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Aso, Pence likely to be at odds over US calls for Japan-U.S. FTA

Japanese Deputy Prime Minister Taro Aso (left, Mainichi) and US Vice President Mike Pence (AP).

WASHINGTON (Kyodo) -- Japanese Deputy Prime Minister Taro Aso and U.S. Vice President Mike Pence are likely to be at odds next week over U.S. calls to launch negotiations for a bilateral free trade agreement, Japanese government officials said Wednesday.

    A second round of the high-level economic dialogue, slated for Monday in Washington, comes as the United States is pushing Japan to further open its agriculture and automobile markets as part of an effort to reduce the U.S. trade deficit with the world's third-largest economy.

    Despite differing views on a Japan-U.S. FTA, Aso and Pence are expected to discuss areas for economic cooperation such as Japanese participation in infrastructure projects in the United States, U.S. exports of energy such as liquid natural gas to Japan and promoting high-standard trade rules in the Asia-Pacific region, according to the officials.

    The dialogue, which follows the inaugural session in April in Tokyo, will pave the way for a planned trip by U.S. President Donald Trump to Japan and four other Asian countries in November.

    Following recent calls by Agriculture Secretary Sonny Perdue and other senior U.S. officials to start trade negotiations with Japan, Pence is expected to seek to forge what Trump says will be a "fair" trade deal with Japan such as a bilateral FTA, which would cover nearly 30 percent of the world economy.

    The Trump administration has repeatedly accused Japan of maintaining nontariff barriers for its automobile market and high import tariffs for foreign farm products.

    In 2016, the United States posted $70.23 billion in goods trade deficit with Japan, the third-largest figure behind only China and Mexico, according to Commerce Department data.

    The Trump administration believes it can obtain the best outcomes in bilateral frameworks and it sees economic relations with Japan as increasingly important, especially after Trump pulled Washington out of the Trans-Pacific Partnership trade deal soon after his inauguration in January.

    Japan believes the TPP is the best framework for the two countries. Aso, who doubles as finance minister, has expressed hope that the United States will return to the TPP.

    Aso said there is "no guarantee" that the Trump administration would win better terms under a bilateral pact with Japan because a multilateral framework like the TPP allows members to offset concessions made with one country with advantages gained from another.

    The TPP, a regional FTA championed by Trump's predecessor Barack Obama, was signed by the United States, Japan and 10 other countries in February 2016, but it has yet to come into force.

    During the economic dialogue, Aso and Pence are also expected to discuss Washington's concern about Tokyo's imposition in August of emergency tariffs on frozen beef from the United States and other countries, according to the Japanese officials.

    In line with World Trade Organization rules, Japan invoked the so-called safeguard tariffs in response to a surge in beef imports in the April to June quarter, raising the tariff rate on beef to 50 percent from 38.5 percent for the period from Aug. 1 to March 31.

    U.S. exports of beef and beef products to Japan totaled $1.5 billion in 2016, making it the United States' top market, according to the Agriculture Department.

    The measure, however, does not affect Australia, a major beef exporter that has an FTA with Japan.

    During a two-day visit to Washington through Tuesday, Aso plans to hold separate talks with U.S. Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross and Gary Cohn, director of the White House National Economic Council.

    Aso, however, will skip a two-day meeting of Group of 20 finance ministers and central bank governors starting Thursday in the U.S. capital.

    Masatsugu Asakawa, vice finance minister for international affairs, and Bank of Japan Governor Haruhiko Kuroda will represent Japan at the meeting where world financial leaders will exchange views on the global economy and financial markets.


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