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Japan wary of US demands for trade compromises, sees hope in US-EU concessions

U.S. President Donald Trump and European Commission president Jean-Claude Juncker leave the podiums after speaking about trade in the Rose Garden of the White House, Wednesday, July 25, 2018, in Washington. (AP Photo/Evan Vucci)

TOKYO -- Japanese government officials are wary that the United States may demand substantial compromises in bilateral trade talks, while expressing relief at recent concessions reached between the United States and Europe aimed at easing trade friction.

"It's good that there is growing momentum for negotiations," said a source close to the Japanese government, commenting on the U.S.-EU concessions. It had been feared that U.S. President Donald Trump could intensify his country's protectionist policies if U.S.-Europe trade talks had collapsed.

Still, fears cannot be dispelled that Tokyo may be drawn into bilateral negotiations with Washington and be pressured to make major compromises.

The Trump government has hinted at the possibility that the United States could curb imports of not only EU but also Japanese automobiles and car parts.

Japanese automobiles exported to the United States, worth approximately 4.6 trillion yen a year, account for nearly 40 percent of the country's total car exports. If the United States were to impose additional tariffs on Japanese cars and car parts, it would cost Japanese companies around 2 trillion yen, according to one estimate. The Japanese government has therefore sought to avert import curbs.

Japan and the EU signed an economic partnership agreement (EPA) on July 17. While striving to promote free trade, Tokyo and the EU released a joint statement expressing concern over the Trump administration's protectionist policies.

Meanwhile, the EU not only reached an agreement with the United States in trade talks at their latest summit but also complied with Washington's demand for an increase in soybean imports and other measures.

Tokyo and Washington are expected to hold new ministerial trade talks as early as August.

Japan aims to draw the United States back into the Trans-Pacific Partnership (TPP) free-trade pact. However, it appears the United States is attempting to draw conditions favorable to Washington from Tokyo at bilateral trade talks.

The start of U.S.-European trade talks has made it somewhat difficult for Tokyo to join hands with the EU to warn Washington against demanding substantial concessions from Tokyo. Moreover, expansion of imports of U.S. agricultural products could draw protests from within the ruling bloc in Japan, making it difficult for the government to compromise with Washington over the matter.

"I wonder whether we can strike a deal that can satisfy Mr. Trump," said a high-ranking official of the Japanese government.

(Japanese original by Daisuke Ando, Tokyo Business News Department)

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