National / Politics

Trump 'frustrated' with lack of Japan trade deal, Ambassador William Hagerty says

by Sayuri Daimon and Reiji Yoshida

Staff Writers

U.S. President Donald Trump is “frustrated” by the fact that the U.S. and Japan have yet to ink a trade deal, which was reflected in his recent mention of August as a desirable deadline, the U.S. top envoy to Japan has said.

“The president would have preferred to have seen something done last year. Let me be clear … we’re way behind schedule from his standpoint,” U.S. Ambassador to Japan William Hagerty said in an exclusive interview with The Japan Times on Tuesday.

Tokyo and Washington kicked off an economic dialogue between U.S. Vice President Mike Pence and Deputy Prime Minister Taro Aso in April 2017 soon after Trump was sworn in. Negotiations on a possible free trade pact kicked off in April.

“So when the president asked to see something as soon as August, he’s expressing his frustration” because the two countries started working on trade issues more than two years ago, he said.

Hagerty’s remark came as global attention is pinned on the intensifying tariff war between the U.S. and China, which has triggered concern among Japanese political and business leaders that Tokyo might be next if Trump settles his trade disputes with Beijing. Trump wants Japan to further open its sensitive auto and farm sectors.

“The bottom line is that the president is seeking reciprocity. The U.S. is the most open market” among the world’s major economies, Hagerty said. But “Japan is not as open as the United States and Japan has enjoyed a persistent trade surplus with the United States.”

The ambassador, who began his professional career at global management consultancy Boston Consulting Group, including a three-year stint in Tokyo from 1988, was mum about the prospects for a bilateral deal, saying it is up to U.S. trade representative Robert Lighthizer and Japanese counterpart Toshimitsu Motegi, who have held intensive talks in recent months.

Japan reluctantly launched bilateral trade talks after the Trump administration pulled the U.S. out of the Trans-Pacific Partnership agreement in January 2017. Both were among the 12 nations that signed the free trade pact.

Later, Japan and the remaining 10 countries concluded a revised TPP dubbed the TPP-11.

A separate economic partnership agreement that Japan formed with the European Union then took force in February.

With those pacts, Japan lowered tariffs on pork and beef imports from the EU and Australia, which put American farmers at a disadvantage in the Japanese market.

However, Hagerty, who served as director of Trump’s transition team, defended the decision, claiming the TPP had already lost political support in the U.S.

Trump “did a great favor to the other nations by withdrawing” because otherwise the pact “would still be languishing in the U.S. Congress and there would be no TPP-11,” Hagerty said.

At the same time, Hagerty said the U.S. is trying to create a level playing field for U.S. farmers to compete with other countries.

Commenting on the tariff war with China, the ambassador emphasized that Trump is trying to change China’s behavior, which he said was characterized by unfair trading practices.

“The situation with China is far more than an unbalanced trade deficit. It has to do with forced technology transfer, intellectual property theft (and) the use of state-owned enterprises to compete unfairly in damaged and destroyed marketplaces,” he said.

If Trump succeeds, it will benefit many other countries, including Japan, Hagerty said.

The U.S. is reportedly trying to arrange a summit meeting between Trump and Chinese President Xi Jinping on the sidelines of the G20 summit in Osaka at the end of the month.

Aside from trade talks, however, Hagerty was generally upbeat about U.S.-Japan ties, saying they have been greatly strengthened by Trump and Abe, particularly the defense aspect.

“Japan and America have stood lockstep addressing threats in this region, and will continue to do so. We have increased the interoperability of our military forces, we’re going to see increased capital investment between our two nations.

“I want to see that increase in both directions. We have a terrific partnership and the free and open Indo-Pacific,” he said.

However, media outlets have pointed out that there might be a perception gap between Trump and Abe in dealing with North Korea’s firing of short-range ballistic missiles last month.

While Abe criticized the act as a violation of U.N. Security Council resolutions, Trump disagreed during a joint news conference with him on May 27 in Tokyo. “I view it differently,” Trump said.

Asked about this gap, Hagerty only said President Trump is committed to their shared goal of removing all weapons of mass destruction and ballistic missiles.”I would encourage you not to focus on whether there is a gap in the views of a specific incident, but to encourage you to focus on the fact that the president remains focused on the bigger goal,” he said.

Trump is trying to create an environment conducive to getting the solution he wants, he added.

Hagerty also stressed that Trump cares about resolving the abduction issue, a topic he has brought up in his past two meetings with North Korean leader Kim Jong Un.

The president has met twice with the families of the 17 officially listed victims, who were abducted by North Korean agents back in the 1970s and ’80s. Five were returned to Japan in 2002, but attempts to find out what happened to the rest have proved fruitless.

“When the president described the story of Ms. Yokota at the U.N. General Assembly in 2017, he told the world about the plight of the abductees. So this is an issue he cares about. He cares about it for the sake of the Japanese people, and he wants to be helpful to Prime Minister Abe in opening the door,” he said.

Touching on the Trump-Kim summit in Hanoi in February, Hagerty argued it was “not a failure, as some have portrayed it,” but an opportunity to make crystal clear to Kim himself what the president expects.

Though there have been two summits so far, Pyongyang has taken no concrete actions toward dismantling its nuclear weapon and missile programs. Speculation is growing a third summit is in the works.

“They may be taking some time to regroup, to consider their options and determine how best to proceed with us. … And one thing that I should emphasize is that the door remains open for (North) Korea. To use the American basketball terminology, the ball is in their court,” Hagerty said.

Trump also “did a good job of painting a picture of what a brighter future might look like for North Korea,” the ambassador added, referring to Washington’s message to Kim that the U.S. and other countries are ready to help the isolated country achieve economic development if it renounces its nuclear and missile programs.

“Frankly, I think Japan could play a very significant role in creating a brighter future for North Korea because of the economic development opportunities that exist,” the ambassador said. “Japan is very good at economic development. North Korea is in need of economic development.”

Asked what he wants to achieve as ambassador, Hagerty said: “I certainly want to leave the relationship even stronger than I found it.”

He and his teams hope that “we can continue to add to this positive relationship,” the ambassador said.

“With opportunities like the Olympics coming along with cooperation in space, there are so many things that we can do together that will leave me very proud of what we’ve done.”