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Aso and Pence seek common ground on trade while jointly condemning Pyongyang

by

Kyodo

Deputy Prime Minister Taro Aso and U.S. Vice President Mike Pence remained at odds Monday over U.S. calls to start bilateral free trade talks but made progress on automobile and farm trade between the world’s biggest and third-largest economies.

During the second round of the high-level economic dialogue in Washington, Aso and Pence agreed that Japan will “streamline noise and emissions testing procedures for U.S. automobile exports,” the two governments said in a joint news release.

They also welcomed the recent lifting of restrictions by the United States on Japanese persimmons and by Japan on U.S. potatoes from Idaho, the document said.

On the security front, Aso and Pence affirmed close bilateral coordination in curbing North Korea’s development of nuclear weapons and ballistic missiles, with Aso saying North Korea is posing a “grave and imminent threat” to security in Asia and beyond.

“We would like to continue constructive discussions so as to further deepen the Japan-U.S. economic relationship that is extremely important also in strategic terms, as the security environment in the Asia-Pacific region has become increasingly severe,” Aso told journalists after the meeting.

The meeting, which followed the inaugural session in April in Tokyo, was designed to lay the groundwork for President Donald Trump’s trip to Japan and four other Asian countries in November.

Pence expressed Washington’s “strong interest” in commencing talks for a Japan-U.S. free trade agreement and stressed the need to reduce the U.S. goods trade deficit with Japan and other surplus-generating countries, according to a Japanese official who briefed reporters about the meeting.

A bilateral FTA would cover nearly 30 percent of the world economy.

At the outset of the meeting, which was open to the media, Pence referred to “a common strategy on trade and investment rules and issues to ensure a free and fair trading relationship between our two nations,” a principle he said is “important to President Trump.”

The Trump administration believes it can obtain the best outcomes in bilateral frameworks and sees economic relations with Japan as increasingly important, especially after Trump pulled the U.S. out of the Trans-Pacific Partnership trade deal soon after his inauguration in January.

Aso expressed a desire to take the bilateral ties to “new heights” but stressed the significance of the TPP, the Japanese official said.

While Tokyo is moving ahead with talks for a so-called TPP-11 with the 11 remaining countries in the deal, Japanese officials have expressed hope that the United States will come back to the TPP in the belief that it is the best framework for Tokyo and Washington.

The TPP is a regional FTA championed by Trump’s predecessor, Barack Obama. The pact was signed in February 2016 by the member states including Australia, Canada, Malaysia, Mexico, Singapore and Vietnam, but has yet to come into force.

Aso and Pence were also apart over Washington’s concern about Tokyo’s imposition in August of emergency tariffs on frozen beef from the U.S. and other countries, but they agreed to continue talks on the matter, according to the Japanese official.

In line with World Trade Organization rules, Japan invoked the so-called safeguard tariffs in response to a surge in beef imports in the April-June quarter, raising the tariff rate on beef to 50 percent from 38.5 percent for the period from Aug. 1 to March 31.

The measure does not affect Australia, a major beef exporter that has an FTA with Japan.

The National Cattlemen’s Beef Association, the marketing organization and trade association for 1 million cattle farmers and ranchers in the United States, urged the two governments to “find a meaningful alternative to the punitive 50 percent beef tariff that hurts U.S. beef producers and Japanese consumers.”

“We hope that the result of these talks will do more than patch a leaky boat,” Kent Bacus, NCBA’s director of international trade and market access, said after the Aso-Pence meeting.

“Establishing robust, long-term competitive market access to Japan is the No. 1 priority for the U.S. beef industry and we strongly encourage the Trump administration to take the same approach before we lose ground in our top export market,” Bacus said.

U.S. exports of beef and beef products to Japan totaled $1.5 billion in 2016, making it the United States’ top market, according to the Agriculture Department.

On North Korea, Pence said the U.S. will continue to work with Japan and other allies and partners to “further isolate the Kim regime,” referring to North Korean leader Kim Jong Un.

“To be clear, the United States of America will continue to bring the full range of American power to bear on the regime in Pyongyang, as we hope to achieve, through diplomatic and economic means, a peaceable solution and the achievement of the long-sought goal of a nuclear-free Korean Peninsula,” Pence said.

He thanked Aso for attending the meeting “especially in the midst of an election in Japan,” in reference to Sunday’s general election. The remark prompted laughter from Aso, who is running in the contest.

Aso, who arrived in the U.S. capital Monday for a two-day visit, had separate talks with Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross and Gary Cohn, director of the White House National Economic Council.