ASSESSMENTS

Japan Drafts a Delicate Approach to U.S. Trade Talks

Feb 11, 2019 | 12:00 GMT

Cranes unload containers from ships at the international container yard in Tokyo's port on Jan. 23, 2019. Japan would rather having trade talks at all with the United States, but barring that, it will do anything in its power to ensure Washington doesn't impose tariffs on its car industry.

(TOSHIFUMI KITAMURA/AFP/Getty Images)

Highlights

When Washington begins trade talks with Tokyo in the upcoming months, its primary aim will be to pry open access to the Japanese market.
Japan is likely to offer the United States the same access for some goods that Tokyo granted to the European Union and CPTPP countries in recent trade deals.
Tokyo could also agree to address currency manipulation and accept a provision requiring prior consultation before its signs any trade deal with China, since a concession on that front would not be too onerous.
But even if Japan is cooperative, it is unlikely to secure solid guarantees that protect it from U.S. automotive tariffs — although it could gain exemptions.

It's no secret that Tokyo's export prowess is less than appreciated in the White House. With Japan long in U.S. President Donald Trump's crosshairs due to its trade surplus with the United States, the two countries have finally agreed to sit down this year to talk trade. The timing for the start of the talks remains unclear. In October 2018, Washington extracted an agreement from Tokyo to come to the negotiating table by threatening to impose steep automotive tariffs. On Dec. 21, 2018, the Office of the U.S. Trade Representative published its negotiating objectives, paving the way for talks to begin in late January. The two countries failed to convene, however, in part because of the long U.S. government shutdown, the increased tempo of U.S.-China talks and the beginning of Japan's ordinary Diet session. According to speculation, the U.S.-Japan talks may not begin until at least April. Nevertheless, the clock...

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