Business

Japan has no plan to discuss foreign exchange in U.S. trade talks

Kyodo

The minister in charge of trade talks with the United States said Sunday that Japan has no intention of discussing measures to prevent competitive currency devaluations.

“There were no talks on foreign exchange in the joint statement and during the Japan-U.S. summit (in September),” Japan’s economic revitalization minister Toshimitsu Motegi said during a TV program, referring to the agreement between the two countries to begin negotiations for a bilateral trade agreement.

His comments come after U.S. Treasury Secretary Steven Mnuchin said Saturday that Washington is seeking to include an agreement to prevent competitive currency devaluations in any trade deal with Japan.

Motegi said during the NHK TV program that he believes foreign exchange has not been raised as an issue between the two countries and Mnuchin should be able to have “close communication” with Japan’s Finance Minister Taro Aso whenever necessary.

The two finance chiefs may hold discussions on foreign exchange in the future, he added.

Motegi was in negotiations on a trade deal with his American counterpart, U.S. Trade Representative Robert Lighthizer, in New York last month.

Following their meeting, U.S. President Donald Trump and Prime Minister Shinzo Abe agreed to start talks for a trade agreement on goods. The move was a concession by Tokyo, which dropped its earlier insistence on a multilateral approach to trade issues.

Mnuchin told reporters in Bali, Indonesia, on the sidelines of a meeting of the International Monetary Fund, that including a clause against currency devaluation “would be one of the issues we discuss. … Our objective is to incorporate this language into future trade agreements.”

The United States pushed to include such a clause in the renegotiated North American Free Trade Agreement involving Canada and Mexico as well as a recently revised free trade deal with South Korea. The moves are part of Trump’s drive to reduce his country’s more than $700 billion trade deficit.

The inclusion will probably be a major point of contention in the trade talks when Tokyo and Washington likely meet in the first half of next year, given that Japan resisted the addition of a similar clause to the 11-member Trans Pacific Partnership free trade deal.

Japan and the United States also have different understandings of the scale of the trade negotiations. Earlier in the month, U.S. Vice President Mike Pence described the trade deal with Japan as a “free trade agreement,” while the Japanese government says the bilateral accord will not be as comprehensive as an FTA.

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