By Leika Kihara
WASHINGTON (Reuters) – Japan conceded it was at logger-heads with Washington on whether the United States should rejoin the multilateral trans-pacific trade pact, as President Donald Trump’s preference for a bilateral deal has created a ‘gap’ in view points.
In a meeting with his U.S. counterpart Steve Mnuchin on Friday, Japanese Finance Minister Taro Aso said he conveyed his concern over protectionism and urged Washington to exempt Japanese steel and aluminum goods from U.S. import tariffs.
Japan wants Trump to reconsider his decision to pull the United States out of the multilateral Trans-Pacific Partnership (TPP) deal, though it was mindful the president did not prefer such multilateral deals, Aso said.
“It’s clear there’s a gap in view,” Aso told reporters after the G20 meeting of finance leaders. “That will be discussed in various forms under a new framework” focusing on trade, he said.
The United States shouldn’t merely consider the bilateral trade balance but take into account inflow of funds from Japan’s huge investment to the country, Aso added.
The rift between the United States and one of its closest allies underscore the repercussion Trump’s protectionist trade policies is having on the global community. The International Monetary Fund warned that protectionism could hurt an otherwise robust global economy.
Aso said he and Mnuchin discussed currencies but only as part of talks on the global economy.
In a summit earlier this week, Trump reaffirmed his desire to address trade imbalances with Japan through a bilateral trade deal, while Japanese Prime Minister Shinzo Abe repeated his call for the United States to rejoin TPP. The two leaders agreed to form a new framework focusing on trade talks to iron out differences.
Trump withdrew from the TPP deal three days after his inauguration in January 2017, a move he said was aimed at protecting U.S. jobs.
“Japan hopes the new framework would help bring the United States back to TPP, though the United States might be thinking otherwise,” said a senior Japanese finance ministry official with knowledge of the negotiations.
While stressing that TPP was Japan’s top priority, the official said Tokyo won’t persist on what framework the talks will take as long as the outcome is mutually beneficial.
“Whether it’s TPP or a free trade agreement (FTA), you need to negotiate similar issues,” the official said. “What’s important is what you want to achieve, be it TPP or FTA.”
Japan has long upheld a multilateral framework as its export-reliant economy has benefited greatly from global free trade. This approach helps Japan diffuse direct pressure from countries like the United States to open up its politically sensitive markets, such as agriculture, analysts say.
Trump last month imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports. Japan is the only major U.S. ally that did not receive exemptions from the tariffs.
Japan has no immediate plan to raise a trade dispute against U.S. steel and aluminum tariffs to the World Trade Organization, though such a move was among options that could come under consideration in the future, the official said.
“For now, Japan will seek to gain the understanding of the United States that its steel exports don’t threaten U.S. national security,” the official told reporters.
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Source: Investing.com
