensive pact to serve as a true gold standard, an executive at the U.S. Chamber of Commerce -- the country's biggest trade group -- said at a public hearing held by the Office of the U.S. Trade Representative. Specific demands included rules in fields from patents to investment.

The chairman of the American Chamber of Commerce in Japan, Christopher LaFleur, urged negotiators to create a model for elevating international standards, including rules on intellectual property and cybersecurity, in bilateral talks set to start as soon as January.

The industry groups' demands stem from concerns over China, with which President Donald Trump's administration is in escalating conflict. Corporate interests had pushed for intellectual-property rules to be included in the Japan- and U.S.-led talks on the Trans-Pacific Partnership trade pact, partly to provide a check on Beijing. But Trump pulled the U.S. out of the TPP shortly after taking office last year, and American business groups are looking to next year's bilateral trade talks to in effect rebuild those measures.

Tokyo, however, insists on calling the pact a trade agreement on goods and not a broader free trade agreement.

"We need to narrow down the fields under negotiation to produce results quickly and win President Trump's understanding," said a source affiliated with the Japanese government.

Broadening the scope to include setting standards could add flashpoints for confrontation, prolonging the talks.

For example, a representative from the Computer & Communications Industry Association said Japan saddles online shopping companies with liability for unforeseeable scenarios, impeding international e-commerce. The Pharmaceutical Research and Manufacturers of America said Japan lacks an effective mechanism for resolving patent disputes.

Concerns arose over business in the U.S. as well. Agricultural interests complained that they would be put at a competitive disadvantage due to America's absence from the revamped 11-member TPP, set to launch Dec. 30, and demanded an agreement be reached quickly.

The USTR, which has said it aims to advance negotiations gradually, is due to release a list of objectives for the talks as soon as this week. How it decides to prioritize different fields could greatly influence how the negotiations progress.

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