TOKYO -- Round one of a U.S.-Japan economic dialogue produced little of substance on cooperation in sectors such as infrastructure and energy, blunting a tool Tokyo hopes will fend off future attacks on the trade and currency fronts.
According to a joint statement issued after U.S. Vice President Mike Pence and Japanese Deputy Prime Minister Taro Aso met here Tuesday, the two sides "discussed specific sectors where improved commercial relations will promote mutual economic benefits and job creation in both countries." But there was apparently no substantive discussion on exactly how Japanese companies could contribute to American projects, for example.
President Donald Trump's administration continues to tout major infrastructure development plans, raising corporate Japan's hopes for new business opportunities. Tokyo, meanwhile, hopes to use economic cooperation to dispel demands Washington could make regarding currency policy or trade access.
Japan's transport ministry is indirectly supporting companies such as East Japan Railway and Central Japan Railway, which are looking to get in on proposed projects to build a magnetic-levitation rail line along America's eastern coast and high-speed trains in Texas and California. The topic of high-speed rail lines did come up, according to the Japanese side. But little came of the discussion.
Challenges to come
Trump's frequent complaints about the strong dollar have market players on alert for currency talks. But foreign exchange did not come up Tuesday. Trump and Prime Minister Shinzo Abe agreed earlier this year that finance chiefs would handle such discussions. Currency will likely be on the table when Aso, in his role as finance minister, meets with Treasury Secretary Steve Mnuchin in Washington on Thursday.
Despite Trump's campaign-trail promises to label China a currency manipulator, the Treasury Department did not do so in its semiannual currency policy report released Friday. This restraint was likely aimed at securing Beijing's cooperation on reining in North Korea -- a sign that currency policy will be used as a bargaining chip, to Japanese authorities' concern.
Japan had initially hoped to set a more detailed agenda on three pillars -- trade and investment, economic and structural policies, and industrial cooperation -- so that various government ministries and agencies could flesh out the fine points in working-level talks with Washington. But preparation proved challenging. Kenneth Juster, a deputy assistant to the president that Japan saw as a key figure in the talks, decided not to attend, for example. "We were able to get the dialogue off the ground," a Japanese government official said. "That's our biggest achievement this time."