Business / Economy

Japan and U.S. at odds over auto and farm tariffs, but quotas not raised during talks

Kyodo, JIJI

Japan and the United States on Tuesday remained at odds over tariff cuts on automobiles and agricultural products as part of a bilateral trade deal, according to a Japanese official.

The United States did not refer to quotas restraining Japanese auto exports to the country, the official told reporters after a meeting in Washington.

Officials from the two governments met to lay the groundwork for a meeting between Prime Minister Shinzo Abe and U.S. President Donald Trump next Monday in Tokyo.

Bilateral trade and policy toward North Korea are likely to top the agenda at the summit, which is part of Trump’s four-day state visit to Japan starting Saturday.

At Tuesday’s meeting, the United States pushed Japan to cut tariffs on American farm products as early as possible, the official said.

The Japanese side expressed its position of limiting any market liberalization steps to those in line with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership pact, and claimed that it would take time to draw up a trade agreement that covers all of Japan’s some 9,000 trade items.

“Both sides can’t reach any agreement that is unlikely to gain understanding at home,” senior Japanese trade official Kazuhisa Shibuya told reporters following the working-level session.

American farmers and ranchers are demanding the administration level the playing field because they have started losing market share in Japan following the recent commencement of the revised TPP — an 11-member free trade agreement including Japan and farming nations such as Australia and Canada — and an FTA between Japan and the European Union.

Trump withdrew the United States from the original TPP in 2017, given his preference for bilateral trade deals.

On Tuesday, Tokyo said it would slash duties on U.S. farm products to TPP levels on the condition that Washington remove tariffs on all industrial goods, including a 2.5 percent tariff on Japanese cars. But the U.S. side showed its reluctance to accept the request on automotive tariffs, according to informed sources.

Japan levies no tax on imported vehicles.

The Japanese official quoted Deputy U.S. Trade Representative Jeff Gerrish, who attended the meeting, as saying the two sides see a considerable gap in their views, but that it was meaningful to understand each other’s positions.

The two sides did not discuss a six-month window Trump set last week to negotiate with Japan, the European Union and other U.S. trading partners to address what the administration called “the threatened impairment of national security” over automobile and vehicle parts imports, according to the official.

Economic revitalization minister Toshimitsu Motegi and U.S. Trade Representative Robert Lighthizer plan to meet or speak by phone ahead of the summit, the official said.

In a meeting last month, Abe and Trump agreed to aim for a swift conclusion to negotiations for a bilateral trade pact. Motegi and Lighthizer launched the talks in April.

The Trump administration regards the deal as a tool to reduce the U.S. trade deficit with Japan.