Washington –

Former U.S. Ambassador to Japan William Hagerty has sounded an optimistic note about the course of the ongoing tariff negotiations between the two countries.

"The odds are high that the U.S. and Japan can come to an agreement," he said in an interview.

"I know from experience that it is possible for us to obtain agreement," Hagerty said, noting that the two countries have concluded two very important trade deals — one focusing on agricultural goods and the other on digital trade with a very important strategic component.

He also said it is possible to reach an agreement despite "domestic political challenges" such as Sunday's election for Japan's House of Councilors, the upper chamber of parliament.

"Japan has no stronger economic ally and national security ally than the United States," Hagerty said, calling on Japan to "take this opportunity," particularly in light of the persistent U.S. trade deficit with the country.

In the bilateral negotiations, Japan is calling on the administration of U.S. President Donald Trump to review its high tariff policy. But no major progress has been made.

The Trump administration has extended until Aug. 1 the pause on an add-on portion of the so-called reciprocal tariffs, which was originally set to expire Wednesday last week.

Hagerty, a Republican senator, served as ambassador to Japan under Trump's first administration.

In the interview, Hagerty indicated that Japan needs to increase its defense spending in view of the nations around it — China, North Korea and Russia — adding that tensions are rising in the Taiwan Strait.

Japan's defense expenditure should be "oriented toward the highest possible interoperability" with the United States, Hagerty said, citing a need to put the two nations in the same systems.

Japan's purchases of defense equipment from the U.S. are helpful in this regard, Hagerty said.

He added, however, "This should be more than a procurement exercise."

The United States and Japan should conduct more joint exercises and look at ways to exchange technologies between them and with other like-minded nations so that they can expand defense spending while strengthening the defense posture in the entire region, he said.

If Japan increases its defense spending to a level equivalent to 3% of its gross domestic product, that will be "well received," Hagerty said.

The former ambassador said that investments in areas like robotics and artificial intelligence are "an absolute necessity" for Japan, pointing out that the country needs to improve its productivity amid "challenging demographics," such as a drop in its workforce reflecting its aging population.

"The fastest way to do that" is through superior robotics and AI, he said. He indicated that the United States and Japan can work together "very closely" in related fields such as quantum computing.

On the subject of U.S.-Japan relations 80 years after the end of World War II, Hagerty stressed that the two countries should be a model for the rest of the world.

The United States "has continued to provide Japan with security protections," Hagerty said.

Meanwhile, Japan has continued to invest "much less" in the field of defense than the United States has and "much more" in the economy, he said, adding that Japan has become "a fully developed economy, and a very serious and respected leader on the world stage."

The two countries need and can benefit from each other, he said.

"I think at the very core, the U.S. and Japan should stand as an example of the strongest possible relationship that exists in the world today," Hagerty said.