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International relations

Under pressure for win, Trump sought swift Japan trade deal

Abe promises to deliver by US elections, but has own calendar calculations

U.S. President Donald Trump welcomes Japanese Prime Minister Shinzo Abe at the White House on Friday. Abe told Trump a trade deal would be reached before next year's U.S. election.   © Reuters

WASHINGTON -- In the days leading up to Friday's White House meeting between U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe, American officials were told to push the Japanese side for a trade agreement they could announce immediately, Nikkei has learned.

"Can we announce something this time around?" U.S. Trade Representative Robert Lighthizer asked Japan's chief trade negotiator Economic and Fiscal Policy Minister Toshimitsu Motegi in mid-April, Japanese government sources said. It was believed to be a direct request from Trump.

Tokyo understood that the president was looking for a clear achievement in trade negotiations ahead of the U.S. presidential election cycle that kicks into full force early next year. As trade talks with China take longer than expected, and negotiations with the EU yet to start, Japan was a low-hanging fruit for a president who campaigned on a promise of reducing trade imbalances.

Upon hearing that Trump was keen to accelerate talks on trade, Abe went silent, thinking about his options, the sources said. His friendship with Trump has been the starting point of formulating Japan's policies toward North Korea and China. Abe wanted to avoid trade issues hurting the personal relationship he has been nurturing with the American leader.

But Abe has his own political considerations at home. Elections for the upper house of Japan's national legislature, the Diet, will be held around July and the prime minister wants to avoid announcing specific tariff cuts on agricultural imports before the polls. The farm vote has always been a reliable stronghold of Abe's Liberal Democratic Party.

At Friday's summit with Trump, Abe promised to cooperate in pursuing a quick agreement on trade, which may come soon after the summer elections.

President Trump waves as he heads to a round of golf with Prime Minister Abe in the suburbs of Washington on Saturday.    © Kyodo

Abe is expected to visit the U.S. when he attends the U.N. General Assembly in September. A U.S.-Japan summit on that trip may be the venue to sign a trade deal, which would be a quick conclusion considering negotiations only started this month.

After initially agreeing to bilateral trade talks last September, the U.S. and Japan had been unable to kick start official dialogue as Washington was mired in trade negotiations with China.

"The U.S. has already entered its election season as it prepares for the 2020 presidential race," Ichiro Fujisaki, Tokyo's former ambassador to the U.S., told Nikkei. "There is significant concern among the U.S. agriculture industry that its market share in Japan will be taken by Australia, which faces lower tariffs on farm product exports thanks to the Trans Pacific Partnership."

Under the TPP, Japan's tariffs on beef imports are scheduled to fall from the current 38.5% to 9.5% over 16 years, and levies on many vegetables and wine are also slated to go down.

"The White House is scrambling for results, and there is a chance that it will try to reach a deal by only prioritizing areas like agriculture," Fujisaki said.

At Friday's meeting with Abe, Trump made it clear he wanted a win for U.S. farmers. 

"We'll be discussing, very strongly, agriculture. Because, as the prime minister knows, Japan puts very massive tariffs on agriculture," Trump said. "We don't want trading terms with Japan that are less favorable than other countries."

To bide time until the Japanese upper house election in the summer is finished, Abe and his aides decided to throw Trump a bone at this summit by showing off Japan's investment in the U.S. since he came to power.

"Since President Trump took office, the Japanese business community has additionally announced a total of $23 billion investment to the United States, which will create 43,000 jobs in the United States," Abe said at the top of Friday's meeting, displaying the achievements on a one-sheet panel.

"Japan is ranked number one for its investment to the United States, as well as the number of jobs it creates in the United States," he said.

On the panel were six examples of fresh investment, including Toyota Motor's plans to boost production at plants in Kentucky and West Virginia, and auto parts supplier Aisin Seiki's new plant in the southern U.S. The prime minister's office had been in close coordination with Japanese companies to prepare the list.

"I appreciate it," Trump said with a nod of approval after listening to the prime minister.

The investments were heading to areas which may benefit Trump in 2020; the "red" states of Michigan, West Virginia, Tennessee and Indiana, as well as key "swing states" such as Ohio and Pennsylvania that Trump won in 2016.

After a 45-minute, one-on-one summit with just interpreters present, Abe and Trump had another hour of talks with Deputy Prime Minister Taro Aso and Secretary of State Mike Pompeo at their sides.

Abe assured Trump at both meetings that a trade deal would be made before the U.S. presidential election. "Don't worry. I will make it happen," Abe told the president, the sources said.

Trump promised Abe he would attend the Group of 20 summit being held in Osaka in June.

After the day was over, Abe came to his aides with a look of relief on his face. "Today went well," he said, as he left to attend First Lady Melania Trump's birthday dinner celebration.

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