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President Donald Trump looks toward Japanese Prime Minister Shinzo Abe during their joint news conference in the White House on Friday. (AP)

New economic talks to blend Trumponomics with Abenomics

Post TPP, leaders agree on pursuing rules-based trade and investment

WASHINGTON/TOKYO -- After blasting the Trans-Pacific Partnership on the campaign trail, and recently criticizing Japan for unfair trade practices, U.S. President Donald Trump has agreed with Japanese Prime Minister Shinzo Abe to begin new economic talks between the two countries at Friday's White House summit.

The duo agreed to establish a new framework for economic dialogue led by U.S. Vice President Mike Pence and Taro Aso, the Japanese deputy prime minister and finance minister, Abe said. Pence will be making an early visit to Tokyo to kick start the talks.

"The United States and Japan represent 30 percent of the world's GDP and share an interest in sustaining a strong global economy, ensuring financial stability, and growing job opportunities," the two leaders said in a joint statement released after the meeting.

Both leaders reaffirmed their commitment to the "three-pronged approach" of fiscal, monetary, and structural policies -- the three "arrows" of Abenomics -- to strengthen domestic and global economic demand, the statement said.

While the statement acknowledged that the U.S. had withdrawn from TPP, it hinted that the two governments will be pursuing the core pillars of that agreement, in not so many words.

"They remain fully committed to strengthening the economic relationships between their two countries and across the region, based on rules for free and fair trade. This will include setting high trade and investment standards, reducing market barriers, and enhancing opportunities for economic and job growth in the Asia-Pacific," the statement said.

Aso and Pence held a separate meeting at the White House the same day. "We will further deepen and develop the economic relationship between the two countries," Aso said afterward. Pence said he supported a high standard of rules on trade and investment, stressing the importance of establishing conditions for mutual economic growth.

The economic dialogue will include a framework on bilateral trade, as well as cooperation on fiscal and monetary policies. Both countries will discuss cooperation in various fields, including infrastructure, energy and cyberspace. Trump did not call for a free trade agreement between the two countries.

A Japanese official said: "Even as we continue to push U.S. toward the TPP, we will not dismiss bilateral talks. We will discuss what framework will be best."

During the meeting, Abe discussed the long history of U.S. investment and job creation by Japanese automotive companies. Trump, who had earlier complained that his country's auto trade with Japan was "not fair," welcomed the continued production of Japanese auto companies on U.S. soil.

Toyota Motor President Akio Toyoda welcomed the agreement on the economic dialogue, saying he is "very thankful" that the two governments have set up a space where "both sides could discuss mutual growth" while speaking to reporters on the sidelines of an event in Shizuoka Prefecture. Before his inauguration, Trump had blasted the automaker's plans for a new plant in Mexico.

In a joint press conference following the summit, Abe said a free and fair market based upon rules should be built in the Asia-Pacific region, with Japan and U.S. taking the lead. Trump said: "We will seek a trading relationship that is free, fair and reciprocal, benefiting both of our countries."

Sadayuki Sakakibara, chairman of the influential Keidanren business lobby, said the summit between Abe and Trump had fostered closer personal relationship, which is "highly significant for future Japan-U.S. relations."

Meanwhile, on exchange rates, the pair "agreed to continue the discussion through the Japanese and U.S. finance chiefs, who are experts on the matter," Abe said. Trump had previously accused Japan of purposely devaluing its currency to make its exports cheaper, unnerving currency markets.

In New York, the dollar briefly fell to 112.85 yen during the duo's news conference, after Trump said in reference to currency devaluation that both countries would soon be at a level playing field. But he did not offer new information about his approach to foreign exchange, and the greenback ended at 113.15-25 yen, largely unchanged from the previous trading day.

Security assurance

Abe and Trump had an unofficial meeting last November soon after the U.S. election, but this was their first formal summit at the White House. Aside from economic talks, both leaders reaffirmed a commitment to strengthen the U.S.-Japan security alliance.

"It is important that both Japan and the United States continue to invest very heavily in the alliance to build up our defense and our defensive capabilities," Trump said in the news conference.

"We have an unwavering bond," Abe said. "We shared our commitment to further strengthening our relationship."

During his campaign trail, Trump had accused Japan of freeloading on defense and said the country should pay more for its place under the U.S. security umbrella. During the joint press conference, however, Trump echoed the previous U.S. administration's stance on the alliance.

"The bond between our two nations, and the friendship between our two peoples, runs very, very deep. This administration is committed to bringing those ties even closer," Trump said. "We are committed to the security of Japan and all areas under its administrative control, and to further strengthening our very crucial alliance."

"The U.S.-Japan alliance is the cornerstone of peace and stability in the Pacific region," he added.

The duo reaffirmed that the Japan-controlled, China-claimed Senkaku Islands are protected under Article 5 of the Japan-U.S. security treaty, which requires the U.S. to help defend Japanese territory.

To strengthen the alliance, both countries will soon hold cabinet-level security talks, the so-called "2-plus-2" meetings of defense and foreign ministers.

Meanwhile, both leaders agreed that relocating the U.S. Marines' Futenma air base in Okinawa from the city of Ginowan to an area known as Henoko in the city of Nago was the best solution to the longstanding question of what to do with the controversial facility.

Abe and Trump reaffirmed their opposition to actions aimed at changing the status quo in national security, in an indirect reference to China's actions in the South China Sea. The two also agreed to demand that North Korea abandon its nuclear and missile development program. The countries will work together "to promote our shared interests," including the freedom "of navigation, and defending against the North Korean missile and nuclear threat," Trump said.

Trump's lack of experience in foreign affairs had been a cause for concern among Asian countries, but recent indications suggest he will hew toward the foreign policy of recent U.S. administrations in the region. Prior to his summit with Abe, Trump had a phone conversation with Chinese President Xi Jinping, and said the U.S. would honor the "one China" policy, which regards both mainland China and Taiwan as part of one China.

Golf time

Following the summit at the White House, Abe and Trump traveled to Palm Beach, Florida, on Air Force Once. Abe will stay for two nights at Trump's Mar-a-Lago estate, where he hopes to connect more personally with the new U.S. president through a round of golf.

"I am looking forward for a weekend in Florida with the president," Abe said in Washington. "My score in golf is not up to the level of the president at all, but my policy is never up, never in, always aiming for the cup -- never cut to just the goal with shortcuts and short chops."

Speaking ahead of the summit on an American radio show, Trump said: "That's the one thing about golf -- you get to know somebody better on a golf course than you will over lunch."

Quoting a senior White House official, U.S. media have reported that Trump is personally paying the bill for Abe's visit to his resort as a "personal gift." This will be the first time that Trump hosts a foreign leader at his resort since his inauguration.

Trump also accepted Abe's invitation to visit Japan later this year.

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