In the first round of bilateral trade talks between Japan and the United States, under a framework agreed on by Prime Minister Shinzo Abe and President Donald Trump last September, the two sides agreed to expedite negotiations on reducing tariffs on agricultural and industrial products — and to negotiate over digital trade, including e-commerce and music distribution services. While Tokyo reportedly hoped to limit the scope of the talks to trade in goods, the participants in the meeting in Washington this week did not appear to have narrowed down the subjects of future talks. U.S. Trade Representative Robert Lighthizer cited the "very large" U.S. trade deficit with Japan, an indication that Washington will be placing greater pressure on Tokyo to take concrete steps in the coming negotiations.
With its "America First" protectionist agenda, the Trump administration, which pulled out of the Trans-Pacific Partnership free trade pact among its first decisions in office, has sought bilateral negotiations with its trading partners under the threat of punitive tariffs in an effort to conclude trade agreements under favorable terms for U.S. interests. Although Japan earlier was hesitant about the idea of a free trade accord with the U.S. because of its priority on multilateral free trade regimes, the government agreed to the bilateral talks, saying they would negotiate an agreement for trade in goods, not a comprehensive FTA — which Washington later said it would be pursuing with Tokyo. The two sides plan to meet again ahead of a summit between Abe and Trump later this month.
The Trump administration, bent on winning tangible results to show his supporters as the president campaigns for re-election in 2020, is expected to press Japan to take concrete steps to reduce its trade surplus with the U.S. — which at $67.6 billion was the fourth-largest for U.S. trade partners last year after those of China, Mexico and Germany. Although Lighthizer and economy revitalization minister Toshimitsu Motegi are not believed to have gone into details on the matter, Treasury Secretary Steven Mnuchin, speaking prior to the talks, pushed for the inclusion of a currency provision that prohibits a nation from intentionally guiding its currency lower.