Japan-US dialogue seen sticking to basics for now
Uncertainty over Washington's approach leaves Tokyo on guard
TOKYO -- The first round of a U.S.-Japan economic dialogue launching here Tuesday is expected to focus on building a framework for future discussion, with details left to wait until Washington has established a sufficient footing.
The dialogue, set up at a February summit, is to cover three main areas: economic policy, cooperation on infrastructure investment and energy, and trade and investment rules. Japanese Finance Minister and Deputy Prime Minister Taro Aso and U.S. Vice President Mike Pence will be the only cabinet-level officials present, though senior officials from Japan's finance, foreign affairs, economy and industry, and infrastructure ministries will also attend. The two sides are likely to issue a joint statement afterward.
This first meeting is expected to involve drawing up a list of topics within the three broad areas for detailed discussion later. Tokyo initially sought more-concrete agreements, but the Trump administration's slow progress on filling relevant posts makes this unlikely. There has been uncertainty over the lineup of U.S. officials at the talks -- Kenneth Juster, a deputy assistant to the president who was slated to attend to support Pence, was taken off the list.
Observers are watching to see how Aso and Pence will steer the discussion. Key topics will include macroeconomic policy, financial regulation and tackling tax avoidance. U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe agreed at their summit to leave discussion of foreign exchange policy -- a topic of great interest to markets -- to their finance ministers. But Trump recently complained about the dollar "getting too strong," and Pence could broach the subject as well.
Trade is another concern on the Japanese side. U.S. Commerce Secretary Wilbur Ross will meet with Japanese Economy, Trade and Industry Minister Hiroshige Seko on Tuesday morning before the formal dialogue opens. Tokyo hopes to expand bilateral cooperation via accords in such areas as energy and cybersecurity.
But the ministry does not know what to expect from Washington. Trump signed an executive order last month to get the ball rolling on reducing trade deficits, and Ross may take a cue from this and make concrete demands at the talks.
The secretary said late last month that Washington will undertake detailed surveys of trade deficits with trading partners, singling out Japan and others by name. Though Tokyo does not expect Washington to bring up specific measures such as tariffs or promoting Japanese imports of American cars, the lack of advance preparation makes it difficult to say for certain.
The Japanese side plans to avoid jumping into direct discussion of a bilateral free trade agreement, concerned about potential U.S. pressure to open up agricultural and other markets. Trade issues are not limited to tariffs, but encompass a wide array of topics, including intellectual property, government procurement and e-commerce, a senior Finance Ministry official said.
The meeting between Seko and Ross could cover the planned sale of Toshiba's memory business. The two may also discuss Toshiba's U.S. nuclear subsidiary Westinghouse Electric, which has filed for Chapter 11 bankruptcy protection.