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US tells Japan it wants to start FTA talks

'Strong interest' indicated for first time, Pence, Aso also discuss North Korea

Japanese Deputy Prime Minister Taro Aso, left, and U.S. Vice President Mike Pence (Pool via Kyodo)

WASHINGTON -- The U.S. has for the first time told Japan it has a "strong interest" in starting talks over a potential free trade agreement between the two countries.

A Japanese government official said that the U.S. side had touched upon the issue of an FTA during the second round of economic dialogue between U.S. Vice President Mike Pence and Japan's Deputy Prime Minister Taro Aso on Monday.

The subject was not discussed during the first round of talks in Tokyo in April, nor has it been broached in meetings between Japanese Prime Minister Shinzo Abe and U.S. President Donald Trump, making this the first official request to open negotiations.

The Trump administration has made no secret of the fact it regards the trade deficit as a problem -- it stands at around $70 billion a year -- and has been calling for a solution through bilateral talks.

Tokyo remains cautious as Japan would be expected to open up its agriculture and livestock sector under an FTA. A high-ranking official from the country's Ministry of Foreign Affairs said on Monday that it would "not enter negotiations immediately."

Trump is scheduled to visit Japan for the first time as president in early November, when the matter will likely be on the agenda.

The talks between Pence and Aso, which lasted just under two hours, were in part aimed at laying the groundwork for the visit. Treasury Secretary Steven Mnuchin, Secretary of Commerce Wilbur Ross, and U.S. Trade Representative Robert Lighthizer were also in attendance.

According to a joint news release, Japan agreed to relax inspection procedures for imported cars, one of the biggest factors behind the trade deficit.

The two countries also signed a memorandum of understanding to cooperate on intelligent transportation systems and infrastructure development -- which Trump has touted as a key economic growth strategy -- and to strengthen collaboration in the field of energy, such as by expanding of the supply of U.S. liquefied natural gas.

The U.S. had also been pushing for a review of Japan's emergency import restrictions on U.S. frozen beef, but no decision was made this time.

On the agricultural front, the Japanese side had already lifted import restrictions on Idaho potatoes in September, and the U.S. on Japanese persimmons. Both governments concluded that "some progress has been made on bilateral trade" in recent months.

Pence and Aso also spoke about their governments' stance on strengthening cooperation in dealing with the threat posed by North Korea's nuclear and missile program.

"The United States ... will continue to bring the full range of American power to bear on the regime in Pyongyang as we hope to achieve through diplomatic and economic means a peaceable solution and the achievement of the long-sought goal of a nuclear-free Korean Peninsula," Pence said. His counterpart described North Korea as "an immediate threat" and that the importance of the U.S.-Japan alliance "had increased."

Aso also discussed the North Korean issue with Mnuchin on the sidelines of the talks, and both agreed to cooperate in imposing sanctions on Pyongyang.

The U.S. proposal for FTA talks comes at a difficult time for Japan, as it grapples with the threat posed by the Kim regime. Japan depends heavily on the U.S. for defense, and Washington may seek to use the situation as a bargaining chip to draw concessions from Tokyo with regard to a potential trade agreement.

Nikkei staff writer Shotaro Tani in Tokyo contributed to this report.

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