US and Japan hold ‘frank and good’ trade talks

Vastavam web: Japan’s economy minister said he had “frank and good” trade talks with his U.S. counterpart on Monday, but stressed that currency rates should be discussed in a different context, between finance ministers. The meeting comes after U.S. President Donald Trump and Prime Minister Shinzo Abe agreed last September to start trade talks in an arrangement that protects Japanese automakers from further tariffs while talks are underway.

Trump has made clear he is unhappy with Japan’s $68 billion trade surplus with the United States – much of it from auto exports – and wants a two-way agreement to address it. Abe has stressed that the new framework would be a Trade Agreement on Goods, or TAG, not a more wide-ranging free trade agreement that included investments and services that Japan had resisted. U.S. Treasury Secretary Steven Mnuchin said over the weekend he sees good cooperation with Japan on exchange rates, looking to include a currency provision in any trade agreement to avoid currency manipulation.

When asked about exchange rates, Motegi said on Monday that Japan and the United States have already agreed that currencies should be discussed between respective finance ministers. “We had a frank and very good exchange of views on trade issues,” Motegi told reporters. He declined to be more specific, but said he would explain the contents of their talks after the second day of talks on Tuesday.

“The U.S. probably doesn’t want to spend much time on trade talks with Japan and wants an early achievement,” said Junichi Sugawara, senior research officer at Mizuho Research Institute. “The focus will be how Japan and the U.S. will find a common ground as Japan doesn’t want to compromise on farm products and can’t accept auto export restriction.”