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Pence raises prospect of FTA as Japan, U.S. begin economic dialogue

TOKYO (Kyodo) -- Japan agreed with the United States on Tuesday to discuss a bilateral framework for trade and investment rules, as U.S. Vice President Mike Pence raised the prospect of a free trade agreement.

After the first round of a dialogue aimed at strengthening economic cooperation, the two countries said in a joint statement they will seek to achieve concrete results "in the near term," even as the hurdles could be high to resolve thorny issues in future talks.

President Donald Trump has pulled the United States out of the Trans-Pacific Partnership, a multilateral free trade agreement that his predecessor Barack Obama viewed as an integral part of his pivot to Asia policy.

The U.S. withdrawal from the TPP had raised concern among some Japanese officials, who are wary of a bilateral free trade agreement with the United States due to concern that Washington could push Tokyo to boost imports of U.S. cars and agricultural produce.

"The TPP is a thing of the past for the United States of America," said Pence, who chaired the meeting with Deputy Prime Minister Taro Aso.

"There may be a decision made between our nations to take what we have learned in this dialogue and commence formal negotiations for a free trade agreement, but I'll leave that to the future," Pence told a joint press conference.

A Japanese official acknowledged after the meeting that there is a difference in how Japan and the United States approach trade and investment issues. Aso and Pence agreed to hold the next round in the United States by the end of the year.

"Japan and the United States should exercise leadership in establishing high standards for trade and investment, and promote free and fair trade rules in the Asia-Pacific region," Aso said.

"I believe that we have turned an important page to enhance cooperation," he said.

Trump has taken issue with the United States' trade deficits with such countries as China and Japan, while maintaining that the U.S. dollar has strengthened too much against some currencies.

The launch of the dialogue was agreed during summit talks between Prime Minister Shinzo Abe and Trump in February.

Pushing his "America First" agenda, Trump has ordered a country-by-country, product-by-product review to determine the reasons for the U.S. trade deficits, saying he aims to promote "fair" trade.

The United States had a trade deficit of nearly $68.94 billion with Japan in 2016, smaller than the $347.04 billion deficit with China, according to U.S. government data.

Ahead of the talks, Economy, Trade and Industry Minister Hiroshige Seko and U.S. Commerce Secretary Wilbur Ross met in Tokyo, where they "made good progress" on continuing dialogue for economic cooperation, according to the Ross.

When asked about the path toward a Japan-U.S. free trade agreement, Ross said, "It's a little bit early to say just what form things will take, but we are certainly eager to increase our trade relationships with Japan and to do so in a form of an agreement."

Ross added that the commerce ministers will meet again in June in Washington. "Obviously a first high-level talk is not going to have an immediate resolution of anything but I think we have a reasonable path forward."

At the start of his meeting later Tuesday with Foreign Minister Fumio Kishida, Ross said he expects the dialogue to lead to a bilateral accord.

Earlier in March, Ross expressed eagerness to start negotiations with Japan at an early date for on an FTA, saying Washington considers it a "very high priority" to forge such a deal.


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